680-682 Kingsway Caringbah Pty Ltd v Sutherland Shire Council

[2017] NSWLEC 99

Land and Environment Court

New South Wales

• Amendment notes

Medium Neutral Citation:

680-682 Kingsway Caringbah Pty Ltd v Sutherland Shire Council [2017] NSWLEC 99

Hearing dates:

18, 19 and 20 July 2017

Date of orders:

08 November 2017

Decision date:

01 November 2017

Jurisdiction:

Class 1

Before:

Molesworth AJ

Decision:

The Court orders:

(1)     The appeal is upheld; and

(2)     Development consent is granted to development application No 16/1411 for: the demolition of existing structures; the consolidation of the site (being the land comprised in Strata Plan 30837, Lot 2 of Deposited Plan 23978 and Lot 1 of Deposited Plan 23978, known as 678 Kingsway (9 Pinnacle Street), 680 Kingsway and 682 Kingsway, Miranda); and the erection of a proposed residential flat building (consisting of 70 units over 8 storeys) and 2 basement car parking levels, on the conditions in Annexure A.

Catchwords:

APPEAL – appeal against refusal of development application to erect residential flat building in Miranda – consideration of redevelopment planning principles – whether breach of development control plan amalgamation plans would result in unacceptable isolation of adjoining properties – whether orderly and economic use and development of relevant sites achievable

Legislation Cited:

Environmental Planning and Assessment Act 1979, ss 4, 5, 76, 76A, 76B, 79C, 80, 80A, 97; Divs 1 and 2 of Pt 4
Land and Environment Court Act 1979, ss 34D, 39
State Environmental Planning Policy No 65 – Design Quality of Residential Apartment Development, cll 2, 3, 4, 27, 28; Pt 4; Sch 1
Sutherland Shire Local Environmental Plan 2015, cll 1.2, 4.3, 4.4, 4.6, 6.14; Pt 4

Cases Cited:

Bettar v Council of the City of Sydney [2016] NSWLEC 1456
Botany Bay City Council v Pet Carriers International Pty Ltd (2013) 201 LGERA 116; [2013] NSWLEC 147
Bulga Milbrodale Progress Association Inc v Minister for Planning and Infrastructure (2013) 194 LGERA 347; [2013] NSWLEC 48
Chambers v Maclean Shire Council (2003) 57 NSWLR 152; [2003] NSWCA 100
Commonwealth Custodial Services Ltd v Valuer-General (2006) 148 LGERA 38; [2006] NSWLEC 400
Cornerstone Property Group Pty Ltd v Warringah Council (2004) 139 LGERA 245; [2004] NSWLEC 189
Director of Public Works v Ho Po Sang [1961] AC 901
Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409
Dubler Group Pty Ltd v Minister for Infrastructure & Planning & Natural Resources (2004) 137 LGERA 178; [2004] NSWCA 424
Karavellas v Sutherland Shire Council [2004] NSWLEC 251
Limahart Pty Ltd v Kogarah Council [2006] NSWLEC 415
Melissa Grech v Auburn Council (2004) 140 LGERA 1; [2004] NSWLEC 40
NFF at 410 Pitt Street Pty Ltd v Council of the City of Sydney [2016] NSWLEC 1181
Notaras v Waverly Council [2006] NSWLEC 669
Randwick City Council v Micaul Holdings Pty Ltd [2016] NSWLEC 7
Shrik Petersham Pty Ltd v Inner West Council [2016] NSWLEC 1337
The Sisters Wind Farm Pty Ltd v Moyne Shire Council (2012) 193 LGERA 126; [2012] VSC 324
Trinvass Pty Ltd v Council of the City of Sydney [2015] NSWLEC 151
Ungar v City of Malvern [1979] VR 259

Category:

Principal judgment

Parties:

680-682 Kingsway Caringbah Pty Ltd ACN 168 089 610 (Applicant)
Sutherland Shire Council (Respondent)

Representation:

Counsel:
Mr J Lazarus (Applicant)
Mr R O’Gorman-Hughes (Respondent)

  Solicitors:
Mills Oakley (Applicant)
Sutherland Shire Council (Respondent)

File Number(s):

2017/00094208

Publication restriction:

N/A

Judgment

A decision to refuse to grant consent to the proposed erection of a residential flat building in Miranda is appealed

1. On 21 October 2016, Sutherland Shire Council (‘the Respondent Council’) received a development application (development application 16/1411) from 680-682 Kingsway Caringbah Pty Ltd (‘the Applicant’) seeking development consent for the “[d]emolition of existing structures and consolidation of site for the purpose of the construction of a proposed Residential Flat Building, [c]onsisting of 70 units over 8 storeys and 2 basement car parking levels” (‘the development’). The relevant land the subject of the proposed development comprises Strata Plan 30837, Lot 2 of Deposited Plan 23978 and Lot 1 of Deposited Plan 23978 – known as 678 Kingsway (9 Pinnacle Street), 680 Kingsway and 682 Kingsway in Miranda (‘the Subject Site’).

2. On 22 March 2017, the Sydney South Planning Panel (‘the Panel’) determined, by a majority of 3:2 panel members, to (as per the Respondent Council’s recommendation) refuse consent to development application 16/1411 pursuant to section 80 of the Environmental Planning and Assessment Act 1979 (‘EPA Act’). The Respondent Council subsequently caused notice to be given that the development application “…has been determined by the issuing of development refusal for the reasons specified in this notice”.

3. The Panel provided three principal, yet interrelated, reasons for its decision in its ‘determination and statement of reasons’ document (Exhibit A, Tab 1). First, based on “…the detailed analysis contained in the Council assessment report”, the Panel stated that “…it is considered [that] the proposed development fails to adequately satisfy the provisions of the following environmental planning instruments”: State Environmental Planning Policy No 65 – Design Quality of Residential Apartment Development (‘SEPP 65’) (including the associated Apartment Design Guide (‘the ADG’)); Sutherland Shire Local Environmental Plan 2015 (‘the LEP’); and Sutherland Shire Draft Development Control Plan 2015 (‘the DDCP’).

4. Secondly and consequently, it was considered that the proposed development would fail to promote orderly and economic development because it would: result in the isolation of neighbouring land and the curtailing of the full development potential of this land (by varying the relevant amalgamation pattern in the DDCP); unduly constrain the development of adjoining land by failing to comply with the relevant building separation requirements; and provide inadequate onsite parking and garbage collection arrangements.

5. Thirdly and consequently, the Panel considered that the proposed development would be an inappropriate use of the Subject Site and would not be in the public interest.

6. Given that the Panel explicitly referred to the Respondent Council’s assessment report (Exhibit A, Tab 2) as informing its decision, it is appropriate to set out the three reasons provided in that report to justify the recommendation that the development application be refused.

7. First, the development application was considered to be unacceptable because it would, contrary to the EPA Act, not promote the orderly and economic development of the land.

8. Secondly, the development application was considered to be unacceptable because it would contravene the building separation requirements of SEPP 65 and the ADG and, thereby, unduly constrain the development of and/or impact upon 7, 11 and 13 Pinnacle Street and 676 Kingsway.

9. Thirdly, the development application was considered to be unacceptable due to its inconsistency with the DDCP in that the development would: result in the isolation of the above mentioned neighbouring land and (possibly) the curtailing of the full development potential of this land (by varying the relevant amalgamation pattern in the DDCP); not comply with the requisite front setback; not achieve the minimum Pinnacle Street frontage; not comply with the requisite building envelope height along the Kingsway; and not meet car parking requirements. Additionally, it was stated that the development application had “…not demonstrated that garbage collection can be achieved from the basement”.

10. On 28 March 2017, the Applicant commenced these proceedings by way of a Class 1 Application. The Applicant appeals, under s 97(1) of the EPA Act, against the decision to refuse to grant development consent to its development application. The Applicant seeks court orders upholding its appeal and granting consent to its development application. In the event that the Applicant was to be successful, the parties usefully provided the Court with agreed conditions of consent. However, the Respondent Council contests the Applicant’s case and contends that the Court ought to dismiss the appeal.

11. It falls to the Court to decide whether the Applicant’s proposed development, on its merits, ought to be granted or refused development consent. The role of the Court is not to critique the determination of the Panel (to refuse to grant consent) so as to ascertain whether or not the Panel made the correct or preferable determination: cf Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409 at 419. Rather, this Court shall, metaphorically speaking, “stand in the shoes” of the consent authority and determine for itself, de novo, on the facts and law that exist at the time of the determination of the appeal, whether or not to approve the development application: Land and Environment Court Act 1979 (‘Court Act’), s 39 and Bulga Milbrodale Progress Association Inc v Minister for Planning and Infrastructure (2013) 194 LGERA 347; [2013] NSWLEC 48 at [7]; Ungar v City of Malvern [1979] VR 259 at 265-266; The Sisters Wind Farm Pty Ltd v Moyne Shire Council (2012) 193 LGERA 126; [2012] VSC 324 at [98]-[99]; and Dubler Group Pty Ltd v Minister for Infrastructure & Planning & Natural Resources (2004) 137 LGERA 178; [2004] NSWCA 424 at [20].

12. In so doing, the Court must have regard to, inter alia, the Court Act, the EPA Act, SEPP 65, the LEP and (as will be explained) the Sutherland Shire Development Control Plan 2015 (‘the DCP’) [rather than the DDCP], the circumstances of the case and the public interest: Court Act, s 39 and Bulga Milbrodale Progress Association Inc v Minister for Planning and Infrastructure at [10].

13. In merits review determinations, it is not unusual for the decision of the Court to be different to the original decision. One reason for this is that new issues and evidence may arise before the Court: Court Act, s 39 and Bulga Milbrodale Progress Association Inc v Minister for Planning and Infrastructure at [10]. For example, the Court had the benefit of receiving expert evidence from Mr Jai Reid and Mr Benjamin Black (the town planning experts for the Respondent Council and Applicant respectively) and Mr Grant Rayner and Mr Paul Corbett (the Respondent Council’s engineering expert and the Applicant’s traffic engineering expert).

The Subject Site and its locality

14. The Subject Site comprises an inverted ‘L-shaped’ block of land, with a total area of approximately 2,846.3 m2, which abuts the Kingsway to the north and Pinnacle Street to the south – such that it has significantly greater frontage to the Kingsway (approximately 53.17 metres compared to 22.66 metres). The Subject Site has a depth of approximately 75.48 metres, falls by about 3.5 metres from Pinnacle Street to the Kingsway, and has limited established vegetation. The pre-existing buildings on the Subject Site proposed to be demolished are residential dwelling-houses.

15. Adjacent to the northern half of the eastern boundary of the Subject Site, there is an existing dwelling-house on Lot 1 in Deposited Plan 500483 (known as 676 Kingsway) and adjacent to the southern half of the eastern boundary, there are multiple dwellings on Strata Plan 68628 (known as 7 Pinnacle Street). To the east of these properties, there is a significant multi-dwelling Land and Housing Corporation social housing estate of approximately 3,815 m2 on Lot 245 in Deposited Plan 834075 (known as 672-674 Kingsway).

16. On its far western boundary, the Subject Site borders a 3.055 metre wide corridor of council land which connects Pinnacle Street to the Kingsway (known as 13R, Pinnacle Street). This land, which was re-classified from community land to operational land on 7 April 2017, acts as both a drainage reserve and a pedestrian pathway. Between this land corridor and the southern half of the western boundary of the Subject Site, there are two lots with residential dwellings: Lot 3 in Deposited Plan 23978 and Lot 4 in Deposited Plan 23978 (known as 13 and 11 Pinnacle Street respectively).

17. According to the Respondent Council, the locality of the Subject Site is “…currently characterised by single to two storey free standing dwellings along Kingsway with a cluster of multi-dwelling housing along Pinnacle Street”. However, as will be detailed below, changes to the local planning controls has resulted in ongoing “…significant uplift [to the locality] and the emerging character is one of residential flat buildings”.

18. In the last few years, at least seven development applications have been lodged proposing to redevelop land in the locality by erecting residential flat buildings. In particular, a residential flat building is being constructed to the south of the Subject Site and a number of residential flat buildings on Pinnacle Street have been approved. It should also be noted that the Subject Site is located nearby to the Westfield Miranda Centre, Miranda Public School, the railway line and the F6 road corridor.

The proposed development

19. As identified above, the development proposed for the Subject Site is a residential flat building of 70 units across 8 storeys, including 2 basement car parking levels (which would accommodate over 80 car spaces and provide car access via Pinnacle Street). To enable this development to be realised, the development application seeks the demolition of the existing buildings, the removal of trees and the amalgamation of the land making up the Subject Site.

20. The proposed residential flat building – which is 27.84 metres high (at the boundary with the Kingsway) – is made up of 13 one bedroom apartments and 52 two bedroom apartments which, at the south of the Subject Site, steps down to a 3 storey level (comprising 5 three bedroom apartments) at the boundary with Pinnacle Street.

21. Many of the proposed apartments would, according to the statement of environmental effects submitted with the development application, benefit “from good local and district views including views towards Botany Bay and the City skyline to the north”. The proposed development features communal open space on the ground floor, level six and on the roof, includes associated landscaping, and features a public pedestrian pathway at the east of the Subject Site to link Pinnacle Street with the Kingsway.

22. In the statement of environmental effects, the proposed residential flat building is described as adopting “a contemporary appearance with a modulated street presentation” and featuring “[m]aterials and colours [that] are sympathetic to the locality and provide visual interest in the streetscape” (Exhibit A, Tab 7). Moreover, the proposed development is said to, at ground level, “…incorporate hard and soft landscaping elements that are appropriate to the scale of development and clearly define public domain with common and private open space areas” (Exhibit A, Tab 7).

The statutory and planning control framework

23. The below outline is not intended to exhaustively detail the statutory framework and all of the relevant controls (or relevant matters for consideration) that apply to the determination of the development application before the Court. Instead, it is intended to provide assistance in understanding the critical issues before the Court.

The EPA Act

24. Under s 4 of the EPA Act, development is defined to mean, inter alia, “the use of land” and “the erection of a building”. The EPA Act regulates development by way of a threefold system of classifying development. As was explained by Ipp JA in Chambers v Maclean Shire Council (2003) 57 NSWLR 152; [2003] NSWCA 100 at [33], the three categories of development are delineated under Div 1 of Pt 4 of the EPA Act:

The first category is that provided by s 76(1). Section 76(1) concerns specified developments that, by an “environmental planning instrument”, may be carried out without the need for development consent. The second category of development is set out in s 76A(1) and concerns a specified development that, by an environmental planning instrument, may not be carried out except with development consent. The third category is set out in s 76B. It concerns developments that, by an environmental planning instrument, are prohibited, or a development that cannot be carried out on land with or without development consent.

25. Relevantly for these proceedings, Division 2 of Part 4 of the EPA Act contains the operative provisions that provide the requisite procedure for development that needs consent. Section 79C(1) delineates the well-known general matters for consideration that a consent authority is to take into account in determining a development application. Section 79C(1) provides:

79C Evaluation

(1) Matters for consideration – general

In determining a development application, a consent authority is to take into consideration such of the following matters as are of relevance to the development the subject of the development application:

(a) the provisions of:

(i) any environmental planning instrument, and

(ii) any proposed instrument that is or has been the subject of public consultation under this Act and that has been notified to the consent authority (unless the Secretary has notified the consent authority that the making of the proposed instrument has been deferred indefinitely or has not been approved), and

(iii) any development control plan, and

(iiia) any planning agreement that has been entered into under section 93F, or any draft planning agreement that a developer has offered to enter into under section 93F, and

(iv) the regulations (to the extent that they prescribe matters for the purposes of this paragraph), and

(v) any coastal zone management plan (within the meaning of the Coastal Protection Act 1979),

that apply to the land to which the development application relates,

(b) the likely impacts of that development, including environmental impacts on both the natural and built environments, and social and economic impacts in the locality,

(c) the suitability of the site for the development,

(d) any submissions made in accordance with this Act or the regulations,

(e) the public interest.

26. Additionally, sub-sections 79C(2), (3) and (3A) regulate the power of a consent authority to evaluate a development application when an environmental planning instrument, regulation or development control plan contains development standards:

(2) Compliance with non-discretionary development standards – development other than complying development

If an environmental planning instrument or a regulation contains non-discretionary development standards and development, not being complying development, the subject of a development application complies with those standards, the consent authority:

(a)    is not entitled to take those standards into further consideration in determining the development application, and

(b)    must not refuse the application on the ground that the development does not comply with those standards, and

(c)    must not impose a condition of consent that has the same, or substantially the same, effect as those standards but is more onerous than those standards,

and the discretion of the consent authority under this section and section 80 is limited accordingly.

(3) If an environmental planning instrument or a regulation contains non-discretionary development standards and development the subject of a development application does not comply with those standards:

(a) subsection (2) does not apply and the discretion of the consent authority under this section and section 80 is not limited as referred to in that subsection, and

(b) a provision of an environmental planning instrument that allows flexibility in the application of a development standard may be applied to the non-discretionary development standard.

(3A) Development control plans

If a development control plan contains provisions that relate to the development that is the subject of a development application, the consent authority:

(a)    if those provisions set standards with respect to an aspect of the development and the development application complies with those standards—is not to require more onerous standards with respect to that aspect of the development, and

(b)    if those provisions set standards with respect to an aspect of the development and the development application does not comply with those standards—is to be flexible in applying those provisions and allow reasonable alternative solutions that achieve the objects of those standards for dealing with that aspect of the development, and

(c)    may consider those provisions only in connection with the assessment of that development application.

In this subsection, standards include performance criteria.

27. Once the consent authority has considered the matters for consideration set out above, and any other mandatory relevant considerations, and consulted with the public, section 80 of the EPA Act requires the consent authority to determine the development application. Most relevantly, s 80(1) is in the following terms:

80 Determination

(1) General

A consent authority is to determine a development application by:

(a) granting consent to the application, either unconditionally or subject to conditions, or

(b) refusing consent to the application.

28. Although not set out here, it should be noted that s 80A provides the power for the imposition of conditions of development consent.

SEPP 65

29. SEPP 65 applies to “development for the purpose of a residential flat building” if, inter alia, the development consists of the erection of a new building of three or more storeys and contains at least four dwellings: cl 4(1). Among the stated aims of SEPP 65, this instrument “aims to improve the design quality of residential apartment development in New South Wales” (cl 2(1)) and, in so doing, contribute “to the sustainable development of New South Wales:

(i) by providing sustainable housing in social and environmental terms, and

(ii) by being a long-term asset to its neighbourhood, and

(iii) by achieving the urban planning policies for its regional and local contexts…”

(cl 2(3)(a)).

30. It should also be noted that SEPP 65 “recognises that the design quality of residential apartment development is of significance for environmental planning for the State due to the economic, environmental, cultural and social benefits of high quality design” (cl 2(2)).

31. Clause 6A of SEPP 65 stipulates that a development control plan cannot be inconsistent with the objectives, design criteria and design guidance set out in Parts 3 and 4 of the ADG with respect to particular matters, such as visual privacy, solar access, apartment size and layout and ceiling heights.

32. Importantly, Schedule 1 to SEPP 65 (see cl 3(1)) sets out the nine design quality principles which the consent authority must consider in assessing and determining a development application when SEPP 65 is engaged. These principles are respectively entitled: context and neighbourhood character; built form and scale; density; sustainability; landscape; amenity; safety; housing diversity and social interaction; and aesthetics.

33. Part 4 of SEPP 65 provides the operative clauses that condition the power of a consent authority to determine a development application when SEPP 65 is engaged. Relevantly sub-clauses (1) and (2) of clause 28 provide as follows:

28 Determination of development applications

(1)    After receipt of a development application for consent to carry out development to which this Policy applies (other than State significant development) and before it determines the application, the consent authority is to refer the application to the relevant design review panel (if any) for advice concerning the design quality of the development.

(2)    In determining a development application for consent to carry out development to which this Policy applies, a consent authority is to take into consideration (in addition to any other matters that are required to be, or may be, taken into consideration):

(a) the advice (if any) obtained from the design review panel, and

(b) the design quality of the development when evaluated in accordance with the design quality principles, and

(c) the Apartment Design Guide.

…

34. Under SEPP 65, a design review panel means a panel constituted under Part 3 to, inter alia, “give specific independent design advice to the consent authority on a development application for development to which this Policy applies … and, in particular, to give such advice on the design quality of the development to which this Policy applies … when evaluated in accordance with the design quality principles and the Apartment Design Guide”: cl 27.

35. Given that SEPP 65 effectively imports the ADG as a regulatory tool, it should be noted that Part 2, Part 3 and Part 4 of the ADG provide guidance on a large number of design issues falling under the respective categories of “developing the controls”; “siting the development”; and “designing the building”. For the purposes of these proceedings it is appropriate to merely identify the following parts of relevance: Part 2F – building separation; Part 3D – communal and public open space; Part 4C – ceiling heights; and Part 4D – apartment size and layout. It is also important to note here the Applicant’s submission that Part 2 of the ADG is not to be applied by the Court in these proceedings because it is directed towards guiding local councils in creating, rather than applying, planning controls (Transcript, 19 July 2017, p 7).

The LEP

36. The aims of the LEP are set out under clause 1.2 and are as follows:

1.2 Aims of Plan

(1)    This Plan aims to make local environmental planning provisions for land in Sutherland Shire in accordance with the relevant standard environmental planning instrument under section 33A of the Act.

(2)    The particular aims of this Plan are as follows:

(a)    to deliver the community’s vision for Sutherland Shire by achieving an appropriate balance between development and management of the environment that will be ecologically sustainable, socially equitable and economically viable,

(b) to establish a broad planning framework for controlling development, minimising adverse impacts of development, protecting areas from inappropriate development and promoting a high standard of urban design,

(c)    to protect and enhance the amenity of residents, workers and visitors in all localities throughout Sutherland Shire,

(d)    to minimise risk to life, property and the environment from hazards, particularly bush fires, flooding and climate change,

(e) to concentrate development in localities with adequate infrastructure that is accessible to transport and centres,

(f)    to protect and enhance the natural environment and scenic quality of the Sutherland Shire through the retention and rehabilitation of wildlife habitats, wildlife corridors, bushland, foreshores and waterways,

(g) to conserve, protect and enhance the environmental and cultural heritage of Sutherland Shire,

(h) to provide leisure and recreation opportunities to suit the needs of the changing population,

(i)    to meet the future housing needs of the population of Sutherland Shire.

37. In many environmental planning instruments, especially local environmental plans, the land use tables regulating development within areas zoned for particular overarching purposes adopt the threefold classification of development set out in the EPA Act: development that may be carried out without development consent; development that may be carried out only with development consent; and development that is prohibited. As Preston CJ of LEC explained in Botany Bay City Council v Pet Carriers International Pty Ltd (2013) 201 LGERA 116; [2013] NSWLEC 147 at [25]-[26]:

The land use table for each zone identifies, by reference to the purpose of the development, the categories of development that fall within each of the three classifications …

Commonly, the environmental planning instrument containing the land use table with the threefold classification of developments describes each purpose, either directly in a definitions clause or indirectly by incorporating definitions in other statutory instruments. Each purpose is indicated in the instruments by means of a description of a character which the purpose imparts to land or buildings on land in which it is pursued. This may be done at varying degrees of particularity…

38. In these proceedings, the relevant land use table which regulates development on the Subject Site is that applying to land zoned as R4 – High Density Residential, which is set out under Part 2 of the LEP. In full, this land use table provides:

Zone R4 High Density Residential

1 Objectives of zone

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

• To provide a variety of housing types within a high density residential environment.

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

• To encourage the supply of housing that meets the needs of the Sutherland Shire’s population, particularly housing for older people and people with a disability.

• To promote a high standard of urban design and residential amenity in a high quality landscape setting that is compatible with natural features.

• To minimise the fragmentation of land that would prevent the achievement of high density residential development.

2 Permitted without consent

Home occupations

3 Permitted with consent

Attached dwellings; Backpackers’ accommodation; Bed and breakfast accommodation; Boarding houses; Child care centres; Community facilities; Dual occupancies; Dwelling houses; Environmental protection works; Flood mitigation works; Home businesses; Home industries; Hostels; Multi dwelling housing; Neighbourhood shops; Places of public worship; Recreation areas; Residential flat buildings; Respite day care centres; Roads; Seniors housing; Shop top housing

4 Prohibited

Any development not specified in item 2 or 3

39. Importantly, development for the purpose of residential flat buildings is permitted with development consent on land zoned as R4 – High Density Residential land and, therefore, on the Subject Site.

40. Part 4 of the LEP sets out the principal development standards for certain types of development to which the LEP applies. The development standards of particular relevance in these proceedings include those set out in clauses 4.3 (height of buildings) and 4.4 (floor space ratio).

41. Relevantly, as identified in the Respondent Council’s assessment report, those applicable controls for the Subject Site are, respectively, a maximum building height of 25 metres and a desired floor space ratio of 2:1. However, the principal development standards under Part 4 are not to be slavishly applied: an appropriate degree of flexibility is allowed: cl 4.6. Moreover, it should be noted that clause 6.14 provides for a minimum percentage of the site area in particular land use zones to consist of landscaped area. Here, as stated in the Respondent Council’s assessment report, the requisite minimum is 30%.

The DDCP and the DCP

42. At the time of the hearing, there was no operative development control plan that applied to the Shire of Sutherland; rather there was a draft development control plan in place (DDCP). During the hearing, a considerable amount of time was used by both parties to address the implications of there being a draft (rather than a final) development control plan in place. However, a fortnight after the hearing, on 2 August 2017, the DDCP was superseded by the DCP. As a consequence of the Court independently becoming aware of the DCP coming into force, the Court reopened the case by directing the parties to lodge additional written submissions on the implications of the DCP replacing the DDCP, with these submissions being provided by 16 August 2017.

43. The DCP has no savings provisions. In many material respects, the DCP and the DDCP are, unsurprisingly, in similar terms. The most relevant chapter of the DCP which applies to the Subject Site is Chapter 8, which concerns the Miranda Pinnacle Street Precinct (‘the Precinct’). The Precinct, identified in Map 1 to Chapter 8, includes the Subject Site. According to the DCP, most of the Precinct is located within 800 metres of the Miranda railway station and is “bounded by the Kingsway to the north, the railway line to the south, the F6 corridor to the west and Miranda public school to the east”. Furthermore, it is stated that the area was rezoned under the LEP “to allow residential flat building with maximum permissible height of 25 metres (7-8 storeys) and maximum FSR (floor space ratio) 2:1”.

44. The overarching strategy for the Precinct is described as being “to create an exemplary medium to high rise residential community close to the shops and services of a centre, which emphasises the Sutherland Shire’s unique ecology with good indigenous landscaping and pleasant spaces between buildings”.

45. To realise this strategy, Chapter 8 of the DCP contains at least 13 substantive parts to guide development in the Precinct, including: Part 5 – Amalgamation Requirements; Part 6 – Building Envelopes, Part 9 – Street Setbacks; Part 10 – Side and Rear Setbacks; Part 17 – Parking; and Part 18 – Waste Management Requirements. (For cross-referencing purposes, the provisions which were previously found in Chapter 7 of the DDCP, are now found in Chapter 8 of the DCP). It is not necessary to set out all of the many relevant aspects of Chapter 8 of the DCP here. However, as will become clear, it is appropriate to set out Part 5 of Chapter 8 of the DCP in some detail.

46. The objectives of the amalgamation requirements in Chapter 8 of the DCP are as follows:

5.1 Objectives

1. Ensure that amalgamated land parcels are of sufficient size to realize the maximum allowable FSR while complying with SEPP 65 and the Residential Flat Design Code.

2.   Ensure redevelopment does not isolate lots or prevent neighbouring land parcels from reaching their redevelopment potential.

3.   Ensure that development makes a positive contribution to the streetscape with redevelopment of varying building heights across the precinct.

4. Ensure future development creates and maintains a high standard of amenity for residents.

5.    Ensure that efficient and safe vehicle entry points can be achieved.

6.   Unify the precinct by creating a visual connection between Pinnacle Street and University Road with landscaped spaces between buildings.

7. Improve pedestrian connectivity in the precinct.

47. To achieve these ends, Part 5.2 of Chapter 8 sets out the following 5 controls:

5.2 Controls

1. Vehicular access from the Kingsway is not allowed.

2. Development of land shall be in accordance with the Miranda Pinnacle Street Precinct Amalgamation Plan Option 1. For Sites 1 and 2, an alternative Amalgamation Plan Option 2 has been shown. This plan shows amalgamated sites with a relocated pedestrian access path between Pinnacle Street and the Kingsway.

A council owned pedestrian way currently separates Sites 1 and 2, so Site 2 can only be a four lot amalgamation unless the path is relocated. Maintaining pedestrian access through the block is essential. A preferred location for this path is within Site 2 on the eastern side. The relocation of the path could be negotiated with council prior to development of the amalgamated sites. In this scenario Site 2 Option 2 sets a seven lot amalgamation, with the pedestrian path relocated. This arrangement means that the maximum permissible FSR 2:1 is easier to achieve.

3. A new east west pedestrian path connecting Pinnacle Street with University Road is required when redevelopment of any part of amalgamated sites 9 and 11 occurs. This 6 metre wide path must be dedicated for public access and can be considered as part of the required side setbacks for development on the sites. The pedestrian path is to improve pedestrian and visual permeability through the precinct, and to provide a direct pedestrian route from Pinnacle Street to University Road. See: ‘7. Design Guidelines for Specific Sites’.

4. If an application proposes a development that does not comply with the amalgamation plan, a minimum street frontage width of 26m should be achieved. Where development of a narrower site is proposed the development must:

i. Provide safe and efficient access and servicing facilities particularly in relation to parking, pedestrian and vehicle access, collection and storage of waste.

ii. Provide a high standard of resident amenity - particularly in relation to privacy, solar access, ventilation, and the provision of outlooks to landscaped setbacks.

iii. Respond to the local context, including providing adequate separation from existing and future adjoining development.

Development sites with site frontage width less than 26m may not allow for the full FSR to be realised.

5. Development must be carried out in an orderly manner.

If an application proposes a residential flat development that does not comply with the amalgamation plan, the applicant must demonstrate that development of an alternative amalgamation pattern can be achieved where all sites can achieve their full development potential (FSR 2:1).

A schematic design must show that development of land under an alternative amalgamation pattern complies with SEPP 65 and the Apartment Design Guide standards, and allows for building forms of varied height across the precinct, as shown in the Building Envelope Plan.

The assessment of any proposal to vary the amalgamation pattern will include consideration of the impact of the proposed development on the future capacity of lots left isolated.

Note:

Applications seeking to vary the amalgamation plan must include copies of correspondence between the proponent and the owners of any sites not incorporated in the designated amalgamation pattern or the owner of any site that would be isolated by the proposed development. The correspondence must clearly indicate that a fair financial offer has been made to that owner for incorporation into the development proposal (based on 3 valuation reports provided with the submission) and any response to these offers. Applicants must make this correspondence available to all landowners in the original amalgamation plan. The information will also be publicly available at Council.

A reasonable offer, for the purposes of determining the development application and addressing the planning implications of an isolated lot, is to be based on 3 independent valuation reports (prepared by registered valuers and valuing the property at ‘highest and best use’) and include other reasonable expenses likely to be incurred by the owner of the isolated property in the sale of the property.

Where it has been shown that reasonable efforts have been undertaken to facilitate amalgamation of the isolated properties, and where no resolution can be reached between the parties, applicants must include with their development application a plan of adjoining lots excluded from the amalgamation which shows a schematic design of how the site/s may be developed. In such instances isolated lots are not expected to achieve the full FSR permissible in the zone.

48. The two DCP amalgamation plan options for the Precinct referred to above are set out below (including the note under Option 1). For orientation purposes, it is convenient here to note that in the first plan, the Subject Site comprises the large unshaded block of land immediately to the east of proposed Site 2 and the two lots in the northern half of Site 2.

Amalgamation Plan Option 1:

Note: Sites with existing multi dwelling development have not been included in the amalgamation pattern.

Amalgamation Plan Option 2:

49. Although Chapter 8 of the DCP has been the chapter of the DCP most focused on in there proceedings, it is important to also note the material relevance of Chapter 6, entitled “R4 Residential Flat Buildings”. Chapter 6 is divided into 11 sections, namely: streetscape and building form; street setbacks; side and rear setbacks; landscape design; building layout and private open space; solar access; visual and acoustic privacy; adaptable and liveable housing; safety and security; parking; and waste management requirements. As recognised in Chapter 6, the requirements for residential flat building development set out in SEPP 65 and the ADG prevail over the DCP requirements. Thus, “the DCP controls [must] work in concert with SEPP 65 and SSLEP 2015 controls”.

The development application process

50. A brief chronology of relevant events pertaining to the development application was helpfully provided by the Respondent Council. This chronology is as follows:

31 March 2016 – A pre-application Architectural Review Advisory Panel meets to discuss the Subject Site.

21 October 2016 – The development application is lodged with the Respondent Council.

27 October 2016 – The development application is notified to affected property owners (eight submissions were received).

15 November 2016 – Four people attend an information session concerning the development application.

23 November 2016 – The development application is referred to the Architectural Review Advisory Panel for review.

20 December 2016 – The Sydney South Planning Panel is briefed on the development application.

21 January 2017 – The development application is notified to affected property owners (eight submissions were received).

28 February 2017 – The Respondent Council’s Submission Review Panel considers the development application.

9 March 2017 – The Respondent Council’s planning and assessment report is referred to the Sydney South Planning Panel for its consideration.

17 March 2017 – A further addendum to this report is referred to the Sydney South Planning Panel for its consideration.

22 March 2017 – The Sydney South Planning Panel determines to refuse to grant consent to the development application.

28 March 2017 – These proceedings are commenced.

Objectors

Pre-appeal

51. During the development assessment process for the development application, 19 letters of objection have been received in two time periods: 26 October 2016 – 24 November 2016 and 1 February 2017 – 19 April 2017.

52. In the first period of time, letters of objection were received from: Mr Andrew and Mrs Lingling Lawler (of 11 Pinnacle Street); Mr Douglas McNeil (of 14 Matson Crescent); Mr Peter Daaboul; Mr Greg and Mrs Jenine Johansen (of 17 Pinnacle Street); Mr Shane and Mrs Lorraine Murray (of 13 Pinnacle Street); Mr Allan and Mrs Jacqueline Elliot (of 15 Pinnacle Street); and Ms Bronwyn Sams (of 1/7 Pinnacle Street).

53. In the second period of time, in addition to further letters of objection from the above people, Ms Dianne McFarlane (of 676 Kingsway) submitted a letter of objection and Ms Eleni Petinos MP sent a representation, on behalf of the Murrays, to the Mayor of the Respondent Council.

54. Given the nature of the contested issues in this appeal, it is necessary to succinctly outline the salient reasons given by these objectors as to why the development application should not be approved.

55. The Lawlers submitted that the proposed development:

would exceed the allowable maximum height permitted by the controls;

would cause a loss of amenity, privacy and solar access to 11-13 Pinnacle Street;

offends the DDCP by departing from the amalgamation plan and thereby: would isolate 7, 11 and 13 Pinnacle Street and 676 Kingsway, and result in compromises on setbacks, spaces, aspect and harmony between developments. In particular, it was said that the proposed development would substantially sterilise the potential of adjoining properties to achieve the desired floor space ratio for the Precinct;

has not been accompanied by genuine attempts to amalgamate 7, 11 and 13 Pinnacle Street and 676 Kingsway. In support of this, it was said that the offers made were: not genuine, intended to secure refusal and predicated on fundamentally flawed and inadequate property valuations (that unusually reached the same ultimate figure). In this respect, it was observed that “[w]e feel very strongly that the Council position on the valuations is incorrect and feel that Council’s support of the valuations may become critical when others review the DA again … fundamentally the valuations ignore the zoning and the best comparable sales evidence available; the street in which the property resides, and this point defies logic!!!”. Additionally, it was submitted that any suggestion of amalgamation between 7 Pinnacle Street, 676 Kingsway and the neighbouring social housing estate was nothing more than speculation;

would hamper the realisation of a holistic Precinct development. In particular, it was said that the proposed pedestrian link between the Kingsway and Pinnacle Street would be inadequate, inconsistent with the objectives of the controls and impact upon the efficiency of the amalgamation pattern; and

would not result in an outcome that is fair and just for existing residents of the Precinct who have suffered ongoing considerable stress as a result of the Respondent Council’s decision to transform the Precinct into a high-density residential area.

56. Mr McNeil submitted that, overall, the proposed development would not create a well-balanced block in that it would: reduce the development potential of “the two dwellings in Pinnacle Street” and potentially pose significant traffic related issues arising from the associated car park basement levels. Mr McNeil also suggested that it would be achievable to include the two houses in Pinnacle Street into the proposed development.

57. Mr Daaboul submitted that, inter alia, the proposed development would be far superior if it incorporated 11-13 Pinnacle Street and that the contemplation of the development potential of surrounding lots in the development application (if the proposed development was approved and built) was unrealistic.

58. The Johansens submitted that they objected to the proposed development because it: offends the DDCP amalgamation plan; exceeds the maximum permitted building height; has insufficient Pinnacle Street frontage; isolates 11-13 Pinnacle Street; and would have adverse solar access impacts on 11-15 Pinnacle Street.

59. The Murrays’ submissions were in similar terms to the Lawlers’ submissions and reiterated most of their above mentioned grounds of objection, emphasising that the valuations of adjoining properties accompanying the development application were “farcical” for numerous reasons, including that they “don’t address the zoning and the sales evidence completely ignores the recent Pinnacle Street market evidence”.

60. The Elliotts objected to the proposed development on the basis that the proposal: does not comply with the DDCP amalgamation plan; exceeds the maximum permitted building height; does not comply with the requisite western boundary setback; has inadequate frontage to Pinnacle Street; would isolate and restrict the development potential of 11-13 Pinnacle Street; proposes an inadequate rubbish collection point; and potentially adversely affects the solar access of neighbouring properties.

61. Ms Sams’ submissions were in similar terms to the Lawlers’ submissions and reiterated most of their above mentioned grounds of objection.

62. Ms McFarlane submitted that she objected to the proposed development because it: exceeds the maximum permitted building height; offends the DDCP amalgamation plan; would result in the isolation of 676 Kingsway and 7 Pinnacle Street; and has not been accompanied by genuine attempts to amalgamate 676 Kingsway and 7 Pinnacle Street.

On the appeal

63. The notice of objectors provided by the Respondent Council for the Court included the following objectors: Mr Lawler, Ms Sams, Mr Murray and Mr McNeil.

64. At the Court view, these objectors made brief oral submissions reiterating some of the pertinent reasons justifying their respective objections to the proposed development as set out above. In passing, the Court notes that the submissions made by objectors in the course of the view, conducted in accordance with s 34D of the Court Act, are received and taken into consideration by the Court pursuant to s 79C(1)(d) of the EPA Act. Pursuant to the Court’s Site Inspections Policy, the oral submissions received on-site from the objectors and, in the case of Mr Lawler, the tender of a document, were received as non-expert evidence and properly taken into consideration.

65. Mr Lawler emphasised that the proposed development would result in the unacceptable isolation of neighbouring properties and attacked the valuations provided in support of the development application. In particular, Mr Lawler contended that the flawed valuations and associated offers amounted to a cynical, ‘check-a-box’ exercise that did not involve any discussions or genuine offers. It was suggested that the valuations vastly underestimated the real value of the relevant properties. In support of this, Mr Lawler provided a table of relevant property sales on Pinnacle Street from the Valuer-General’s website (which became Exhibit 7 in these proceedings).

66. Mr McNeil submitted that it was of some significance that the Applicant declined to object to the DDCP amalgamation plan and reiterated his concern as to the potential traffic issues associated with the proposed development.

67. Ms Sams submitted that the Applicant had made no attempt to purchase the relevant land situated between the proposed development and the social housing estate. Ms Sams also stressed her concern about the potential reduction in direct sunlight to her own, and her neighbours’, house.

The commencement of the DCP

68. As identified above, following the conclusion of the hearing, it came to the Court’s attention that the DDCP had been superseded by the DCP. Although neither party had alerted the Court to the fact that the DCP had commenced, the Court reopened the case and invited both the Applicant and the Respondent Council to provide brief written supplementary submissions to update their existing submissions. It was necessary to reopen the case and allow further submissions to be made in order to satisfy the requirements of procedural fairness. As observed above, the Court must make its determination on the law and planning controls as they exist at the time of determination: Bulga Milbrodale Progress Association Inc v Minister for Planning and Infrastructure at [7]; Ungar v City of Malvern at 265-266; The Sisters Wind Farm Pty Ltd v Moyne Shire Council at [98]-[99]; and Dubler Group Pty Ltd v Minister for Infrastructure & Planning & Natural Resources (2004) 137 LGERA 178; [2004] NSWCA 424 at [20].

69. It is instructive to reflect on the foundation of the legal principle that the Court must make its determination on the law and planning controls as they exist at the time of its judgment, rather than at the conclusion of the hearing before it or at the time the Panel determined the original development application. The leading authority in Australia on the principle, for almost forty years, has been Ungar v City of Malvern. In determining the applicable approach to the planning law, the Full Court of the Supreme Court of Victoria observed that the principles enunciated by the Privy Council in Director of Public Works v Ho Po Sang [1961] AC 901 were determinative.

70. In Ungar v City of Malvern, an applicant for a planning permit for a commercial vehicle park – which was, at first instance, capable of being permitted with consent at the time of the planning authority’s determination – was faced with his proposal becoming a prohibited use, due to an amendment to the applicable planning controls, by the time an appeal came before a tribunal for determination. The Court stated at 264 and 265-266 that:

The amendment to the Planning Scheme did no more than alter the law applicable to the appellant’s application for a permit. The question accordingly is whether the relevant law to be applied by the Appeals Tribunal was the law as it existed at the time the appeal came to be determined. The issue for consideration is whether or not, by instituting his appeal before the amendment to the Planning Scheme, the appellant acquired a right or privilege to have his application determined in accordance with the law as it existed at the date on which he instituted his appeal.

…

In the present case the institution of the appeal by the appellant gave him no more than a hope or expectation that his appeal would succeed and that he would be granted a permit. But, as the Appeals Tribunal had a discretion as to whether or not it would grant a permit, the question was open and unresolved. No right or privilege had been acquired by the appellant nor had any right or privilege accrued to him. The investigation by the Appeals Tribunal was not in respect of some right of the appellant but was to decide whether some right should or should not be given. Hence, as the appellant had no right or privilege when the law changed to make it illegal to grant a permit for a commercial vehicle park for 33 Peverill Street, the Appeals Tribunal was bound to refuse to give such a permit to the appellant.

71. The Court has highlighted the rationale for this principle of planning law so as to remind parties that if material planning controls change in the course of a Class 1 appeal hearing or, critically, after the conclusion of a hearing before judgment is delivered (as occurred in this case), parties must be vigilant in ensuring that the Court is expeditiously informed that the controls have changed. Failure to inform the Court of changed planning controls between the conclusion of the hearing and the delivery of judgment may, conceivably, lead to an error of law inadvertently occurring.

72. It should be noted that the consequence of the coming into force of the DCP is that, perhaps fortunately for the Court, a considerable body of the Respondent Council’s and Applicant’s oral and written submissions as to the proper weight to be afforded to a draft development control plan fall away. In light of the agreement between the Applicant and the Respondent Council in their supplementary submissions that the weight to be afforded to the DCP (as a mandatory relevant consideration pursuant to s 79C(1)(a)(iii) of the EPA Act) is uncontroversial, it is not necessary to set out the submissions concerning the weight to be afforded to a draft development control plan as a policy. This issue need not be considered or determined.

The Respondent Council’s case for refusal

73. In its statement of facts and contentions filed on 4 May 2017, the Respondent Council advanced the following six primary contentions (paraphrased) as justifying the refusal of development consent to the proposed development:

1. The proposed development would not comply with the proposed amalgamation patterns for the Precinct and would result in the unacceptable isolation of adjoining properties;

2. The proposed development would, contrary to the ADG, provide insufficient amenity for its residents;

3. The proposed development would, due to being non-compliant with the applicable development standards and controls, be inconsistent with the principle aims of the LEP and the objectives of the R4 – High Density Residential zone;

4. The proposed development would, due to being non-compliant with the applicable development standards and controls, be inconsistent with the principal aims of the DDCP;

5. The proposed development would not provide sufficient car parking, create unacceptable traffic and parking issues in and around Pinnacle Street, and would not provide for acceptable waste collection arrangements (and, consequently, would have unacceptable amenity impacts); and

6. The proposed development, for all of the above reasons, would not be in the public interest – contrary to s 79C(1)(e) of the EPA Act – because it would be unacceptably inconsistent with the planning controls and would have unacceptable adverse impacts on both intended occupants and neighbours.

74. As is to be expected, each of the Respondent Council’s contentions was supported by a number of detailed particulars (some of which were no longer pressed at the hearing or were not the subject of oral or written submissions).

75. However, throughout the hearing, the central issue between the Applicant and the Respondent Council crystallised as that of the above mentioned first contention. In both its oral opening and closing submissions, the vast majority of the Respondent Council’s submissions concerned this issue of the breach of the amalgamation pattern and the allegedly unacceptable consequential isolation of adjoining properties. Indeed, in the Respondent Council’s written closing outline of submissions, this was the only contention substantively addressed.

76. Thus, the Applicant was correct when it observed that “[t]he main issue that remains in contention concerns the alleged non-compliance with the proposed amalgamation pattern for the Precinct set out in the [DDCP]” (Applicant’s closing outline of submissions, par 3). It is also apparent that this was the principal concern of most of the objectors. Of course, the Court has still fully considered the Respondent Council’s submissions, contentions and particulars and expert evidence, together with the other issues raised by the objectors.

The Respondent Council’s principal contention

77. As already stated, the principal contention of the Respondent Council in these proceedings is that the proposed development should be refused because it would not comply with the amalgamation controls in the DCP and would isolate 676 Kingsway and 7 Pinnacle Street (to the east of the Subject Site) and 11 and 13 Pinnacle Street (to the west of the Subject Site). Consequently, the Respondent Council claimed that the proposed development is inconsistent with the objectives of those DCP amalgamation controls and the objectives of the relevant R4 – High Density Residential zone.

78. In order to make good this contention, the Respondent Council posited that the starting point is to consider the well-established principles relating to the amalgamation of land and isolation of neighbouring land set out in Karavellas v Sutherland Shire Council [2004] NSWLEC 251 (the Land and Environment Court Isolation of Site Planning Principles (‘the Principles’)). It was submitted that the Principles apply in circumstances where there is a breach of an amalgamation pattern and/or where a site may be isolated. The Principles are as follows:

Planning Principles

[17] The general questions to be answered when dealing with amalgamation of sites or when a site is to be isolated through redevelopment are:

Firstly, is amalgamation of the sites feasible?

Secondly, can orderly and economic use and development of the separate sites be achieved if amalgamation is not feasible?

[18] The principles to be applied in determining the answer to the first question are set out by Brown C in Melissa Grech v Auburn Council [(2004) 140 LGERA 1;] [2004] NSWLEC 40. The Commissioner said:

Firstly, where a property will be isolated by a proposed development and that property cannot satisfy the minimum lot requirements then negotiations between the owners of the properties should commence at an early stage and prior to the lodgement of the development application.

Secondly, and where no satisfactory result is achieved from the negotiations, the development application should include details of the negotiations between the owners of the properties. These details should include offers to the owner of the isolated property. A reasonable offer, for the purposes of determining the development application and addressing the planning implications of an isolated lot, is to be based on at least one recent independent valuation and may include other reasonable expenses likely to be incurred by the owner of the isolated property in the sale of the property.

Thirdly, the level of negotiation and any offers made for the isolated site are matters that can be given weight in the consideration of the development application. The amount of weight will depend on the level of negotiation, whether any offers are deemed reasonable or unreasonable, any relevant planning requirements and the provisions of s 79C of the Environmental Planning and Assessment Act 1979.

[19] In the decision Cornerstone Property Group Pty Ltd v Warringah Council [(2004) 139 LGERA 245;] [2004] NSWLEC 189, I extended the principles of Brown C to deal with the second question and stated that:

…[T]he key principle is whether both sites can achieve a development that is consistent with the planning controls. If variations to the planning controls would be required, such as non compliance with a minimum allotment size, will both sites be able to achieve a development of appropriate urban form and with acceptable level of amenity.

To assist in this assessment, an envelope for the isolated site may be prepared which indicates height, setbacks, resultant site coverage (both building and basement). This should be schematic but of sufficient detail to understand the relationship between the subject application and the isolated site and the likely impacts the developments will have on each other, particularly solar access and privacy impacts for residential development and the traffic impacts of separate driveways if the development is on a main road.

The subject application may need to be amended, such as by a further setback than the minimum in the planning controls, or the development potential of both sites reduced to enable reasonable development of the isolated site to occur while maintaining the amenity of both developments.

79. In addressing the first general question posed by the Principles, the Respondent Council asserted that the Court could not be satisfied that the amalgamation of the Subject Site with 7, 11, 13 Pinnacle Street and 676 Kingsway is not feasible. The Respondent Council claimed that the appeal ought to be dismissed on this basis alone.

80. With respect to 7 Pinnacle Street and 676 Kingsway, the Respondent Council asserted that “[t]here is no evidence of any attempts to amalgamate with 7 Pinnacle Street and 676 Kingsway”. This was said to be despite the fact that these properties, although not part of the DCP amalgamation pattern, would be isolated by the proposed development. They would be isolated because, inter alia, they cannot meet the DCP minimum street frontage requirement for residential flat building development of 26 metres (being about 18 metres in width): citing cl 1.2 of Chapter 6. Moreover, these properties would not satisfy other relevant ADG and DCP criteria, such as those criteria pertaining to a high standard of residential amenity.

81. With respect to 11 and 13 Pinnacle Street, the Respondent Council asserted that “[t]here is no evidence of any real attempts to negotiate with the owners of 11-13 Pinnacle Street”. The Respondent Council identified the relevant evidence as: documents lodged with the development application demonstrating offers of $1.21 – $1.452 million; the note in the Respondent Council’s assessment report to the effect that the property owners “stated that they were contacted by the real estate [agent] and received a verbal offer to the value identified in the valuation reports” (said to be the valuation reports lodged with the development application estimating the land value at $1.05 – $1.2 million); a document referring to an auction involving the offer of 11 and 13 Pinnacle Street for sale (as part of a four-property offer); and an e-mail attesting to a phone conversation with a real estate agent concerning an offer to purchase 11 and 13 Pinnacle Street (which Mr Lawler said that he was unaware of and allegedly occurred after the commencement of these proceedings). In those circumstances, the Respondent Council concluded that the Court cannot be satisfied that reasonable efforts were made to amalgamate the Subject Site with 11 and 13 Pinnacle Street.

82. To bolster this assertion, the Respondent Council also criticised the valuations which underpinned the Applicant’s offers to purchase 11 and 13 Pinnacle Street. It was said that, on examining the comparative sales, the relevant valuations did not value 11 and 13 Pinnacle Street on the basis of their highest and best use under the R4 – High Density Residential zoning (an 8 storey residential flat building) but as standalone properties containing residential dwellings: cf the principle established in Commonwealth Custodial Services Ltd v Valuer-General (2006) 148 LGERA 38; [2006] NSWLEC 400 at [13]-[15]. Thus, the Respondent Council argued that the Court cannot be satisfied that reasonable offers were made because the relevant offers were predicated on fundamentally flawed valuations.

83. In addressing the second general question posed by the Principles, the Respondent Council asserted that the proposed development would not allow the orderly and economic use of the neighbouring properties to the Subject Site even if the Court was to find that reasonable efforts had been made to amalgamate the relevant lots. Conversely, if the proposed development was to be approved, the above mentioned neighbouring land to the Subject Site would be precluded from achieving an appropriate urban form with an acceptable level of amenity.

84. With respect to 7 Pinnacle Street and 686 Kingsway, the Respondent Council claimed that “[t]here is no evidence that the owners of 7 Pinnacle Street and 686 Kingsway will be able to amalgamate with the public housing site to the west in the near future”. In fact, the Respondent Council was advised relatively recently by the relevant Government agency that it has no such intention.

85. Thus, the Respondent Council asserted that both of these properties would be isolated if the proposed development was to be approved. The Respondent Council submitted that, relying on Mr Reid’s evidence, a development on an amalgamated 7 Pinnacle Street and 686 Kingsway site would: be unlikely to be economically viable, not provide a high standard of urban design, and not achieve the objectives of the R4 – High Density Residential land use zone or the aims of the LEP: (Exhibit 2, p 7). Moreover, the Respondent Council submitted that the relevant concept plans for such a development do not meet the applicable setback and building envelope controls and, therefore, cannot establish that a compliant development would satisfactorily achieve the desired 2:1 floor space ratio. Consequently, the “exclusion of these properties will severely impact the realisation of their full development potential”.

86. With respect to 11 and 13 Pinnacle Street, the Respondent Council similarly submitted that the relevant concept plans for these isolated sites do not meet the applicable setback and building envelope controls and, therefore, do not establish that a compliant development could satisfactorily achieve the desired 2:1 floor space ratio. The Respondent Council rejected the planning evidence of Mr Black that the setback issues could be adequately addressed by erecting visual privacy screens or removing windows. Ultimately, the Respondent Council submitted that the Applicant has provided insufficient evidence to show that 11 and 13 Pinnacle Street could be developed in an orderly and economic manner. On the contrary, the Respondent Council emphasised Mr Reid’s evidence that “it would be very difficult” to build a compliant residential flat building on 11-13 Pinnacle Street that achieves the desired floor space ratio if the Applicant’s development was to be built (Transcript, 19 July 2017, p 55).

87. Moreover, the Respondent Council submitted that this conclusion is corroborated by the fact that the owners of 11 and 13 Pinnacle Street are unlikely to be able to address any resulting isolation of their properties by amalgamating with properties to their west. This is because of the Respondent Council’s above mentioned strip of operational land, which divides these properties from those properties to the west and allegedly precludes (in its current location) an amalgamated development. The Respondent Council said that this strip of land could only be re-located somewhere proximate to its current location to accommodate the requisite drainage infrastructure for the Precinct: relying on the evidence of Mr Rayner.

88. Thus, for all of the above reasons, the Respondent Council concluded that the proposed development should not be approved because it fails to comply with the DCP amalgamation patterns, unacceptably isolates neighbouring properties, and (consequently) offends various important objectives of the EPA Act, LEP and DCP. For example, the proposed development was said to offend the objective of the EPA Act to promote “the orderly and economic use and development of land”: s 5(a)(ii).

The Applicant’s case for approval

89. As identified above, the Applicant’s submissions in these proceedings were predominately directed at rebutting the Respondent Council’s contention that the development application should be refused because it breaches the DCP amalgamation pattern and would result in the isolation of neighbouring properties. The Applicant structured its submissions in the following way: first, the Applicant denied that 11 and 13 Pinnacle Street would be isolated by the proposed development; and secondly, the Applicant submitted that 676 Kingsway and 7 Pinnacle Street were not included in the DCP amalgamation pattern and, in any event, would not be isolated by the proposed development. Yet, the Applicant prefaced these submissions by articulating what it said is the proper approach to interpreting and applying the DCP.

The proper approach to the DCP

90. The Applicant contended that the Respondent Council’s approach to the DCP – in particular, the DCP’s amalgamation patterns for the Precinct – invites the Court to erroneously “slavishly follow the dictates of the DCP”: Notaras v Waverly Council [2006] NSWLEC 669 at [19]. Ultimately, the Applicant maintained that it would be wrong to accord the DCP the same weight that is to be accorded to a legislative instrument or statute.

91. The Applicant submitted that it would be wrong for the Court to inflexibly apply the DCP. In contrast, the Applicant asserted that the EPA Act explicitly requires the Court to “be flexible in applying those provisions and allow reasonable alternative solutions that achieve the objects of those standards for dealing with that aspect of the development”: s 79C(3A)(b). According to the Applicant, a flexible approach is also consistent with the relevant case law: NFF at 410 Pitt Street Pty Ltd v Council of the City of Sydney [2016] NSWLEC 1181 at [39]-[42]; Bettar v Council of the City of Sydney [2016] NSWLEC 1456 at [40]; and Trinvass Pty Ltd v Council of the City of Sydney [2015] NSWLEC 151 at [67]-[69].

92. Hence, the Applicant pressed the Court “to eschew a strict approach to compliance with the provisions of the [DDCP], and consider instead whether their objects, and the objectives of the zone in the LEP, could also be achieved other than by strict compliance with the block pattern in the [DDCP]”.

93. On this basis, the Applicant made the following submissions on the amalgamation patterns for the Precinct. First, the Applicant emphasised that the proposed amalgamation pattern is not an end in itself but is a proposed approach toward realising the objective of allowing land in the Precinct to be effectively developed as well-designed residential flat building land with a desirable floor space ratio: cl 1.1 of Chapter 6 of the DCP.

94. Secondly, the Applicant submitted that the fact that 676 Kingsway, 678 Kingsway (9 Pinnacle Street) and 7 Pinnacle Street are not included in the specified amalgamation patterns is explained by the decision of the Respondent Council to exclude those properties because of the multi-dwelling development on them. This is significant, so the Applicant submitted, because the assumption underlying this explanation – that those properties would be incapable of high density residential development – has been shown to be incorrect: 678 Kingsway (9 Pinnacle Street) has been acquired for the proposed development and the social housing estate adjacent to 676 Kingsway and 7 Pinnacle Street may well be redeveloped in accordance with a new government policy for social housing: NSW Government, Future Directions for Social Housing in NSW.

95. Thirdly, the Applicant submitted that if the amalgamation pattern is followed, then the Subject Site would be incapable of achieving its maximum floor space ratio and remain under-developed (contrary to the objectives for the Precinct).

96. Fourthly, the Applicant juxtaposed the manifest flexibility of the Respondent Council in applying the amalgamation pattern with respect to other development applications (citing three approved developments in the vicinity of the proposed development) with its allegedly rigid approach in the circumstances of the present development application.

The alleged isolation of 11 and 13 Pinnacle Street

97. Whether the proposed development is considered under the provisions of the DCP or according to the Principles, the Applicant claimed that it would not result in the unacceptable isolation of 11 and 13 Pinnacle Street.

98. First, the Applicant argued that the properties are not isolated because: the combined land is not a constrained site; the combined land has been shown by the Applicant to be able to achieve a floor space ratio of 1.93:1; and the two lots could be combined with 15 and 17 Pinnacle Street to create a viable development (notwithstanding the existence of the Respondent Council’s strip of operational land, which was said by Mr Black not to be an insurmountable obstacle).

99. Secondly, the Applicant contended that it is significant that the Respondent Council did not criticise the Applicant’s schematic concerning the development potential of 11 and 13 Pinnacle Street until the hearing of these proceedings, despite being provided with this schematic last year. The Applicant relied on Mr Black’s evidence that this schematic demonstrates that a suitable development can be achieved on this land. With respect to Mr Reid’s wide-ranging oral evidence challenging whether the schematic sufficiently demonstrates this, the Applicant submitted that such evidence should be accorded little weight because: no such evidence was included in Mr Reid’s contribution to the Joint Expert Report; this omission was unjustifiable; those circumstances demand the inference that Mr Reid did not consider these issues to be important until the hearing; and Mr Reid gave excessive weight to the strict application of numerical standards in the ADG and DCP.

100. Moreover, the Applicant submitted that the Respondent Council’s approach to criticising the schematic (relying on Mr Reid’s evidence) erroneously adopted an approach of treating the schematic “as a mini-class 1 proceeding relating to a proposed development on the adjoining site”: cf Karavellas v Sutherland Shire Council at [19]; Shrik Petersham Pty Ltd v Inner West Council [2016] NSWLEC 1337 at [121]; and Limahart Pty Ltd v Kogarah Council [2006] NSWLEC 415 at [28]-[32]. In contrast, the Applicant said that “[a]ll that is required to be shown is the preparation of an envelope which indicates height, setbacks and resultant site coverage of sufficient detail to understand the relationship between the subject application and the other site and the likely impacts the developments will have on each other, particularly solar access, privacy impacts and traffic impacts”.

101. Thirdly, the Applicant contended that Mr Black’s evidence adequately rebutted the relevant criticisms of Mr Reid. In this respect, the Applicant said that Mr Black’s evidence was that: the proposed development in the schematic would not require a driveway for the purpose of waste collection under the DCP and it is likely that less than 50% of the street frontage would be required; the revised overshadowing diagrams demonstrate that there would not be unacceptable overshadowing of the building to the south; if the building form was shifted to the north and the unit layout altered, the development could be more consistent with the “stepping down notion in the envelope patterns”; a building height of 21 metres was a reasonable assumption; and there was no apparent reason why the Respondent Council’s strip of operational land could not be bought and properly accommodated into the proposed development in the schematic.

102. Fourthly, to address the feasibility issue relating to the Principles (as identified in Karavellas v Sutherland Shire Council), the Applicant submitted that reasonable offers of up to $2 million have been made and rejected. Given this, it was said that the “Court can comfortably reject the suggestion that Mr Lawler did not receive the offer, given that the offer was clearly communicated to Mr Lawler’s agent, and the agent responded by saying that the minimum asking price was $2.7m”. In fact, the Applicant claimed that it is significant that the Respondent Council did not dispute that the valuation reports underpinning the relevant offers were fair until the hearing.

103. Regardless, the Applicant’s fresh valuation report (Exhibit C) was said to prove that the proper value of each property listed in the Valuer-General document handed up by Mr Lawler (taking into account the highest and best use of the land but excluding those sales with development application approval) was $1.7 million. This was said to be corroborated by the Respondent Council’s own (higher) valuation of $1.8 million. Thus, the offer of $2 million for each lot was, according to the Applicant, reasonable. Therefore, as the DCP recognises, the owners of 11 and 13 Pinnacle Street cannot now expect to achieve the full permitted floor space ratio.

The alleged isolation of 676 Kingsway and 7 Pinnacle Street

104. Although 676 Kingsway and 7 Pinnacle Street were not included as amalgamated development sites in the DCP, the Applicant claimed that these lots would not be isolated by the proposed development. This is because these lots could be amalgamated with the adjoining social housing estate in the future or appropriately developed as a standalone development.

105. The Applicant maintained that the former is a genuine possibility because the most recently released housing policy of the NSW Government is to ‘fast-track’ the redevelopment of social housing land from low-density to high-density public-private integrated developments. The Applicant reasoned that once the Precinct has been transformed by residential tower block development, the low-density social housing estate will be “crying out for [re]development”. Hence, the lack of an immediate intention by the Government to proceed down that path was said to be of no significance. In the Applicant’s words, “it is only necessary for the [A]pplicant to demonstrate that amalgamation of those sites is a feasible possibility, not that it is close to fruition”. The Applicant concluded that its relevant schematic amply demonstrated that such an amalgamated site could achieve the desirable 2:1 floor space ratio.

106. Nevertheless, even if 676 Kingsway and 7 Pinnacle Street was developed as a standalone development without the social housing estate, the Applicant contended that (relying on the evidence of Mr Black) an 8 storey residential flat building could be built that complied “with the core requirements of the relevant controls, including the Apartment Design Guide, FSR of 1.7:1, landscaped area of 36%, and compliance with cross-ventilation, solar access, communal open space and side boundary setbacks with acceptable pedestrian and vehicular access”. The Applicant conceded that there may be amenity issues with the schematic design yet denied that these issues could not be overcome.

107. With respect to Mr Reid’s evidence on the standalone development of 676 Kingsway and 7 Pinnacle Street concerning the site width, setbacks, waste collection and pedestrian access, the Applicant submitted that: the economics of the schematic proposed development is not to be taken into account under the Planning Principles (and would require economic feasibility analysis); although the proposed development would not comply with the applicable setback control, it would achieve the objective of that control (visual privacy) by not featuring any windows facing the subject site; the waste disposal issue is not to be taken into account under the Principles (and would require expert evidence); the site width issues (despite not complying with the relevant control) could be overcome if the relevant merits matters are considered satisfactory, as is confirmed by previous approvals by the Respondent Council of such non-compliant development; and the proposed development would have the benefit of at least two possible access sites (from the Kingsway and from the proposed pedestrian walkway on the Subject Site).

104. In any event, the Applicant reiterated that many of these detailed design issues need not be considered by the Court in considering the present development application.

Other planning issues

109. Save for the issue of floor to floor heights, the Applicant suggested that the remaining planning issues contained within contentions 1-4 of the Statement of Facts and Contentions appeared to have been resolved by the town planning experts in joint conference.

110. With respect to the floor to floor heights issue (the proposed floor to floor height of 3 metres is less than the minimum requirement of 3.1 metres), the Applicant submitted that such non-compliant floor to floor heights have been approved both by the Respondent Council and the Court: Trinvass Pty Ltd v Council of the City of Sydney at [69].

Consideration

111. The critical issue in this case is whether the proposed development – being inconsistent with the preferred amalgamation patterns set out in the DCP – will result in the unacceptable isolation of adjoining properties and thereby give rise to an unacceptable planning outcome. Whereas it is preferable for a (presumably carefully formulated) DCP amalgamation plan to be given significant weight in order to reinforce the desirability of orderly planning based on a strategic assessment of the needs of a district or locality, the Court has carefully considered whether the preferred amalgamation pattern here should be complied with irrespective of the material changed circumstances that have arisen in the Precinct. The Court has concluded that a strict or inflexible adherence to the DCP amalgamation plan in the present circumstances is inappropriate. In this case, a highly relevant contextual circumstance has arisen since the DCP amalgamation plan options were first formulated in the DDCP.

112. The Court accepts the Applicant’s proposition that the relevant amalgamation plan in the DCP (which remained unchanged from the DDCP) is most probably predicated on an assumption that extant multi-dwelling sites are unlikely to be redeveloped as high density development. Hence, in both amalgamation plan options for the Precinct, 7 and 9 Pinnacle Street (678 Kingsway), 676 Kingsway and the social housing estate at 672-674 Kingsway were excluded. Although the DCP does not explain the rationale for excluding these lots from the amalgamation plans (which are designed to facilitate orderly high density development), the note to the DCP amalgamation plan identified as option 1 (see above) is inferentially indicative of the underlying assumption that such sites would simply not be available for such redevelopment. The note says: “Note: Sites with existing multi dwelling development have not been included in the amalgamation pattern”.

113. Under the amalgamation plans, these “excluded” sites are effectively wedged in between higher density development to the east, south and west. In short, these sites are anomalous in the R4 – High Density Residential zone, with the only apparent common factor being that the excluded lots are already developed with low to medium density housing. Although the planning logic underlying this approach may not be easily explicable, the reality is that part of the Precinct is left in an amalgamation plan “void”. It is in this context that the Court finds itself considering a situation that might be called a “game changer”: the Applicant has acquired the large multi-unit property comprising 678 Kingsway (9 Pinnacle Street), together with the adjoining properties at 680 and 682 Kingsway – with 678 Kingsway being entirely outside both amalgamation plan options in the DCP. In the normal course, one might observe that the mere acquisition of land by an applicant would not have been “game changing” if the land acquired was beyond the R4 – High Density Residential zone or was not contained within the Precinct. However, that is not what has occurred in this case.

114. Given that 678 Kingsway (9 Pinnacle Street) has been purchased by the Applicant together with the adjoining properties to the west fronting the Kingsway, the Court considers that it must view the preferred amalgamation plan options pragmatically. The DCP amalgamation plans should not be slavishly followed without regard to the practical outcomes of these plans and the proper consideration of the end that those plans aim to achieve. Moreover, the amalgamation plans must be understood in the overarching context of the regulatory regime created by the EPA Act and relevant environmental planning instruments.

115. Hence, the Court is obliged to consider the implications of an applicant acquiring a substantial parcel of land (which was excluded from the amalgamation plans designed to facilitate high density development in the Precinct) in circumstances where such land was most probably only excluded because the acquired land is characterised by extant multiple dwelling development. In this respect it should be emphasised that there is no accepted principle that such acquisitions should be ignored or excluded from consideration. In fact, logically, the opposite approach is appropriate.

116. Furthermore, in the context that alternative feasible development proposals might be consistent with the overarching objectives of the R4 – High Density Residential zone and the DCP, indeed perhaps even more consistent, there is no accepted principle that owners of such acquired sites should be denied consent for an appropriate development simply because their land is not included in a DCP amalgamation plan. In short, it is valid to consider that the Applicant’s acquisition of sites outside the amalgamation plans creates the possibility of more properties than initially contemplated being capable of achieving higher density development consistently with the R4 – High Density Residential zone and purpose of the Precinct.

The alleged isolation of 7 Pinnacle Street and 676 Kingsway

117. So, having decided that it is a highly material consideration that the Subject Site has been acquired with a view to high density redevelopment, the next question for the Court is whether the properties at 7 Pinnacle Street and 676 Kingsway would be truly isolated if the proposed development was to be approved. Although those neighbouring properties to the east of the Subject Site are outside the area of the amalgamation plans, the undesirability of any neighbouring land being left isolated demands careful consideration. The factor of “isolation” can be considered from two perspectives: first, can the potentially isolated blocks be acceptably developed, as a single site, in a manner which accords with the relevant planning controls? Secondly, can the alleged isolation of the adjoining blocks be overcome in the future by way of amalgamation with other adjoining land?

118. For similar reasons to those set out above, it is not to be assumed that 7 Pinnacle Street and 676 Kingsway cannot be appropriately redeveloped as higher density development simply because these properties are outside of the amalgamation plans. Any suggestion that these potentially isolated blocks may be given less determinative weight with respect to adverse isolation impacts because they are beyond the area of the amalgamation plans has no merit. If a neighbouring block might potentially become isolated by redevelopment, it is clearly a material consideration regardless of any amalgamation plan. However, in considering the alleged isolation of 7 Pinnacle Street and 676 Kingsway, the Court agrees with the proposition put by Mr Lazarus, counsel for the Applicant, that: “it is only necessary for the [A]pplicant to demonstrate that amalgamation of those sites is a feasible possibility, not that it is close to fruition”.

119. In this case, the Court is satisfied that combining 7 Pinnacle Street and 686 Kingsway would create a development site that – if developed to meet the R4 – High Density Residential zone objectives – could be made compliant with the critical planning controls. The relevant schematic provided by the Applicant for this aggregated neighbouring site satisfactorily demonstrated that a high density development proposal could be made to work. The Court, at this stage, when considering the development of the Subject Site, as distinct from the adjoining land, is not required to exhaustively consider a hypothetical proposal for the adjoining land. The Court is only required to accept that a threshold, in general schematic terms, is passed to be confident that a high density future development is feasible.

120. The Court does not accept the Respondent Council’s propositions that the development of these adjoining merged sites: is unlikely to be economically viable; would not provide a high standard of urban design; or would not achieve the objectives of the R4 – High Density Residential land use zone and the aims of the LEP. So, even if only 7 Pinnacle Street and 676 Kingsway are amalgamated (rather than being further amalgamated with the adjoining social housing estate property to the east), the Court is satisfied that a residential flat building could be built that complies with the critical requirements of the relevant controls. The Court notes that the Applicant conceded that there may be amenity issues with the currently mooted schematic design, yet it persuasively submitted that these issues could, with appropriate refinement, be overcome.

121. Turning to the second of the two perspectives by which one is to consider the alleged isolation of land, given that both the hypothetically combined 7 Pinnacle Street and 686 Kingsway site and the adjoining public housing site are within the R4 – High Density Residential zone, the Court considers that (at some stage) these sites are likely to be brought into closer accord with the desired development under this zone. This means that the current low to medium density housing sites will likely be subsumed into some form of higher density residential development. If this prediction is correct, then the likelihood of these sites being amalgamated as part of the development application and assessment process is high. Accordingly, from this second perspective, the alleged isolation of 7 Pinnacle Street and 686 Kingsway is again negated.

122. In passing, the Court appreciates that the social housing estate site might not “become available” for redevelopment in the immediate future, despite the most recent policy pronouncement in its Future Directions for Social Housing in NSW document. During the Court’s view of the Subject Site and its locale, it was apparent that the current lower density housing on the social housing estate clearly demonstrates design excellence in an attractive landscaped setting and so, arguably, could be seen as providing relief (in an urban design sense) from its inevitably higher density neighbouring sites.

123. However, the combination of factors such as the land use zoning, the largeness of the site and the likelihood that, as a social housing site, it will gradually depart from the requisite housing standards, means that the site will increasingly become more amendable to redevelopment. The fact that this public housing site might not become available “tomorrow”, does not negate the potential that it could be amalgamated with the combined 7 Pinnacle Street and 686 Kingsway site, thereby overcoming the isolation claim.

124. It follows from the Court’s conclusion on amalgamation that there was no obligation on the Applicant to treat with the owners of 7 Pinnacle Street and 676 Kingsway so as to acquire and then amalgamate these sites with the Subject Site. As Brown C confirmed in Melissa Grech v Auburn Council, there is a precondition before a proponent of development should seek to acquire adjoining land, that is: “…where a property will be isolated by a proposed development and that property cannot satisfy the minimum lot requirements…”. It is at that point that “…negotiations between the owners of the properties should commence at an early stage and prior to the lodgement of the development application”. Accordingly, the fact that the Applicant in this case appears to have never offered to acquire 7 Pinnacle Street and 676 Kingsway does not make it vulnerable to criticism.

125. An important separate consideration with respect to the likely impact of the proposed development on 7 Pinnacle Street and 686 Kingsway is the concern expressed by Ms Sams of 1/7 Pinnacle Street regarding the detrimental effects of overshadowing on her townhouse (which is also occupied by her elderly mother) and the adjoining townhouse at 2/7 Pinnacle Street. In considering Ms Sams’ concern regarding overshadowing, the Court notes that the Respondent Council did not submit that the requisite standards regarding access to sunlight will not be met. Although there will be a reduction of direct sunlight reaching 7 Pinnacle Street if the Subject Site is developed as proposed, the Court is satisfied that the requisite standards will be met. In accepting that the requisite standards will be met, the Court surmises that Ms Sams would most probably still maintain her understandable disquiet with respect to the reduction of access to direct sunlight which 7 Pinnacle Street currently enjoys.

126. Notwithstanding this, the Court is obliged to principally assess the proposed development against the requisite standards; rather than endeavouring to maintain the obvious personal advantages of the status quo enjoyed by Ms Sams. Frequently, persons objecting to change find that development standards or a rezoning do not meet their expectations. Yet, sadly for these persons with higher expectations based on an enjoyment of what was hitherto their living conditions in their home or neighbourhood, new standards are invariably a compromise designed to secure the best achievable planning outcomes, to meet often competing objectives, and balance numerous interests.

127. In essence, planning controls are an instance of utilitarianism aimed at achieving the greatest good for the greatest number. A common consequence is that some individuals will lose some of their pre-development amenity. The underpinning concept was well expressed by Emerton J in The Sisters Wind Farm Pty Ltd v Moyne Shire Council wherein Her Honour explained, at [91], the essence of the task of the planning decision-maker: “….it must endeavour to integrate the policies relevant to the issue to be determined and balance any conflicting objectives in favour of net community benefit and sustainable development for the benefit of present and future generations. The overriding consideration is the net community benefit”.

The alleged isolation of 11 and 13 Pinnacle Street

128. Turning to consider the properties at 11 and 13 Pinnacle Street, the Court has considered whether these sites will become isolated, in a development sense, by not being developed in concord with those adjoining parcels of land within the Subject Site. The Court has concluded that the submissions from the Applicant are persuasive, highlighting as they do that there are a range of options for the development of these properties, including the schematic relied upon by the Applicant. The Court accepts that it is only necessary for the Applicant to demonstrate that there are feasible options for the development of these adjoining sites and that it need not provide a more detailed hypothetical development proposal akin to what one would expect with a development application.

129. So, putting to one side the inconsistency with the amalgamation plans, the Court is satisfied from Mr Black’s evidence, in preference to Mr Reid’s evidence, that the schematic for the combined 11 and 13 Pinnacle Street site shows a satisfactory: potential development envelope (which indicates acceptable height, setbacks and resultant site coverage); and relationship with the Subject Site and the properties on the southern side of Pinnacle Street (having particular regard to the likely impacts the relevant developments will have on each other, solar access issues, privacy issues and traffic management issues). As with the sites to the east of the Subject Site, it is to be expected that when such development proposals in the Precinct crystallise, there will be numerous refinements to the development contemplated in the schematic to ensure that all potential issues are addressed.

130. Accordingly, the Court rejects the Respondent Council’s submission that the Applicant has provided insufficient evidence to show that the combined 11 and 13 Pinnacle Street site can be developed in an orderly and economic manner. Although the development of these properties as an integrated whole must be achieved with adherence to the requisite critical standards, the Court rejects Mr Reid’s opinion that “it would be very difficult” to build a compliant residential flat building on 11-13 Pinnacle Street. Further, as the Court explores in the next paragraph, it is not necessarily the case that a future developer is limited only to the combined site of 11-13 Pinnacle Street.

131. The Court is not convinced that the public drainage ‘operational’ laneway that separates 11-13 Pinnacle Street and the Subject Site from land to the west is an insurmountable hurdle. Apart from the fact that the laneway has in more recent times “come into play”, due to the Respondent Council reclassifying its status and allowing it to be available for sale (providing its drainage and access functions are satisfactorily relocated), it is conceivable that the current function of the laneway might be preserved (for drainage purposes and public access way purposes) whilst being incorporated into a larger development proposal that embraces, for example, 11, 13, 15 and 17 Pinnacle Street.

132. Indeed, the Court made such an observation in the course of the hearing, referring to precedents where such challenges (some featuring significantly greater legal and planning obstacles) have been overcome in other places. In particular, the Court referred to an example in Victoria of the Westfield Southland Shopping Centre, which incorporated a double storey sky bridge shopping mall over the ten lanes of the Nepean Highway in Cheltenham, a south-eastern suburb of Melbourne. Whilst the public thoroughfare of the Highway (with all its associated services) was maintained, the development of the Southland Shopping Centre occurred on both sides of the Highway, linked by the sky bridge shopping mall. In the context of such an example, bridging the small laneway would seem to be a minor challenge to overcome. It does not, and should not, constitute a fundamental restraint preventing the development of 11-17 Pinnacle Street as a consolidated site. Moreover, it certainly does not, in the Court’s opinion, contribute to any alleged development restraint on 11 and 13 Pinnacle Street as one block or 15 and 17 Pinnacle Street as another block or all four properties together.

133. Thus, the Court does not accept that the existence of the laneway constitutes a compelling reason why any of these properties are likely to become isolated by reason to the Subject Site being developed as proposed by the Applicant.

134. For the above reasons and on the basis of the Court’s acceptance of the feasibility of the Applicant’s proposed schematic, the Court does not accept that 11 and 13 Pinnacle Street will be isolated by the proposed development of the Subject Site. Therefore, the Principles highlighted in Karavellas v Sutherland Shire Council and the cases referred to therein do not require adherence in this case; the Principles are not enlivened.

135. Although planning principles are principles of general application, it is important to understand the factual circumstances in which such principles originated and developed. In this case, as identified above, the relevant Principles relate to the “[i]solation of site by redevelopment of adjacent site(s) - role of Court in assessing consolidation negotiations”. As identified above, these principles were conceived in, inter alia, Melissa Grech v Auburn Council and Cornerstone Property Group Pty Ltd v Warringah Council and crystallised in Karavellas v Sutherland Shire Council. It is important to emphasise that in each of these cases, the issue of isolation concerned a relatively small single lot. In each case, the concern was that the proposed development of a higher density development on the subject site would, effectively, complete the entrapment of the lot, such that the lot could not reach the development potential encouraged by the applicable land use zoning.

128. In Karavellas v Sutherland Shire Council, the proposed residential flat buildings were to be located on the eastern and southern border of the isolated lot. However, the isolated lot was already hemmed in by a major road to the north and a residential flat building on its western border. In Melissa Grech v Auburn Council and Cornerstone Property Group Pty Ltd, the proposed residential flat building was to be located on the southern border of the isolated lot. However, the isolated lot was already hemmed in by roads on all other borders. In Cornerstone Property Group Pty Ltd v Warringah Council, the proposed mixed commercial and residential flat building and house were to be located on the southern border of the isolated lot. However, the isolated lot was already hemmed in by a cinema on its northern border and a major road on its eastern border (leaving only a small western border that adjoined a residential property). It was in these factual circumstances that the commissioners devised and applied isolation principles.

129. The Court is of the opinion that in the circumstances before it with respect to the Applicant’s proposal within the Precinct, there is a clear distinction to the circumstances described in the above three cases, where the concern of isolation was much more apparent.

130. Nevertheless, the Court has still examined the question of whether the Applicant took reasonable steps to amalgamate 11 and 13 Pinnacle Street with the Subject Site. As explained earlier, the Respondent Council argued that the Court could not be satisfied that reasonable efforts were made to amalgamate the Subject Site with those properties, in that the owners were not offered realistic acquisition prices by the Applicant. Despite the relevant evidence before the Court outlined above – including evidence that the Applicant had made overtures to the owners to acquire their properties via real estate agents – there was significant dispute as to what the final highest offer prices were and whether those prices reflected true market value given the development potential of such land.

131. In the context of the objector Mr Lawler having produced a table of recent property sales on Pinnacle Street from the Valuer-General’s website (Exhibit 7) and there appearing to be a discrepancy between those land values and the land values relied on by the Applicant (which had formed the basis of the offers that had been made to the Lawlers and Murrays), the Court gave a ruling on 19 July 2017. In that ruling, the Court stated that:

… none of the valuation reports with respect to 11 and 13 Pinnacle Street as tendered into evidence in Exhibit A – the Application Class 1 folder – adequately assist me in considering the amalgamation issue as they appear to have all been prepared in a constrained fashion limiting their respective valuation to a non-amalgamation scenario. These valuations variously fail to comprehensively identify relevant zoning and in particular the implications of these two properties being included in the DDCP preference for these lots to be amalgamated. The Court is of the view that it needs to have at least some valuation evidence which addresses the amalgamation scenario.

140. The Court then gave leave for the Applicant and the Respondent Council to respond to the Court’s concerns by producing new valuation evidence on the last day of the hearing, with each valuer being required to prepare their valuations in the context of the R4 – High Density Residential zoning and the then DDCP amalgamation plan. The new valuation reports were placed into evidence as Exhibit C and Exhibit 8. The conclusions of these reports were remarkably close: with $1,700,000 and $1,800,000 being the valuations for 11 Pinnacle Street in the Exhibit C and Exhibit 8 reports respectively; and $1,710,000 and $1,800,000 being the valuations for 13 Pinnacle Street in the Exhibit C and Exhibit 8 reports respectively.

141. After considering the further valuation evidence and reviewing Mr Lawler’s Valuer-General’s table (Exhibit 7) – which, upon analysis, revealed that many of the sales of properties listed therein which achieved higher market prices had the considerable benefit of a development consent – the Court has concluded that reasonable efforts were made by the Applicant’s agents to encourage the owners of 11 and 13 Pinnacle Street to sell their properties. Although there was some confusion as to the detail of who said what to whom and when, the Court concludes that offers close to or above the values set out in the Exhibit C and Exhibit 8 reports were made and were rejected. Therefore, the Court can conclude that the amalgamation of 11 and 13 Pinnacle Street with the Subject Site was not feasible as the properties were, in effect, not available for purchase.

142. In the context of the above detailed analysis of the proposed development and its consequences for the adjoining properties, it is necessary to return to cl 5.2 of Chapter 8 of the DCP to explain the Court’s conclusion:

If an application proposes a residential flat development that does not comply with the amalgamation plan, the applicant must demonstrate that development of an alternative amalgamation pattern can be achieved where all sites can achieve their full development potential (FSR 2:1).

A schematic design must show that development of land under an alternative amalgamation pattern complies with SEPP 65 and the Apartment Design Guide standards, and allows for building forms of varied height across the precinct, as shown in the Building Envelope Plan.

143. The Court is satisfied that the alternative amalgamation proposals canvassed by the Applicant have been shown to be feasible; the proposals demonstrate that the requisite controls can still be met and that the relevant sites can achieve the desired development for the R4 – High Density Residential zone. As explored earlier in this judgment, the Court is satisfied that with respect to the relevant properties not included in the Applicant’s Subject Site, both to the east and to the west, isolation will not in fact occur. Rather, schematic approaches have been considered, in “the broad”, which demonstrate that alternative amalgamations are feasible: with 7 Pinnacle Street amalgamating with 676 Kingsway to the east and with 11 and 13 Pinnacle Street amalgamating to the west.

144. Furthermore, with both the properties to the east and to the west there are further conceivable amalgamation options which, although strictly unnecessary, reinforce the necessary feasibility. The eastern properties of 7 Pinnacle Street and 676 Kingsway could potentially amalgamate with the social housing estate to their east and the western properties of 11-13 Pinnacle Street could potentially amalgamate with 15 and 17 Pinnacle Street to their west (with a development bridging over, or featuring the relocation of, the laneway now reclassified as operational land) and even 684 and 686 Kingsway.

145. Adopting the language used in the Principles set out in Karavellas v Sutherland Shire Council, which have well stood the test of time, all of the alternative amalgamated sites just canvassed are feasible. Furthermore, the orderly and economic use and development of these separate amalgamated sites can all be achieved, despite the inherent variances from the two amalgamation options for the Precinct in the DCP.

Other issues

146. Although the critical issue in these proceedings is clearly the issue of the potential isolation of properties proximate to the Subject Site, it is appropriate to address a number of other relevant issues concerning the proposed development.

147. First, although not an issue taken up by the Respondent Council in these proceedings, it is clear that a number of objectors took issue with the fact that the proposed development breaches the maximum permitted building height development standard under the LEP of 25 metres (the proposed development has a maximum height of 27.84 metres). In fact, given this breach of a principal development standard, the Court must not grant consent for the proposed development unless the Court has: considered the Applicant’s cl 4.6 variation request (the requirement in cl 4.6(3)) and is satisfied that, first, the cl 4.6 variation request adequately addresses the matters required to be demonstrated by cl 4.6(3) (the requirement in cl 4.6(4)(a)(i)) and, secondly, the development will be in the public interest because it is consistent with the objectives of the building height standard and the objectives for development within the R4 High Density Residential zone (the requirement in cl 4.6(4)(a)(ii)): see Randwick City Council v Micaul Holdings Pty Ltd [2016] NSWLEC 7.

148. The reason why the Respondent Council did not take issue with the non-compliance is because it accepted the conclusion of its development assessment officer in the assessment report to the Panel (Exhibit 4, p 159) that the Applicant had demonstrated – in its clause 4.6 variation request (Exhibit 4, p 179) – that:

… the non-compliant proposal is in the public interest and that there are sufficient planning grounds to justify varying this development. Compliance with the variation to the development standard for height is unreasonable and unnecessary in the context of the proposal, and achieves better outcomes for and from [the] development by allowing flexibility in particular circumstances.

149. In so concluding, the officer reasoned, inter alia, that “…the applicant has demonstrated that compliance with the standard is unreasonable and unnecessary … as the strict compliance would result in [the] loss of equitable access to the rooftop common open space”. It is to be noted that the height exceedance in question principally relates to just the lift shaft structure and so by no means constitutes a significant breach.

150. After having regard to the Applicant’s cl 4.6 variation request pursuant to cl 4.6(3), the Court is satisfied that, first, the cl 4.6 variation request adequately addresses the matters required to be demonstrated ((1) that compliance with the development standard is unreasonable and unnecessary and (2) that there are sufficient environmental planning grounds to justify contravening the development standard) and, secondly, the development will be in the public interest because it is consistent with the objectives of the building height standard and the objectives for development within the R4 High Density Residential zone.

151. With respect to the Applicant’s variation request adequately addressing matter (1), the Court is satisfied that the variation request does so by reasoning (Exhibit 4, pp 184-185 and 182-184) that compliance is unnecessary because the relevant objectives are met.

152. With respect to the Applicant’s variation request adequately addressing matter (2), the Court is satisfied that the variation request does so by reasoning (Exhibit 4, p 184) that the breach will be beneficial in environmental planning terms due to the resulting accessibility of communal open space.

153. Finally, the Court is satisfied that the non-compliance is consistent with the relevant objectives (and therefore in the public interest) because it, inter alia, facilitates greater access to communal open space without materially affecting neighbours. In support of this finding, the Court agrees with and adopts the relevant reasons set out at pp 159 and 160 of Exhibit 4, in so far as the officer explains why the development will be in the public interest. The Court also notes that no objector significantly detailed why the breach in and of itself (as compared to the acceptable height of 25 metres) was unacceptable.

154. Secondly, the Court is satisfied that the proposed floor to floor height, despite being less than 3.1 metres (the proposal is for a distance of 3 metres), is not unacceptable and will not result in the proposed development providing inadequate amenity for future occupants. Importantly, as noted in the assessment report to the Panel (Exhibit 4, p 148), the proposed development complies with the required minimum ceiling heights. It might be correct that, as claimed by Mr Reid, a floor to floor height of 3.1 metres is ideal in order to achieve a ceiling height of 2.7 metres. However, this does not deny that the ceiling height of 2.7 metres can be achieved from a floor to floor height of 3 metres.

155. Thirdly, despite the issue of potential traffic and parking congestion being raised by objectors and by the Respondent Council (at least initially), the Court is not satisfied that the proposed development is likely to give rise to any such unacceptable impacts. In assessing the available evidence, the proposed development does appear to provide sufficient car parking facilities for a residential flat building of its scale.

156. To be sure, residential flat buildings invariably increase the intensity of traffic and the proposed development will do so in the Precinct. However, the traffic impacts of the proposed development must be considered in the context that the Precinct has been selected as an appropriate area for residential flat buildings and, therefore, as an appropriate precinct to cope with the associated traffic issues created by such development. For example, the Precinct has been designed and is regulated so as not to permit vehicle access from the Kingsway. In short, there is an insufficient evidentiary basis to conclude that the proposed development will have unacceptable traffic impacts.

157. Fourthly, with respect to the issue of the proposed approach to garbage collection from the Subject Site which had initially been a matter of contention, with the final production of a revised approach, as set out in an exhibited letter from Ozzi Waste Management dated 19 July 2017 (Exhibit G), the issues were resolved to the satisfaction of the Respondent Council (Transcript, 20 July 2017, p 74, lines 36-44). The Court is also satisfied.

158. Fifthly, it is also important to note the numerous objections relating to the amenity (including solar access) issues concerning the various neighbouring properties to the Subject Site. As has been explained in some detail above with respect to the solar access impacts on 7 Pinnacle Street, the Court is satisfied that the proposed development will have adverse amenity impacts on the proximate extant neighbouring dwellings. Nevertheless, for the reasons articulated above, these adverse impacts are acceptable in the circumstances of the proposed development in light of how the locality is now zoned and regulated under SEPP 65, the LEP and the DCP.

159. If this development application had proposed a single, significant residential flat building in a precinct likely to remain as an overwhelmingly low density residential neighbourhood, such impacts may have warranted the refusal of development consent. However, this is not the fate of the Precinct. Regardless of the merits of the decision, the Precinct is undergoing a planned transformation towards high density development. In such circumstances, in the context of the strategic planning having set the future course for the Precinct, the amenity impacts of the proposed development are acceptable because, on balance, the development is in the public interest.

Conclusion

160. In conclusion, in the context that “the DCP controls [must] work in concert with SEPP 65 and SSLEP 2015 controls”, the Court is satisfied that the requirements for a residential flat building development as set out in, inter alia, SEPP 65 and the ADG can and will be met by the Applicant’s proposed development. Moreover, the proposed development does not offend the objective of the EPA Act to promote “the orderly and economic use and development of land” (s 5(a)(ii)) or the objectives of the R4 – High Density Residential zone.

161. For all of the above reasons, the Court has determined that it is appropriate to uphold the appeal and grant consent to development application No 16/1411 for: the demolition of existing structures; the consolidation of the site (being the land comprised in Strata Plan 30837, Lot 2 of Deposited Plan 23978 and Lot 1 of Deposited Plan 23978 – known as 678 Kingsway (9 Pinnacle Street), 680 Kingsway and 682 Kingsway, Miranda); and the construction of a residential flat building (consisting of 70 units over 8 storeys) and 2 basement car parking levels on the site.

162. With respect to the final form of the development consent subject to conditions, after carefully reviewing the agreed proposed conditions of consent provided by the parties, the Court had decided that a number of material changes ought to be made to the proposed conditions. Therefore, the Court will make an appropriate direction to allow the parties to implement the necessary changes and re-list the proceedings so that the formal orders upholding the appeal and granting development consent can be properly made.

163. The Court:

1. Directs the parties to provide to the Court, by 7 November 2017, revised agreed conditions of consent; and

Re-lists the proceedings for further hearing at 9.15am on 8 November 2017

Addendum made on 8 November 2017

164. The Court orders:

1. The appeal is upheld; and

2. Development consent is granted to development application No 16/1411 for: the demolition of existing structures; the consolidation of the site (being the land comprised in Strata Plan 30837, Lot 2 of Deposited Plan 23978 and Lot 1 of Deposited Plan 23978, known as 678 Kingsway (9 Pinnacle Street), 680 Kingsway and 682 Kingsway, Miranda); and the erection of a proposed residential flat building (consisting of 70 units over 8 storeys) and 2 basement car parking levels, on the conditions in Annexure A.

Annexure A - 94208 of 2017 (304 KB, pdf)

**********

Amendments

08 November 2017 - 8 November 2017 - Addendum made on 8 November 2017 - Final orders made

Decision last updated: 08 November 2017