Architectural Projects Pty Ltd v Manly Council - [2004] NSWLEC 311

No judgment structure available for this case.

Land and Environment Court

of New South Wales

CITATION: Architectural Projects Pty Ltd v Manly Council [2004] NSWLEC 311

PARTIES:
APPLICANT
Architectural Projects Pty Ltd
RESPONDENT
Manly Council

FILE NUMBER(S): 10179 of 2002

CORAM: Nott C - Tuor C.

KEY ISSUES: Development Application :- proposed demolition of the rear half of a large four-storey heritage item "Dungowan" on South Steyne at Manly - reconstruction and erection of an eight-storey tower at rear - poor structural condition of whole of building - tower in breach of various planning controls - applicant claims that the of sale of new units in the proposed tower is needed to finance the conservation of the front half of building - economic and heritage considerations

LEGISLATION CITED: Environmental Planning and Assessment Act 1979, s 97

CASES CITED: Morgan & Banks Properties Pty Ltd v Manly Council [2002] NSWLEC 251;
Hunters Hill Municipal Council v Villa Floridiana Pty Ltd (1990) 70 LGRA 62

DATES OF HEARING: 1 - 5 & 9 September 2003; 2-3 Februray 2004

DATE OF JUDGMENT: 07/21/2004

LEGAL REPRESENTATIVES:

APPLICANT
Mr B J Preston SC and
Ms K J Williams, barrister
SOLICITORS
Mallesons Stephen Jaques
RESPONDENT
Mr J A Cole, solicitor
SOLICITORS
Abbott Tout

JUDGMENT:

___________________________________________________________________

TABLE OF CONTENTS

MR GARRATT’S EVIDENCE
EVIDENCE FROM FINANCIERS
GENERALLY
ORDERS
Schedule A
_____________________________________________________________________

IN THE LAND AND

ENVIRONMENT COURT

OF NEW SOUTH WALES

10979 of 2002

Nott C and Tuor C

21 July 2004

Architectural Projects Pty Ltd
Applicant
v
Manly Council
Respondent

JUDGMENT

INTRODUCTION

1 . This an appeal against the refusal by Manly Council (the council) of a development application (162/02) for the partial demolition of a local heritage building known as Dungowan, and the construction of a residential flat building with basement carparking at 7 South Steyne, Manly. The proposal is referred to in more detail below (at par 13).

COUNCIL’S CONSIDERATION

2 . The development application was lodged with council on 29 April 2002 and was notified to adjoining residents and 23 objections were received. The application was referred to The Corso precinct committee and to council’s heritage committee, who raised concerns with the application. Council staff recommended approval of the application but council refused it on 4 November 2002. The appeal was lodged on 3 December 2002 and amended plans were lodged on 14 April 2003, which were re-notified to adjoining residents. Sixteen objections were received. The plans were further amended during the hearing; and the amended development application, for which consent is now sought, has been referred to by the parties as development option 3R.

ISSUES

4 . It was an important part of the applicant’s case that the proposed development was the only financially feasible alternative to conserve the building. This was disputed by the council.

EVIDENCE

6 . Mr M Garratt, chairman of the board of directors of Dungowan Manly Pty Ltd, presented evidence about the difficulties faced by the shareholders and the need to redevelop the property. Ms C Ashford of unit 20, Dungowan, gave evidence in support of the proposal.

8 . The following residents gave oral evidence objecting to the proposal: Ms E Maxwell, unit 23, Dungowan; Mr D Schaefer, unit 23, Dungowan; Mr L Holly, 36C Birchgrove Road, Manly Vale; Mr D Ellem, 14/51 Ashburner Street, Manly; Mr D McLaughlin, 45/507 Elizabeth Street, Surry Hills (owner with his wife of unit 4 in Dungowan); Ms J Peck, 4/7 South Steyne, Manly; Mr J Fox, 2/51 Ashburner, Manly (Secretary of Sandgate Body Corporate and of the precinct committee). As well, there were written objections from other residents.

9 . The main concern of the residents who objected related to the appearance of the proposed tower element, particularly its height. Residents of Sandgate were also concerned about the impact on sunlight, privacy and views.

10 . In the Schedule to this judgment we have listed the documentary evidence presented by both parties.

THE SITE AND PROPOSAL IN MORE DETAIL

11 . The site is located opposite the beachfront promenade at Manly, between Ashburner and Victoria Streets at the southern end of the beach. It is rectangular in shape with a frontage to South Steyne of 24.36 m and a depth of between 30.5 m and 34 m with a site area of 878.9 sq m.

12 . Dungowan is a four-storey company-title residential building owned by Dungowan Manly Pty Ltd with 22 units and parking for two cars. Dungowan was built in 1918. The building is currently in poor condition, primarily due to coke breeze used in the concrete of the roof and floor slabs and to water penetrating the solid non-cavity external walls.

13 . The proposal is to create 29 units (23 two-bedroom, 6 one-bedroom) and 18 parking spaces. The development involves:

14 . More details of the proposed development can be seen in the plans in exhibit A as amended by the plan exhibit AK, listed in the schedule to this judgment. The parties referred to this amended proposal, for which development consent is sought, as development option 3R. A separate development application has been lodged to strata-title the completed development.

SURROUNDING DEVELOPMENT

15 . Development adjoining Dungowan is the Radisson Kestrel Hotel to the north and the Sandgate apartments to the south. These are high-rise buildings: the Radisson has eight storeys (RL 31.32 m at the top parapet) stepping down on its northern side to four storeys above South Steyne; and the Sandgate is nine storeys high (RL 28.69 m at the parapet). To the rear of the site, across Dungowan Lane, is a five-storey building that is part of the Radisson Hotel. Other development to the west of the site is a mixture of mostly residential buildings predominantly three to four storeys in height.

16 . South Steyne has a wide promenade on its eastern side lined by Norfolk Island Pines, and runs from the southern end of the Manly Beach northward to The Corso. As mentioned, the Radisson on its northern side steps down to four storeys, and immediately to its north is a two-storey building on the corner of Victoria Street. Further beachfront development to the north along South Steyne up to The Corso all appears to be about the height of the existing parapet of Dungowan or lower.

17 . Taller buildings are evident elsewhere in the locality, and are shown in the photos in the reports of the expert town-planning, architectural and heritage consultants.

PLANNING FRAMEWORK

Past planning
18 . Scattered throughout the locality are many residential flat buildings that were erected when the planning controls were different or when there was little town planning apart from subdivision control and residential district proclamations. We do not know the circumstances relating to the approval of the adjoining Sandgate building.

19 . In December 1985 the council granted development consents for erection on Nos 9, 10 and 11 South Steyne of the eight-storey part of the northern tower of the adjoining building (now operated as the Radisson Kestrel Hotel), and in January 1987 a second consent was granted for the Radisson to extend onto 12 South Steyne. In order to encourage holiday accommodation, the council approved the Radisson to a greater height and with a larger floor space ratio (FSR) than would have been the case if the building was going to be used as a residential flat building. In February 1988 the council granted a third consent to allow the extension of the northern tower of the Radisson building onto the property at 13 South Steyne, but this extension was stepped down to a height of four storey above South Steyne. The history of planning controls from 1983 and the approvals relating to the Radisson are explained in Morgan & Banks Properties Pty Ltd v Manly Council [2002] NSWLEC 251. In that case, the Court refused development consent for substantial alterations to the northern tower of the Radisson to convert it to large luxury residential apartments. The Court’s reasons for refusal related to the social and economic effects for Manly of the loss of an international hotel, and the fact that a building of the height and FSR of the Radisson would not have been allowed for residential purposes at the time the original consents were granted.

Current planning

Manly Local Environmental

Plan 1998

The Council shall not grant consent to a development application made in pursuance of subclause (1) unless it had made an assessment of—

(a) the significance of the item as an item of the environmental heritage of the Manly Council area;

(b) the extent to which the carrying out of the development in accordance with the consent would affect the historic, scientific, cultural, social, archaeological, architectural, natural or scientific significance of the item and its site;

(c) whether the setting of the item, and in particular, whether any stylistic, horticultural or archaeological features of the setting should be retained; and

(d) whether the item constitutes a danger to the users or occupiers of that item or to the public.

The council shall not grant consent to a development application to carry out development in the vicinity of an item of the environmental heritage unless it has made an assessment of the effect which the carrying out of that development will have on the historic, scientific, cultural, social, archaeological, architectural, natural or aesthetic significance of the item of environmental heritage and its setting.

The council, when considering an application to erect a building on land upon which there is a building which is an item of environmental heritage, may at its discretion exclude from its calculation of the floor space of the buildings erected on the land the floor space of the item of environmental heritage—

(a) for the purposes of determining the floor space ratio; and

(b) for the purposes of determining the number of parking spaces to be provide on-site

but only if the council is satisfied that the conservation of the item depends upon the council granting consent in pursuance of this clause.

Manly Residential Development Control Plan for the Residential Zo

ne

(1)

Objectives

(2)

Performance Criteria

(3)

Diagrammatic Interpretation

24 . The requirements of the DCP that are relevant are: cl 3.1 Residential Density and Subdivision; cl 3.2 Open Space and Landscaping; cl 3.3 Floor Space Ratio; cl 3.4 Building Height; cl 3.5 Setbacks; and cl 3.7 Overshadowing.

25 . State Environmental Planning Policy No 65—Design Quality of Residential Development (SEPP 65) also applies to the site. Under SEPP 65 the Residential Flat Design Code (Flat Code) must be considered.

26 . Sydney Regional Environmental Plan No 23—Sydney and Middle Harbours also applies to the site. Clause 18(a) requires that the appearance of the development from the waterway and the foreshores must be considered.

DEGREE OF NON-COMPLIANCE WITH THE PLANNING CONTROLS

27 . The key difference between the parties was the applicant’s contention that while the proposal departs from the controls it is acceptable on merits having regard to the features of the site, the surrounding buildings and the design of the development; whereas the council considered that the proposal did not achieve the objectives of the DCP requirements or the overall objective of the planning controls.

28 . The site is within the density sub-zone 1 which specifies a density control of one dwelling per 50 sq m of site area and a maximum floor space ratio (FSR) of 1.5:1. The height control permits a maximum wall height of 12 m (and an extra 1 m for a parapet) and an overall height of 15 m up to the top of the roof, which may contain rooms. The setback controls require the front setback to relate to corresponding setbacks of adjoining properties or, where there is no consistent setback, to be a minimum of 6 m; a rear setback of 8 m; and side setbacks that increase as the wall height increases. The landscape control requires 45% of the site area.

29 . The existing building already does not comply with these controls. It has a density of one unit per 39.95 sq m, an FSR of 2.87:1 and a wall and parapet height of about 15.5 m (RL 19.3 m). The building covers most of the site, with a front setback of 0 m–3.4 m, a rear setback of 2.7 m (although some single-storey structures extend to the rear boundary), a setback to the north of 1.4 m and a setback to the south of 2.72 m–3.315 m (except the south-east corner). The landscaped area of the site is 14.4%.

30 . The proposal will further exceed these controls. The proposed height is about 27 m (RL31.32 m). The density is one unit per 30.3 sq m. The footprint of the existing building will generally be maintained, except for a single storey extension into the southern setback area for part of its length with a reduction in landscape area to 10%.

31 . The FSR of the proposal is between 3.97:1 and 4.45:1, depending upon the definition of FSR adopted and the method of calculation used. We accept the DCP definition as being appropriate, as the FSR control of 1.5:1 is within this document. Under the DCP, the FSR of the proposal is 4.14:1 (which excludes balconies). This includes 1.51:1 (1,324.45 sq m) of the retained front half of the building, and 2.63:1 (2,315.59 sq m) of new construction (including the existing building to be reconstructed and the additional storeys).

32 . Under cl 25(2) of the LEP, the floor space of the heritage item can be excluded from the floor space calculation but only if the conservation of the item depends upon this. Mr Preston’s submission, on behalf of the applicant, was that this clause applied to the proposal and that the floor space of the whole of the Dungowan, including the floor space of the rear section to be demolished and rebuilt, but not the addition, may be excluded from the FSR calculations of the building. If excluded, the proposal would generally comply with the FSR control.

33 . We do not accept that the floor space of the existing building to be rebuilt should be deducted from the floor space calculation. This part of the building would be entirely new construction with columns and beams supporting an additional four storeys, although the external appearance of the rebuilt lower four storeys would be generally the same as the original building if carefully executed. However, the rebuilt rear half would form the base for the additional storeys, and the overall scale, form and height of the original building would not be retained. The rebuilding of the rear half of the building, of itself, would do little to contribute to the conservation of the front of the building or to retain its significance.

34 . We have also considered whether the proposed FSR should be allowed (even though it further exceeds the 1.5:1 requirement than the existing building) having regard to the objectives of the DCP and are of the opinion not to allow it, because of the bulk of the proposed addition.

35 . Mr Grech was concerned that the FSR, combined with the lack of setbacks of the addition from the existing sidewalls of the building and from Dungowan Lane, would result in an unacceptable building bulk. In his opinion, the eight storeys built close to the rear boundary would have a negative impact on Dungowan Lane and when viewed from Ashburner Street. Mr Grech was also concerned that extending part of the ground-floor level to its southern boundary would remove an existing view corridor and the opportunity to provide a landscaped strip between Dungowan and Sandgate. Although this strip would not be significant in size, in his opinion it would soften the development. Mr Chambers did not have concerns about the bulk of the building or its setbacks, which he found to be acceptable in the context of the adjoining buildings and because of the setbacks of the existing heritage building.

height

a) To control the height of buildings by specifying maximum wall and roof/ridge heights.

b) To provide for building heights that are consistent with the locality.

c) To minimise disruption to views, loss of privacy and loss of sunlight to existing residential development.

d) To provide sunlight access to private open spaces within the development site and maintain adequate sunlight access to private open spaces and windows of living spaces of adjacent dwellings.

consistent with the locality

Having regard to the setting of Dungowan, the development is consistent with the objectives of DCP height requirements, notwithstanding its non-compliance with the requirements. The height of the development will not result in any unacceptable view loss, loss of privacy or shadowing for existing surrounding residences. The imposition of DCP height control would be unreasonable and departure from this control is justified.

38 . We do not accept Mr Preston’s submission that it meets objectives (b) and (c).The extra floors do result in greater impacts on views and sunlight than a complying building. While the proposed building is consistent with the two adjoining buildings and a few other buildings in the locality, it is not consistent with the predominant height of buildings in the locality.

39 . The proposal does not comply with the planning controls, particularly FSR and height. The non-compliances are sought to be justified based on the proposal responding to the context of the two adjoining buildings and the only feasible option to conserve the item. As discussed further below, the proposal involves major intervention and it is not a good heritage solution. From the evidence we do not conclude that development option 3R is the only feasible option or that other options have been examined to the extent that this conclusion can be drawn. We therefore do not accept that there is sufficient justification to vary the planning controls to the extent proposed. The adjoining buildings provide an immediate context for the proposal and while there are other taller buildings, the locality is not characterised by these building but by buildings of similar or lower scale to the current form of Dungowan.

40 . Dungowan already exceeds the current planning controls for the area and there is no loss of development potential by retaining the existing building. This is different from the examples provided by Ms Hill, where heritage items have had major additions. These examples, where additional floors are added to the item, are in a city context where the planning controls would provide greater development potential and height than that applying to the existing heritage building (eg GPO Martin Place, Civic Hotel, Former AMWU Building, Ritz Carlton Hotel, Hyde Park Tower, Sydney). Alternatively, the additions are to the side and of a similar height and scale to the existing item (eg. North Sydney pool and Woollahra Council Chambers). The examples are not comparable to the current situation where the item exceeds the controls, and therefore there is no loss of development potential if the existing building is retained; the controls are an incentive to retain the existing building.

HERITAGE

CMP

The building has high significance in the development of Manly as a prestige residential building and the scene of significant social events. Manly, at that time was Sydney’s premier seaside resort.

The building has median significance for its association with the Dungowan Cabaret located on the adjoining site and demolished in the 1960s.

The building has medium significance as a fine although altered example of an interwar free classical style flat buildings designed by Ross & Rowe. The ground floor interiors present a sophisticated sequence of spaces.

The building has high significance as a rare prestige residential building in the local area and the scene of significant social events in Manly, Sydney’s premier seaside resort.

The building has high potential to be restored.

The building should continue to be used as a residential apartment. The overall form of the building particular as viewed from South Steyne should be retained and conserved. Finishes never intended for painting such as sandstone should remain unpainted and should continue to be appropriately maintained. Surfaces intended for painting should continue to be painted in appropriate colours. Detracting elements should be removed. Original details should be reconstructed. Where it is necessary to remove fabric it should be retained for reuse.

The original building is a significant feature within a highly varied and higher streetscape. Any future development should preserve the existing form, external surfaces and materials of the primary facades. The addition of further floors should not impact on the form of Dungowan as understood from South Steyne. Additional floors should be set back to read visually distinctive.

45 . The owner rejected development options 1, 2 and 4 for their inability to generate funding. Options 4 and 5 were rejected for their inability to satisfy heritage constraints. Development option 3 was considered acceptable on the basis that it retained the significant front part of the building and could generate funding for conservation works. This development option 3 became the development application that is the subject of this appeal and is shown in the plans exhibit A. During the hearing an amended plan was tendered, C-DA15B (ex AK), which provided for the replacement of the floors in the front half of the building instead of repairing them, and the quantity surveyor called this amended application, development option 3R . For consistency, we have adopted the same names for the options (see the table costed options at par 111).

46 . Professor Mackay and Mr Patch generally agreed with the statement of significance and conservation policy and that full repair of the existing fabric of Dungowan would provide the best heritage outcome , if feasible . The main difference between the experts was whether this option could be achieved. In Mr Patch’s opinion adequate investigation had not been undertaken to determine the structural condition of the building and options for development had not been fully explored and therefore the proposal was not justified. He also considered that demolition of the whole of the rear half of the building did not leave any original fabric (at the rear) into which new material could be introduced, and so would not fall with the definition of reconstruction under the Burra Charter. In his opinion, conservation of the building was not being achieved. He was particularly concerned about the demolition of the rear of the building and its reconstruction with an extra four floors. He considered that the extent of removal of the floors in the front of the building, whether this would also necessitate the removal of walls and the degree to which original fabric would be replaced, to be uncertain. In his opinion, the extra floors and their modern expression changed the form of the building and thereby affected its significance.

47 . Professor Mackay held the contrary opinion that retention of the building was not possible with available resources. He stated that the Burra Charter identified a range of processes that constitute conservation and that the proposal was “conservation”. In his opinion, “the proposal involves major change but retains most (but not all) of the heritage value of the place . ” The degree of intervention was a reasonable response, he said, to the constraints of the building and was an appropriate, if not ideal, heritage outcome. He recognised that the proposal would have both positive and negative heritage impacts on Dungowan. The negative effects are the loss of original fabric and the alteration to the form of the building by the additional floors at the rear. However, he accepted that the new form of the building was appropriate in the context of other buildings and due to its setback of 10 m from the front of Dungowan it would appear as a separate building. He concluded that “this is the best available conservation, given the particular circumstances of building: cost of works/asset values before and after works/available financial resources” (ex 14).

48 . The South Steyne façade of the building is to be conserved with original features such as balconies, cornices, and corners towers reinstated; and elements that detract from the significance of the item are to be removed. The experts agreed that this work should be based on the “Rose Postcard” image, which illustrates the appearance of the building pre-1924. They disagreed on whether it was necessary to reinstate the ground-floor restaurant windows. Professor Mackay considered that these had been removed when the restaurant ceased operation in the 1930s and their reinstatement was not appropriate to the proposed residential use. If it were appropriate to grant consent, we would accept Professor Mackay’s opinion on this point.

49 . Ms Hill’s opinion was that the proposal conserves the most significant sections of the building being the front façade, the vestibule and foyer on the ground floor, and the units in the front section (with the defective concrete floors replaced). The proposal results from investigation of the condition of the building and options for conservation and redevelopment. She was of the opinion that the development would result in an overall positive conservation outcome.

50 . The experts agreed that there was no physical impact on other heritage items near the proposal. In Professor Mackay’s opinion the proposal would not impact on the setting of either Dungowan or of the other heritage items as it would appear as a new building set behind Dungowan when viewed from the beach and other vantage points. In Mr Patch’s opinion there would be adverse impacts arising from the change in form of the building itself, especially when viewed from Ashburner Street, South Steyne and the beach promenade.

51 . The heritage experts for both parties preferred retention of the form of the building and a greater degree of heritage fabric, if feasible. The proposal involves the demolition of the rear half of the building and the erection of a new building with additional floors, the removal of the floors in the front of the building and the retention of walls in-situ, if possible. The walls may have to be removed and rebuilt. All fabric such as architraves, doors and tiles would be removed, stored and replaced, if feasible. The façade to South Steyne would be reinstated. The proposal represents major intervention that will affect the significance of the building.

52 . The question before the Court is: Does the proposal have an acceptable impact on the significance of the item? This question is linked to the structural condition of the building, the cost of repair, investigation of other options, the planning controls and valuation evidence, detailed below. We find that the answer to this question is no. Although the evidence of Ms Hill and Professor Mackay is that the proposal is conservation and is reasonable given the constraints, the Court is of the opinion that the proposal would not be a good example of heritage conservation.

53. It is clear that the structural condition of the building is poor and requires action. If nothing is done, the building will deteriorate and will eventually require demolition. The applicant’s case is premised on the proposal being the only feasible option to conserve the building and that other options have been thoroughly investigated. While Ms Hill states that the other options to extend the building were examined, there is no detailed evidence before the Court as to the feasibility of these options. The options before the Court all involve the addition of four storeys or the retention of the existing building. We do not accept that the option of retaining the building and adding only one storey has been examined to the extent that it can be dismissed. Mr Mitchell indicated that this was technically feasible and Mr Patch supported such an approach. Such an option would exceed the planning controls but not to the extent of the proposal and could have less impact on the item and the streetscape, while providing some funds for the repair work.

54. The option before the Court proposes the sale of new units in the additional storeys and new carparking spaces to fund the cost of conservation works. To provide the additional storeys and carparking, the rear of the building is demolished which provides a clear site to undertake excavation and new construction to support the additional storeys. This option would allow the existing unit-holders to realise a profit if their units are sold (item 10 of the Table of Deficit or Profit, par 139 below). The front of the building is retained; and original details of its primary facade to South Steyne are reconstructed, which are positive features of the development. The quantity surveyors’ costings for these features would appear to be less than $250,000. The extent of demolition and changes to the building are so significant that the conservation value of the project is questioned, particularly when this is balanced against the objectives of the planning controls and that other options have not been investigated.

55 . We find that the in considering cl 18(2) of LEP1988, the proposal does not have an acceptable impact on the heritage significance of the item.

IMPACT ON STREETSCAPE AND THE SURROUNDING AREA

56 . The key difference between the parties was whether the increase in height was appropriate. Mr Chambers, Professor Webber and Dr Lamb considered that the two adjoining buildings provided the immediate context for the proposal. These buildings are higher than the existing building of Dungowan and the proposal would fill in the gap between these buildings. The height of the proposal is the same as the height of the parapet of the Radisson Hotel and greater than the Sandgate apartment building. The proposal is set back to align with the facade of the tallest part of the Radisson Hotel and behind the eastern facade of Sandgate. In their opinion, the proposal was an appropriate infill development between these two buildings and it would not form a wall of buildings because of the setback, variation in surfaces and the remaining gap between the proposal and the Sandgate. Mr Chambers considered that the proposal would be acceptable even if it did not conserve a heritage building.

57 . Mr Chambers, Professor Webber and Dr Lamb stated that the proposal would have a positive impact on the streetscape of South Steyne by improving the appearance of facade of Dungowan and it would not have an adverse impact on the character of the area. Due to its setback, the additional storeys would not generally be visible from South Steyne. From other parts of the promenade and more distant views, the addition would be seen behind the screen of Norfolk Pines. They considered that the proposal was acceptable when viewed from the West and along Dungowan Lane.

58 . Dr Lamb identified the visual catchment area for the development and assessed the overall visual impact of the development as moderate. He reached his conclusion on the basis that when viewed from the east the addition would appear as a separate building and from the beach it would be screened by the Norfolk Pines. From the walkway between Manly Beach and Shelley Beach, the addition blends in with the surrounding buildings. From the north-east and south-east, he said that the addition would be appear as part of Dungowan, but due to the setback its impact would be visible from only limited vantage points.

59 . Mr Grech held the contrary view that the proposal did not achieve the urban design objectives, which council’s controls aimed to achieve. In Mr Grech’s opinion the intent of the planning controls is to provide a lower scale backdrop to the beach and the pine trees so that the natural form dominates the built form. He considered the height control to be important in achieving this objective. The height of the addition would fill in the gap between the Radisson and the Sandgate and create a wall of development. This gap between the buildings provides sky exposure and the buildings appear as separate elements. This reduces their bulk and overall impact.

60 . While there is an urban design argument that supports the increase in height and the infilling of the gap, we accept Mr Grech’s opinion that this is not what the planning controls seek to achieve. The argument that it is acceptable in this situation is premised on the need to conserve the heritage building. But the need to conserve the building in this manner should not override the planning controls. If the existing building was to be demolished and a new building constructed on the site, it would also not be appropriate under the current DCP to fill in the gap with a building of the height proposed.

61 . We accept that the gap, the sky exposure and the silhouette of the Norfolk Pines reduce the impact of the built form along the beach. The photograph in Dr Lamb’s statement of evidence (p 37 ex J) illustrates this. There are examples of larger buildings but generally the scale of development is around three to four storeys and the Norfolk Pines are the dominant and unifying element along South Steyne. The argument that where there is a higher building, development can be increased in height to form a transition could be used in other locations along the beach where there is a higher building adjoining a lower one, in order to increase the latter’s height above the DCP requirements. This would not achieve the lower scale buildings envisaged by the height requirements.

IMPACT ON ADJOINING RESIDENTS

62 . The impact the development on the privacy, sunlight and views of Sandgate was raised by Mr L Holly, a former resident. Dr Lamb examined the impact of the proposed development on views to surrounding properties and concluded that these would not be adversely affected. There would be some loss of views from the upper four level of the Sandgate, which would principally be from the rear windows on the northern side of Sandgate towards the northeast; however, Dr Lamb did not consider this significant as the main views are to the east and the Ocean and views to the northeast from other windows are retained. Mr Grech acknowledged that the proposal does not result in significant view loss and is not a reason to refuse the application, although he noted that a complying development would not result in view loss.

63 . In relation to overshadowing, Mr Grech raised concerns that the proposal would result in increased overshadowing of properties to the west across Dungowan Lane, which already receive considerable overshadowing in midwinter. The Radisson hotel apartments would lose some morning and late afternoon sunlight. The west-facing apartments of the top four floors of the Sandgate building would lose sunlight in the afternoon (ex B). Mr Grech considered these impacts unacceptable, as they were caused by non-compliance with the planning controls.

64 . Mr Chambers held the contrary view that the effect of additional shadows would be minimal in the context of the shadows already caste by existing buildings, including the Radisson Hotel and Sandgate. The shadows over the Radisson are over a hotel use, not long-term residential and the hotel has not objected to the proposal. The Sandgate apartments are orientated towards the east and would still receive sun even if the rear units are affected.

65 . In relation to privacy, Mr Grech’s main concern was overlooking of the Radisson Hotel apartments, particularly overlooking of the swimming pool from the proposed first floor terraces. Mr Chambers’ opinion was that these apartments are already overlooked by the Radisson Hotel, Sandgate and Dungowan, and that a hotel use does not require the same level of privacy as a long-term residential use.

66 . While the proposed additional levels will impact on the amenity of Sandgate and Radisson Hotel, of itself this impact would not warrant refusal of the application but is a factor to consider in whether the proposal meets the objectives of the planning controls despite non-compliance with the numerical controls.

SUPPLEMENTARY POINTS ON THE APPEARANCE OF THE PROPOSED DEVELOPMENT

67 . Plan C-DA11A (pt ex A) shows the beachfront elevation of the proposed development:

Front elevation

68 . The main roof over the proposed addition has a height of RL 31.32, which is the same as the main roof of the Radisson to the north. However, the roof over the balconies in the proposed tower is a little higher at RL 31.7. Comparing the proposed development with the Sandgate, the main roof of the Sandgate at RL 28.69 is clearly lower than the proposal. The lift overruns in the Radisson and the Sandgate adjoining buildings are contained in structures that are higher, but it would be inappropriate to use these smaller structures as a reference point.

69 . The model (ex S) is to scale and appears to accurately depict the proposed development and the immediately adjoining buildings.

70 . Although the proposed addition is set back from the reconstructed front façade, the bulk of the modern addition would dominate the front half of the building that both parties say has heritage significance. The bulk would be apparent as one walks from the surf club or from Marine Parade along the promenade, as seen in photomontage 2 (“Proposal”) and photo 7 (“Now”) of exhibit 8. According to C3D Imaging Pty Ltd (ex 8), these photos show what a person would see who is standing approximately 5 m north of the club and 9 m from the eastern kerb of South Steyne:

View from near the lifesaving club

71 . The bulk and height of the proposed addition would be more noticeable as a person moved towards the beach wall of the promenade. The promenade opposite the subject site is 26 m wide from the kerb of South Steyne to the beach wall. The cross-section plan C-DA15B (ex AK) shows the sight line of a person (with an eye-height of 1.6 m) standing on the promenade near the beach wall. Two and a half storeys of the proposed addition would be seen rising above the front half of Dungowan:

72 . The cross-section plan might give the impression that pine trees would prevent a view towards the tower. However, in the vicinity of where the cross section was drawn, the Norfolk Pines are spaced apart, and from the promenade and from the beach and from other places a view is clearly seen towards Dungowan and to the sky above the existing building where it is proposed to have the addition. Depending on the angle of view, the Norfolk Pines (which are heritage items) would be seen rising above Dungowan in its present form and having sky behind, which would not be the case if the proposed development were approved. See plates 3, 9 and 13 in Dr Lamb’s report (ex J).

73 . There are other places, including most of the beach directly in front of Dungowan where at least two and a half storeys of the proposed addition would be seen above the reconstructed front part of the building. The proposed addition would not necessarily appear as a separate building but as an addition on top of the rear section of Dungowan, although having a setback from the front facade of the existing building.

74 . Although it is of lesser importance, the proposed addition would also appear bulky as viewed in Dungowan Lane or as one looked up Dungowan Lane while walking east in Ashburner Street. The bulk would be apparent because of the height of the proposed addition, having less setback from the lane than the Sandgate building (on the right of the photo). The five-storey southern tower of the Radisson (on the left) has a lower height, about the same as the existing parapet of Dungowan. South Steyne and Ashburner Street are part of a heritage walk shown in the printed version of the council’s website, pt ex 2.) The following photo and montage (pt ex 7) show the view at the rear:

View from walkway of Marine Parade

76 . In this vista the lower buildings, extending northward from the stepped-down four-storey part of the Radisson, provide a better backdrop for the Norfolk Island Pines, which themselves are heritage items.

77 . Viewed from Marine Parade, the proposal would create an undesirable walled-in effect in conjunction with the adjoining eight-storey part of the Radisson building. Almost three and a half storeys of the addition would be seen on top of the rear lower four storeys. The photomontage appearing after the front page of the Statement of Environmental Effects of G B Wilson Pty Ltd (tab 5 ex Q) best shows the likely appearance of the proposal; whereas montage 1 of ex 8 seems to be slightly in error, because it sets the main roof of the proposal lower than the main parapet of the Radisson, but it nevertheless shows the wall-in effect.

PROBLEMS WITH THE EXISTING BUILDING, CAUSES AND POSSIBLE REMEDIES

Site inspection by the commissioners

78 . On our inspection of the subject building, we were taken into units 3, 6, 10, 12, 16, 17, 20, 21 and 22. We also saw other parts of the building, such as roof area, the lift well, corridors, and the external walls of the building.

Existing layout of the units

79 . We show in schematic form the approximate layout and location of the existing units in the Dungowan (the eastern or right-hand side of the diagram is the front of the building, facing the beach):

80 . The ground floor, which apparently was originally used as a restaurant and did not have residential accommodation until the 1930s, now has two units at the front, units 20 and 21, one on each side of the central entry, vestibule and foyer. Above the foyer is a light shaft. A staircase in the central part of the building serves the three upper floors. Near the staircase in the rear half of the building, there is a lift, which has not been operational for at least three years, and it is common ground that the lift the needs replacing. Also contained within the rear half of the building on the ground floor are units 22 and 23 and a double garage. There are six units on each of the three other floors. There is no unit numbered 13. Units 14 and 15 on the third floor have been combined for use as one apartment; however the valuers who gave evidence valued the apartment as two separate units, and in the proposed development the apartment is numbered as two separate units, units 14 and 15; we have likewise treated the apartment as being two units, units 14 and 15. There are thus a total of 22 units in the existing building, numbered 1 to 12 and 14 to 23. (In the proposed development, the existing unit 22 on the ground floor at the rear would be deleted to provide for parking and access to a new basement carpark, and the proposed development would have a total of 29 units, numbered 1 to 12, 14 to 21, and 23 to 31.)

Ms Ashford’s unit 20

I write in order to give you my account of structural problems that I have encountered living in Dungowan.

I have been a shareholder of Dungowan Manly Pty Ltd for approximately 7 years.

During this time I have resided in Unit 20 and have had to carry out many repairs and renovations to my unit.

Some problems are recurrent, apparently due to the poor structural condition of the building:

- Continuing water penetration into the northern and front walls.

- Rising of floor tiles in the rear area of my apartment due to disintegration of underlying concrete slab.

- The air vent and surrounding masonry in the front bedroom fell out at 4:00 am one morning.

- The concrete ceiling in the front sun room recently collapsed over an area of two or more square meters at 1.00 am with large concrete and metal pieces falling onto the furniture, fittings and floor below it, which led to further cracking and deterioration.

- The concrete ceiling in the front bedroom has a number of continuous cracks extending the full width of the room and forms a discontinuous and uneven surface.

- Finally, the northern wall of the kitchen is continuously disintegrating leaving masonry debris on and in adjacent cupboards.

I trust this is of assistance.

82 . Problems needing rectification are evident in various places throughout the whole building. Of particular concern is the unsatisfactory condition of the roof and floor slabs, and water penetration through the solid, non-cavity brick external walls. The problems will be referred to in more detailed below.

History of problems

83 . The problems are not of recent origin. We have considered a large volume of minutes of meetings of the board of Dungowan and correspondence (ex AG) produced by the current chairman, Mr Garratt. We have also taken into account over 20 reports and letters by engineers, architects and other specialists who have considered at different times problems relating to the building (see particularly ex D and ex 4), as well as the evidence of the experts retained to give evidence in the present appeal.

Explanation in 1989 of the problems in the roof and floor slabs

DUNGOWAN - 7 SOUTH STEYNE - MANLY
BUILDING REPAIRS AND MAINTENANCE

Further to our previous reports, in particular that of 16 October 1989, we are now able to advise on the results of the testing of the structural concrete in the roof slab.

In accordance with our directions a series of six cores were drilled out of the roof slab by Bemac Laboratories Pty Ltd, and tested to determine several criteria identified as critical to the durability and long-term performance of the reinforced concrete slab.

We enclose a copy of the test report from Bemac Laboratories Pty Ltd setting out the details of the analysis of the cores taken and measurements of the location and condition of the reinforcement. In order that the information can be easily assimilated by shareholders we comment on the results and advise of our further recommendations in the light of the data.

Testing objectives

Concrete is a composite material made up generally of sand, aggregate, and cement. Water is used in the mix of these materials to cause the cement to hydrate whereby it “sets” and binds the sand and aggregate particles into a homogeneous mass. An important characteristic of concrete in structures is its ability to maintain a protective environment around steel reinforcing. This environment depends upon a number of features including the density of the concrete, the amount of cement in the mix and the absence of or preclusion of certain chemical contaminants. Over a period of time certain chemical changes occur in concrete which can alter the environment, lessening the degree of protection to steel. The three changes of concern in the case of Dungowan are the following:

Composition and nature of the coarse aggregate

Intrusion of chlorides

Intrusion of carbonation

The first factor, the nature and composition of the coarse aggregate, is already established to be “hostile” to the reinforcement as one of the materials used as a coarse aggregate was coke breeze, a by product of boiler and furnace fuels commonly used in the early part of the century to reduce weight in the concrete. Unfortunately the material is aggressive and defeats the protection to steel provided by the alkalinity of cement (the “passive” ingredient in the cement) and over time this breakdown in the protection leads to the development of corrosion of reinforcement.

The second factor, chloride contamination, has a similar effect as the breeze aggregate but can cause deterioration of the reinforcement in a much shorter time.

The third factor, carbonation of the concrete, is a time related chemical change which occurs in all concrete but in good quality dense concrete tends to taper off with depth and for practical purposes has little long term effect. In low quality or low density concrete the rate and depth of intrusion of the carbonation can extend beyond the layers of reinforcement and thereby cause the chemical environment to change and permit corrosion to develop.

The testing of the cores taken shows that the depths of carbonation of the concrete are generally around or beyond the reinforcement. The chloride levels are generally within acceptable limits (one result above the maximum allowable) and appear to not be of particular concern at this time.

Examination of the reinforcement embedded in the concrete cores shows differing rates of corrosion of the bars, with absorption of the corrosion product into the texture of the lightweight concrete. This accounts for the absence of widespread cracking of ceilings (other than plaster cracks) which is usually the first indicator of structural corrosion.

No cores were taken from floors within flats and as can be seen from the test report it is likely that similar processes of corrosion are occurring within floor slabs, undetected due to the absence of structural cracking.

It has been obvious for some time that corrosion damage is occurring in the floor slabs forming the bathrooms and the verandahs (some now closed in) and we have in our previous reports included for cutting out those sections of slab and reconstructing in new reinforced concrete. Our present proposal dealing with the roof and the bathroom and verandah slabs is for the following works to be implemented as soon as possible:

1. Stripping off the timber faslework [sic] on the roof and the casting of a new structural concrete slab over the existing roof slab, anchoring it in to the slab so that the two slabs act as one. This will ensure the existing slab is supported notwithstanding the failure of the reinforcement.

2. Cutting out pockets along the edge of the roof slab to allow the new slab to be socketed onto the load bearing walls below.

3. Provision of a new sheet membrane over the new slab, and provision of appropriate rainwater heads to discharge into the downpipes.

4. Cutting out and reconstructing the floor slabs to the bathrooms and verandahs, including replacing and making good the internal fittings and finishes.

In view of the seriousness of the results of the tests on the roof slab it is now imperative that similar tests be carried out to the floor slabs within flats at each floor. The works proposed to the roof and bathrooms etc should however proceed independently in view of the damage and implications already evident.

The other works which we have previously recommended include the replacement of corroding window arch bars, stripping off of the external wall coatings and application of a suitable water-shedding coating, and rationalisation and replacement of external services pipes. Other internal repairs and improvements had been assigned second level priority. Those recommendations remain effective. In summary the situation is now as follows:

1. The roof slab is structurally defective and must be supported or replaced before tackling any waterproofing works on the roof or contiguous to the roof.

2. The bathroom and verandah slabs must be cut out and replaced due to the advanced state of reinforcement corrosion and spalling now evident.

3. Further testing of floor slabs within the building must be carried out as a matter of priority (but not in lieu of immediate action on 1 and 2 above)

4. Window arch bars and external waterproofing should be included with the works associated with 1 and 2—it is more economic and practicable to carry out this work while access equipment is already on site and while damage to the roof can be prevented or accommodated in the roof programme.…

In addition and as a matter of high priority we recommend the Directors authorise further tests to be carried out on floor slabs within the building, recommended to be two cores drilled from each floor in locations selected to cause the least inconvenience to occupiers.…

85 . The opinion expressed by Mr Moody about the likelihood of similar problems being present in the floor slabs within the building has been shown by subsequent reports and events to be well founded. As mentioned by Mr Moody, the slabs contain coke breeze aggregate, which has allowed carbonation and loss of alkalinity in the concrete to occur. Carbonation, together with water penetration, can cause corrosion of the bar reinforcement. The evidence indicates that external walls of the building are solid brick and allow water to penetrate to the slabs. The service pipes are not in good condition. Water has also penetrated the floor slabs of most of the bathroom and kitchen areas and affected all the verandas.

86 . A clear picture does not emerge from the minutes of meetings of Dungowan Manly Pty Ltd (ex AG) as to the full extent and nature and of repairs that were undertaken over the years, although a helpful summary of some of the past meetings is provided in the statement of Mr M Garratt, who has been chairman of the board of directors since May 2000. Certain units, having had some repair work done to them, are noted in the minutes as needing further repairs years later. Among the repairs, it appears that work was done to (parts of) the ceilings or roof slabs over units 16 and 17 on the top floor. A new roof slab has not been cast over the old one; instead, about 10 years ago the existing concrete slab was covered with cliplock metal cladding supported on a steel frame. In the proposed development and in any of the development options or remedial options that are considered later in this judgment, the existing roof (including the old concrete slab) would be demolished and a new concrete slab built.

87 . On 6 October 2000 the board of directors of Dungowan Manly Pty Ltd, under the new chairmanship of Mr R Garratt, authorised the commissioning of reports from two independent engineering companies (Bonacci Rickard (NSW) Pty Ltd and Close Consultants Pty Ltd) to do preliminary structural surveys of the building.

Report by Bonacci Rickard (NSW) Pty Ltd—repairs recommended

In the last 16 years we have never yet found it necessary to demolish. Five (5) years ago an engineer wanted to demolish 24 Sandridge Street, Bondi. We disagreed and worked with the Owners Corporation to devise a staged approach to the repairs. We managed to repair all damage for around $700,000 and the owners now have a structurally certified modernised building and are very pleased with the result. The increased value of the apartments will recover the cost of the repairs in a short period, hence a worthy investment

89 . The Bonacci Rickard report mentions that part of the proposal was “Add extra storey” but no details of this were given in the report.

Reports of Close Consultants Pty Ltd and Savcor Pty Ltd

90 . Mr B Close of Close Consultants Pty Ltd prepared a preliminary report dated November 2000 (pt ex D). It is not necessary to refer to this report in the light of more detailed reports (referred to below) other than to note that Mr Close suggested various options ranging from “A. Minimal on-call maintenance” to “D. Demolition and reconstruction… This option could provide parking in the building.” In relation to the option of total demolition, Mr Close’s comments included: “Option D is radical, however not unreasonable.”

91 . In order more fully to advise Mr Garratt and the board of Dungowan, Mr Close engaged Savcor Pty Ltd to carry out various tests. Savcor inspected the whole of the accessible areas of the building and carried out detailed testing in the lower front facade, selected locations of the hallways, and units 6 and 18. The tests included measuring the depth of cover to reinforcement, delamination testing, carbonation analysis, and analysis of dust samples for sulphate, chloride and cement content. We have no reason not to accept the technical details of those tests, although we do not reproduced them in this judgment.

92 . We note that Savcor’s electrical continuity tests indicated that, in respect of the areas tested, the reinforcement was generally discontinuous and would be inadequate for an electrochemical techniques such as cathodic protection; “however, for a electrochemical techniques such as re-alkalisation or desalination, continuity may be sufficient. This assumption needs to be confirmed.”

4.0 CONCLUSIONS
Based on the test results the following conclusions can be made:
· The investigation found extensive cracking, delamination and spalling of the concrete.
· Concrete spalling was found concentrated near the junctions between the walls and slabs, and in general areas of low concrete cover.
· The low concrete cover to reinforcement has contributed to existing defects.
· The continuity of reinforcement was found inadequate for the application of electrochemical repair methods such as cathodic protection; however for electrochemical repair methods such as desalination or re-alkalisation continuity may be adequate subject to further testing.
· The major cause of deterioration for the internal elements of the building, especially the slabs, is carbonation of the concrete. For the external reinforced concrete elements of the building, the major cause of deterioration is a combination of concrete carbonation and chloride contamination of the concrete.
· Various other defects were noted during the investigation. These defects are mainly related to the age of the building and have not been included in this report as they are outside our scope of work.

5.0 RECOMMENDATIONS
Our recommendations include carrying out concrete repair work to all the reinforced concrete elements inside the building and to the external walls of the building to regain the structural integrity of these elements and restore the appearance of the building. For the internal concrete reinforced elements of the building, two repair techniques are recommended: concrete patch repair and re-alkalisation of concrete. For the external façade of the building, patch repair, including localised cathodic protection application, and coating are recommended.

In order to achieve the optimum solution for the repairs, and to finalise the cost of these repairs it is essential to carry out a pilot project for one of the units and a selected area of the façade. The pilot project in the unit shall include full delamination testing of all the elements in the unit, patch repair, electrochemical repair as necessary and general rectification work. It is necessary that the unit be vacated for such a pilot. For the pilot of the section of the external façade, the work shall include repair work and coating of the selected area and further investigation of cathodic protection application. The duration of the pilot project would be approximately 30-40 days. On completion of this pilot, an accurate methodology and costing for the repairs for the whole building can be prepared and submitted for further consideration.

94 . Close Consultants Pty Ltd in January 2001 also recommended that a pilot project for one unit and one area of the façade be undertaken to trial various techniques of repair and rectification. We have not seen any reports that this was in fact done. The

The new results concur with previous results, suggesting that the main causes of existing defects and potential deterioration problems are concrete carbonation, low concrete cover to reinforcement, poor concrete mix design and general defects related to the age of the building. A combination of chloride and carbonation was found to be the cause of existing defects at the front facade

of the building.

Mr Mitchell’s Summary Report of March 2002

96 . We have considered other past technical reports that were commissioned by or on behalf of the owner concerning the building but do not propose to refer in detail to each of them, because Mr N Mitchell of Richmond + Ross Pty Ltd has prepared a comprehensive 35-page report dated March 2002 entitled Summary Report of Past Structural and Building Condition Assessments (pt ex D). Besides summarising past reports, Mr Mitchell expressed opinions regarding the current structural adequacy of various elements in the building and made recommendations for further action or investigation.

2. RECOMMENDATIONS SUMMARY

The following recommended works are discussed in the report, which should be referred to for background information concerning each item.

(1)

To assist in identifying areas of the floors slabs of concern, quantifying the extent of repair works required, and calibrating the defects to areas of water ingress, it is recommended that the firms who have recently conducted condition surveys and testing, collate their observations and test results onto plans showing the original room layouts of the Units (Flats).

(2)

Reconstruct the existing roof and remove any concrete of the original roof where this might otherwise pose a present or future risk of collapse.

(3)

Investigate any cracking of the existing walls and design repair works. Study the condition of the existing bricks and mortar and conclude regarding possible salt ingress, increased permeability, adequacy of mortar jointing and any detailing issues that influence moisture penetration.

(4)

Study render for drumminess and cracking and design repairs as required. Give consideration to the application of a compatible waterproofing type of render.

(5)

Study the existing coating systems on the building and design works to remove any systems that are unsuitable for use on solid masonry. Select new coating system after reviewing options of mitigation of moisture penetration, including penetrating sealants, membranes and traditional coating systems. Assess proposed coating system(s) for compatibility with the performance of the wall, bond to substrates, waterproofing performance, cost and maintenance implications.

(6)

Repair external concrete elements with existing defects and with a strong risk of future reinforcement corrosion. Conduct a limited study to test for chloride ingress and to confirm the extent of the work required.

(7)

Repair existing timber windows or replace. Reseal as required to prevent moisture ingress.

(8)

Due to the apparent history of significant corrosion occurring at lintels that were replaced during the 20-year history covered by the reviewed reports, and in view of the difficulty of adequately maintaining the paint coatings to lintels at a four-storey building, consideration should be given to the installation of stainless steel lintels. Chloride ions in the atmosphere will continue to lead to corrosion of mild steel lintels, even if they are initially hot dip galvanized and painted, at a much faster rate than in buildings in a less severely exposed environment.

(9)

Bathrooms should be appropriately waterproofed to comply with current Australian Standards as far as is practical. This will protect the reinforcing slabs beneath from moisture ingress, which will be required if the original concrete is suitable for retention

(10)

Exhaust fans should be installed. Provision for windows to be secured in a semi open position should also be considered as this will assist in reducing nuisance and possible structural damage from condensation.

(11)

Existing corroded and leaking pipework should be replaced. We understand that it is proposed to replace all pipework.

(12)

To assist in confirming any deterioration of the unrepaired areas of original reinforced concrete slabs, and to confirm whether past problems are restricted to areas that were subject to moisture ingress, petrographic examination of concrete samples from wet and dry areas is recommended.

(13)

To confirm the strength of the existing original concrete and to confirm whether past moisture ingress has affected the strength, compressive strength testing of three samples from each of wet and dry areas is recommended.

(14)

To provide calibration of the results of petrographic examination and strength testing with other testing carried out to date, it is proposed to undertake limited testing to measure the cement and sulphate content of a representative sample, and to assess the degree of carbonation in each core.

(15)

Other inspection and testing works are recommended in this report that are subject to the findings of the above recommending concrete testing. For example, if the existing concrete in dry areas of the building is found to be reasonably sound and suitable for retention for support of the entire floor loads, assessment would then proceed to evaluate the incidence and significance of cracking that has been observed at the interface between walls and floors.

(16)

Further examination would be required of the condition of concrete where it is slotted into the external walls, since these areas would possibly have been subjected to a relatively severe exposure, including chloride ion ingress, as well

as

carbonation, moisture ingress and possible sulphate related problems. These areas are significant as the slab is supported at these locations and the presence of corroded reinforcement would be highly undesirable.

(17)

The performance of past concrete repairs and secondary support systems for internal concrete slabs would also require further evaluation if these were being considered for retention without modification.

(18)

Provide adequate fire protection to any existing structural steelwork to be retained.

(19)

Repair subsided footings.

(20)

Consider a broad range of options for upgrading of the existing floor slabs if they are assessed as inadequate in their current and projected future condition for support of proposed loads during the intended design life of the conservation works. Such options might include:

(a)

Deferred local repairs and ongoing monitoring to pinpoint the time when repairs become necessary (the nuisance of monitoring would probably be undesirable in the present context);

(b)

Patch repairs (almost certain to be required);

(c)

Recasting of local areas (almost certain to be required);

(d)

Strengthening of local areas or of whole slabs;

(e)

Provision of new concrete floors beneath the existing floors, which would be preserved for conservation reasons and which would reduce the cost of demolition works;

(f)

Replacement of large slab areas;

(g)

Re-alkalisation;

(h)

Chloride extraction;

(i)

Application of a corrosion inhibitor;

(j)

Cathodic protection (external).

(21)

Replace defective terrazzo steps and repair tiled foyer areas where defective or past repairs are unacceptable (architectural issue).

Mr Mitchell’s statement of evidence of August 2003

2.0 EXISTING BUILDING CONDITION
2.1 Structure of the Building
The existing structure is a four-storey residential apartment building reported to be constructed in 1918. It is understood the building has been registered as a “heritage” item by Manly Council. The building is generally of full masonry construction with load bearing masonry walls and suspended concrete floors. The ground floor is partly of timber construction. The roof structure is steel sheeting on framing built off the original roof, a concrete slab. The balconies are suspended concrete slabs. Some balconies are cantilevered from the building. On our inspection we noted various concrete beams and lintels built into the walls. In the individual units visited, the interior floor finishes were commonly hardwood timber boards supported from the concrete slabs by shallow bearers, with tiles laid onto a bed over the slabs in wet areas. Common areas were generally timber floorboards supported from concrete slabs by battens. This is consistent with previous reports and as noted in our March 2002 report.

2.2 Site Soil & Environmental Conditions
The site is located on the beach front at Manly. The geotechnical report indicates that the building is founded on sand with a depth of at least 5.9m (depth of Dynamic Cone Penetrometer test undertaken). The geotechnical report was prepared by Mr P Wright from Jeffery and Katauskas who has indicated that he expects the sand profile to be considerably deeper, however this has not been confirmed by testing.

A test pit prepared at the time showed the building to be supported by concrete strip footings. This is consistent with our observations on the site.

The location of this building would be Class B2 exposure in accordance with the current concrete design code AS 3600. The current masonry design code AS 3700 would consider the site to be exposure grade.

2.3 General condition

Based on review of the previous reports and our inspections of the building I consider that:

• the general condition of the building walls is fair, the finishes and exposed surfaces of the building are in a state of wear consistent with the age and nature of the building. We have noted some areas of damp on external walls, drummy plaster and localised areas of render failure No large or obvious wall cracking was noted or has been reported,

• the general condition of the building floors/ ceilings and roof slab is poor, significant concrete spalling [1] has been previously reported in the slabs and signs of spalling were observed in some units inspected, as was cracking in the ceilings, no major floor slab deflections have been reported or were noted, and

Note 1

. Spalling is the separation of portions of the concrete slab from the main body of the concrete, a precursor of this is usually a jagged crack in the concrete which comes to a peak.

• the general condition of the internal wet areas is poor to fair, significant localised water penetrations from wet areas has been reported and were noted on site.

In my opinion the key item of concern in this building is the ongoing spalling of the concrete. I have based this opinion on our observations and a review of the previous reports.

During our inspections we have observed one area of active spalling concrete, however a number of areas have temporary boards in place which we have been told are to prevent spalling concrete from falling. Significant areas of spalled concrete are noted in other reports or can be inferred from various quotations for work and we assume that these have either been repaired using patch techniques or are being supported by false ceiling structures. Investigation of one unit’s ceiling cracks indicated an area of repaired concrete spalling (unit 12).

Based on the reports and our observations, I consider that the spalling is being caused by corrosion of the steel reinforcement.

Corrosion of the steel reinforcement will occur when the concrete is exposed to moisture and air and once the passive protection of the concrete has been lost due to carbonation [2]. The presence of chlorides and sulphates are known to exacerbate the problem.

Note 2

. Carbonation is a chemical process involving carbon dioxide, which reduces the alkaline level in the concrete. The alkaline levels in concrete protect the steel reinforcement from corrosion.

144 . Assuming that there would be an initial deficit in respect of a repair option (item 10 in par 139), would the shareholders ever recover the deficit? Mr Large was of the opinion that the on-completion value would rise over the years, and that the increased value would recoup the deficit. Assuming a deficit of $2,700,000 or on average $122,727 per unit-holder, Mr Large was of the opinion that, based on historical evidence of market increases for Manly home units, that amount would be recovered in two years (p 15 ex 9).

145 . Mr Preston put the proposition to Mr Large that if the work were not carried out there would also be a movement in the market that would result in a similar movement in the value of the subject property. However, Mr Large said that if there was a big problem in one of the other units, for example one of the ceilings falling down, it would probably affect the value of all the units.

146 . We do not accept that the proposition put to Mr Large by Mr Preston is correct. If substantial repairs are not carried out on the subject building, it will continue to deteriorate. The unsatisfactory condition of the building must adversely affect the market value of the property and the value of the shares relating to individual units. The present condition of the building with its obvious and hidden problems would be a disincentive to many potential purchasers if they were aware of the matters that have been presented in evidence to the Court. If the building deteriorates, this could result in additional costs for insurance and in declining rental income.

147 . It seems to us that the carrying out of a repair program is necessary for the shareholders to preserve their capital investment and to take advantage of continuing market increases at Manly which may not now be accruing to their investment. We tend to think that Mr Large’s view about recouping the deficit may be correct, but the recoupment may be over a much longer period than two years, because interest on a housing loan to service the deficit would probably have to be taken into account. The evidence of the investment bankers below also has to be considered.

MR GARRATT’S EVIDENCE

148 . Mr R. Garratt is the chairman of the board of directors of Dungowan Manly Pty Ltd, the company that owns the subject site. He gave evidence concerning the steps the board had taken to investigate and seek to overcome the multitude of problems evident in the building. As part of his evidence, he produced a thick bundle of minutes of meetings, correspondence, reports and other company documents (ex AG).

149 . An examination of the minutes of the company meetings over many years shows that the company authorised and paid for the carrying out of repairs to certain units. However, it does not clear that these repairs were carried out in accordance with a sufficiently rigorous and comprehensive repair program aimed at addressing fundamental problems affecting the whole of the building. Mr Garratt said that after the new board of which he is chairman took over the running of the company, the company has not undertaken repair work except for works that were necessary because of an imminent danger. Instead, money that would have been expended on repair work has been put towards the expenses associated with the present development application.

68. I have no doubt that option 1 is not feasible. The directors have a duty to prevent the company incurring a debt where they suspect, or a reasonable person would be aware, that the company would become insolvent by incurring the debt, meaning that the company would not be able to pay all its debts as and when they become due and payable. I refer to the Corporations Act, sections 588G(1) and (2), and 95A(1)). A pecuniary penalty of up to $200,000 may lie against a director who commits such a contravention, as well as a compensation order in favour of the company, and an order disqualifying the person from managing a company (which would include being a director) (I refer to sections 1317E, 1317H and 206C of the Corporations Act).

69. The directors all know that the company does not have the means to repay a loan of $7 million or more (taken out for option 1 works) on its due dates for repayment. All know that the company would be entirely dependent on its shareholders to repay any such loan.

70. The directors know that all shareholders do not have available funds to commit their required part of a total of $7 million or any thing like that amount. I do not know of any shareholder who does, and know of many who don't. The fact that the shareholders hold shares in the company, which the company might attempt to sell in the future to meet a levy to repay moneys that the company had borrowed would afford me with no real comfort that the loan would be fully repaid let alone on time. Such shares are already known to be encumbered in many cases, and the shareholder may take action to resist the seizure and sale.

71. It would not in any event be proper to take a loan in such circumstances, in my view. It is highly likely that a number of shareholders would not be able to pay their levy when the time came, in consequence of which the lender would probably sell the entire building as mortgagee unless the other shareholders who had already paid their share paid for the defaulters as well. It would not be right, in my view, to expose them to paying twice and to the risk of losing the building even if they had paid their share. In my view, to permit the company to contract a loan in such circumstances would not be to act with reasonable care and diligence (I refer to s. 180 of the Corporations Act).

72. For the reasons given above, it would, in my view, be unlawful for the directors to permit the company to borrow and accept a liability to repay $7 million or more (and I, as a director, would not only not vote in favour of such borrowing but would be obliged to oppose it strongly) unless the directors knew that all shareholders had the means to pay, and would pay their share of the loan on or before the due date, which is not the case.

73. In any event, a bank would not lend to the company without secured commitments from shareholders. According to Mr Reardon's evidence, a lender would require to see that each shareholder had (on the average) $100,000 of uncommitted income per flat in order to support the repayment of a loan over 10 years. I know that many shareholders (myself included) could not satisfy that criterion. I don't know of any who does. (If Mr Murphy does, I understand that he is presently attempting to sell his 5 flats, and is not prepared to enter into such a commitment.) Further, as Mr Reardon indicates, a bank would require shareholders to undertake joint liability with other shareholders. I cannot imagine that any shareholder would be willing to jeopardise his or her life savings by undertaking any such commitment. None of the members of the board would. This is not a matter which the board could impose, even if it were minded to do so. It is a matter which each shareholder must undertake by binding agreement with the lender.

74. If the company is unable to obtain the development approval which it seeks, the shareholders will want, according to all my dealings with them, to continue occupying or letting their flats for as long as insurance cover for the building can be maintained. In the time that I have been a director only one shareholder has ever suggested that the company might sell its building. That was Mr McLaughlin. The shareholders have never supported the idea. All (including Mr McLaughlin) have expressed their attachment to the building. During this period there would be no point in spending shareholders' funds on attempting substantial repairs, though it would be necessary at least to shore up spalling concrete for safety reasons.

75. If public risk and fire insurance cover is declined in respect of the building or becomes unaffordable, the directors will have to arrange its immediate evacuation and boarding up. No director could face the personal consequences, legally and morally, in my view, of permitting the continued occupation of an uninsured building frequented by so many people. Nor in my view, would it be responsible for the directors to expose the company to the potential adverse financial consequences of permitting the continued occupation of the building uninsured.

76. It must be likely that if the building were boarded up that it would quickly go to rack and ruin. I do not see how the directors could prevent windows being smashed, the elements having free entry, and squatters and vandals breaking in.

77. If the requested DA is refused and the building subsequently has to be vacated, there is no way that I know of for the company to save the building.

78. If the building is vacated, the shareholders will not be able to occupy their flats or earn rent from them. The board would then need to consider how to maximise for shareholders the value of their investment. This would only be possible, it seems at present, by offering the site at some future time for sale or re-development. I have no reason to think that any purchaser will want to repair the existing building.…

79. If the requested DA is refused and the building is vacated, in time other persons interested in re-developing the site will consider how the site may be optimally re-developed. Any substantial offer worthy of consideration by the company is unlikely to be received until a developer is satisfied that the likely state of deterioration of the building at the intended date for applying for development approval will be such that the demolition of the building could not be successfully opposed by the Council. Developers will be unlikely to want to expend money purchasing the site until that point is reached in order to minimise holding and finance costs. It will also be obvious to developers that delay will put pressure on shareholders to sell, particularly those anxious for reasons of age and limited means, or who owe money on their shares. At the appropriate time the board would take advice about the re-development options for the site, and their likely impact on the market value of the site, for the purpose of considering offers made and how the company might market the site or offer it for re-development. I expect that this process will take several years. The board would not sell the site without broad shareholder approval and after full consultation with shareholders. A sale would be of critical importance to all shareholders as it would represent the realisation of a substantial part of the life savings and retirement assets of each of them. All would want to achieve the best price possible by a sale of the site on a disposal. On the other hand, some shareholders will be anxious or under financial pressure, and will want the company to sell, or to sell their shares, for less than they might otherwise achieve. For these reasons I would expect the consultation process with shareholders would take considerable time and would need to allow all shareholders time to take their own advice. In the circumstances, it is clear to me that if the requested DA is refused, the existing building will be lost.

151 . A letter dated 11 October 2002 from St George Bank Ltd to Dungowan Manly Pty Ltd (c/- Mr Garratt) sets out the terms upon which that bank would lend $12,801,334 for the applicant’s proposed development (option 3), on certain terms and conditions, one of which was that the principal is to be repaid from the sale of the proposed new eight units in the addition or from refinance. On present information development option 3R that is now the amended application would require a loan of at least $14,876,000.

152 . When asked about the likely financial arrangements for the proposed development, Mr Garratt said that he expected that there would be two loan facilities. One facility would finance the proposed works, during the carrying out of which units would be sold off the plan. The other facility would be a longer-term loan to pay off the balance of the cost of the works. Alternatively, there would be a levy made on the shareholders.

153 . Mr Garratt said that upon completion of the works, a strata title would issue for each unit. However, he said the company would retain ownership of the each title, until that part of the loan attributable to a particular unit was paid out. If a shareholder wished to sell his or her reconstructed unit after it had been strata titled, it would be a requirement that the purchaser of the unit pay out the company (the portion of the loan attributed to that unit) in order to get an unencumbered title. We are not sure how this would work and have not seen any proposed documentation setting out the financial arrangements or the legal agreements that presumably would be needed between the existing shareholders and the company.

154 . We accept that, as presently advised, the board of Dungowan Manly Pty Ltd would not wish to undertake development option 1. It is not the role of the Court to impose upon the company any particular option.

EVIDENCE FROM FINANCIERS

155 . Mr Fermanis and Mr Reardon provided evidence on whether the company would be able to finance either an option where the building is refurbished (development option 1R) or the development proposal (development option 3R). Mr Fermanis concluded that either option would be able to obtain finance. He based this conclusion on a consideration of the following factors:

(1) The Borrower . The only asset of Dungowan Manly Pty Ltd is the company title building, Dungowan. This building is unencumbered and is in a prime location on Manly Beach front. Under the Articles of Association, the company has the power to borrow and levy its shareholders. Although, now unusual, the company title structure is not an impediment to obtaining a loan.

(2) The strength of the borrower. The main strength of the borrower is the building and its location. Lenders are very comfortable with security located directly opposite the beach. The Manly Beach front is considered a very prime location and therefore would be a major consideration when lending institutions consider a loan application.

(3) Security. The security for a loan would be a first mortgage. Based on the value of the property and the cost of works in either option, the loan to value ratio is conservative.

(4) Repayment. For the refurbishment option the only source of repayment is the current shareholders. The company has the power to levy the shareholders and to sell apartments if the shareholders defaults on payments. The financial situation of each shareholder is not known, however as the loan would be with the company, the personal situations of individual shareholders would not be essential for the lender in assessing the repayment capacity of Dungowan Holdings Proprietary Limited.

(5) Terms and Conditions . Agreement would need to be reached on borrowing at the company level for either the refurbishment or the redevelopment option.

(6) Market considerations. Movement in interest rates and apartment prices falling are considerations but the Manly area continues to be viewed very favourably by lenders and consequently movement in interest rates have not had any noticeable effect on the lending.

156 . The key area of disagreement between Mr Reardon and Mr Fermanis’s assumptions was that a prudent lender would be unlikely to provide finance for the company relying on the value of the property alone and that the first mortgage would not be sufficient security. Mr Reardon took issue with Mr Fermanis’s statement that the only source of repayment for the refurbishment option is the existing shareholders but that the personal situations of the shareholders is not necessarily essential as the low loan to security ratio would allow for a bank to foreclose and have its loan repaid by realising mortgage security only, without the need to have recourse to the shareholders. Mr Reardon considered this conclusion to be wrong for the following reasons:

(1) It would not be sound contemporary lending practice to ignore the adequacy of the source of repayment, regardless of the strength of security. A prudent lender will not put itself in a position where there is only one realistic method of repayment.

(2) A lender would also be concerned about potential legal challenges by the company or the shareholders to any sale of the security and adverse publicity resulting from a forced sale.

(3) Prudent directors of a company would not commit to borrow funds without an identified and adequate source of repayment.

(4) A lender would be unlikely to rely on the company to exercise its power of sale of the shares. Each shareholder would be required to grant a first mortgage over the shares to the lender in addition to the mortgage over the company's freehold title to the land.

157 . Mr Reardon accepted Mr Garratt’s evidence that shareholders will not be able to satisfy a $100,000 uncommitted after-tax income requirement and therefore the company would not be in a position to borrow money for a refurbishment.

158 . In relation to the development option 3R, Mr Reardon’s evidence was that the issues discussed above would not arise as pre-sales of the newly constructed units would be taken into account in addition to the security offered by the building and that therefore finance for the project would be available.

159 . Mr Fermanis agreed that the pre-sales of the units would assist in repaying the loan but stated that it is “always prudent to borrow the least amount possible due to the risks associated with the loan.” Mr Reardon did not agree with this statement on the basis that “borrowing less with no apparent source of repayment, with its significant net loss in value, could not be considered prudent, when there is an alternative to carry out the works by borrowing more against an identified incredible source of repayment (i.e. pre- sales).”

In the absence of pre-sale contracts for the eight additional units and car spaces, a lender would be concerned about the company’s ability to service the debt

However, the pre-sale contracts provide the company with an external source of cash which lenders would be prepared to rely on.

There appear to be two sources of repayment of these residual costs

as follows:

· The company could levy the shareholders the total amount (average $71,000). This approach would be unlikely to be acceptable to a lender, as a lender would not be prepared to rely on the company's ability to recover levies at that level, and it is unlikely and lender could be satisfied that all the shareholders could meet the commitment at that level. Given that conclusion I do not analyse this alternative further.
· The company could enter into a term loan which would be repaid from levies…... Under this scenario, the loan is fully repaid after 10 years relying on the company's ability to collect levies in line with its proven record.

Facility No 1—

construction finance to meet the monthly progress claims for the builder and consultants. This loan is then repaid on completion from:

Proceeds of sales of the additional units; and

Drawing down on a term finance facility referred to below.

Facility No 2

—a term finance facility which will be repaid on escalating principal and interest basis over 10 years, relying on the company collecting levies from shareholders to meet the repayments.

163 . Mr Reardon provides detailed information on how each loan is to be secured (on page 9 of his Statement of Evidence). Without examining the detail, Facility 1 relies on the mortgage over the property and the pre-sales of the unit. In addition “several guarantees from the existing shareholders are required” but not a security over the shareholders shares. Facility 2 relies on the mortgage and “given the low level of leverage and the clear ability of the company to recover levies sufficient to service the debt, the lender will regard the quality of the above security as high.”

164 . Mr Fermanis’s evidence is that the main difference between option 1R and option 3R is profit and that both options are able to be funded. Mr Reardon’s and Mr Garratt’s evidence was that the shareholders do not have the means to borrow for refurbishment. However, Facility 1 requires existing shareholders to act as guarantors for a much larger and riskier loan. The interest only on any pre-sale deposits of units contracted to be sold would not provide any significant income available to the company during the time of construction. Facility 2 requires the company to levy an amount of $71,000 from shareholders.

165 . The shareholders, who are mainly investors, may wish to pursue development option 1, as it does not achieve a profit. However, in reaching a decision, the company and shareholders would need to consider the declining value of the asset and reduced rental income as well as the increased costs of maintenance and insurance if nothing is done. They would also need to consider the cost of reconstruction if the building were to deteriorate to the extent that approval were to be given for its demolition and the ability of the company to obtain finance in that scenario, particularly where the existing building exceeds the current planning controls.

GENERALLY

166 . The subject building is not of State heritage significance and so is not listed on the State Heritage Register under the Heritage Act 1977. Therefore the owner, Dungowan Manly Pty Ltd, cannot enter into a heritage agreement with the Minister for the conservation of the building (s 39), and so the owner cannot receive financial assistance under s 45(2) for the payment of land tax, duty or council rates. No expert who gave evidence claimed that Dungowan had State or National significance.

167 . While the subject building does have local significance as a heritage item, we do not think that it has such significance that it ought to be preserved by the owner irrespective of what it may cost to do so. However, we do think the owners should not necessarily be subsidised through additional development, where the additional development breaches the planning controls.

Hunters Hill Municipal Council v Villa Floridiana Pty Ltd

“So identified

, its demolition is prohibited without consent. The

significance

of the item is then assessed to enable a determination by Council whether such consent should be granted. In my opinion, no presumption arises so as to preclude the granting of such consent merely as a consequence of its identification as an item of the environmental heritage, or even if it has some significance.”

169 . The actual application before us is for consent to demolish the rear half of the existing building and, subject to conditions, to demolish a substantial part of the front half (in particular the floor slabs and roof slab). Although there are reasons that, on the one view, would justify a refusal of consent for the demolition itself, it is the more the unacceptability of the proposed replacement building in conjunction with the partial demolition of the existing building that leads the Court to refuse the present development application.

170 . In the present appeal the applicant’s experts took the view that the rear half of the building does not have such significance as to justify its preservation, and that the rear half could be demolished and rebuilt with new materials in order to provide a basement carpark and allow for the construction of columns to support four additional storeys above the rebuilt rear half; as well, the roof and probably substantial parts of the floor slabs in the front half of the existing building would have had to be demolished and reconstructed. One of the main heritage reasons put forward by the applicant justifying the proposed development was that the sale of the new units would fund the carrying out of reconstruction for residential use of the front four storeys and the reconstruction of the front facade so as to reflect the features seen in a 1924 postcard. The applicant’s experts found this to be conservation, since in their view it was the only feasible option to conserve the building. As indicated elsewhere in this judgment, the Court is of the opinion that the proposed development would be not be a good example of conservation and other options with less impact have not been sufficiently investigated. The proposed development is unacceptable having regard to the planning controls and the highly significant setting of the subject site.

ORDERS

1. The appeal is dismissed.

_________
A J Nott
Commissioner of the Court

____________
Annelise Tuor
Commissioner of the Court

[Schedule A – attached.]

Schedule A

“ex”

Applicant’s Exhibits

A
Amended plans prepared by Architectural Projects amendment date 14.04.03 drawing nos. 01.833: C-DA01 to C-DA16 all issue A, and C-SK101 to C-SK104 issue A. [As amended by ex B and ex AK below.]

B
Shadow diagrams C-DA16B.

C
Statement of Mr N Mitchell, civil and structural engineer, of Richmond +Ross Pty Ltd, August 2003.

D
Annexure A to the statement of Mr Mitchell, containing previous reports.

E
Statement of Ms J Hill, project architect, August 2003, and appendices.

F
Statement of Professor R Mackay, August 2003.

G
Statement of Emeritus Professor G Webber, 20 August 2003.

H
Statement of town planner Mr R Chambers, 21 August 2003.

J
Statement evidence of Dr R Lamb, 20 August 2003.

K
Statement of Mr B Davies, quantity surveyor, of BDA Consultants Pty Ltd, 20 August 2003.

L
Supplementary statement of Mr B Davies 26 August 2003.

M
Statement of Mr T Phelan, registered valuer, 16 July 2003.

N
Supplementary statement of Mr Phelan, 28 August 2003.

O
Statement of Mr G. Pindar, transport planner, 20 August 2003.

P
Reply of Mr Chambers, August 2003.

Q
Class 1 application and attached documents.

R
Letter of 21 August 2003 of C Ashford of unit 20 Dungowan.

S
Model of proposed building and adjoining buildings.

T
Reply of Prof Mackay to Mr Patch.

U
Joint supplementary statement of applicant’s experts Mr Mitchell and Ms Hill, re rebuilding internal floor slabs of the front section of the building.

V
Joint statement of quantity surveyors Messrs Davies and Kirkland.

W
Letter dated 28 February 1994 from the National Trust: the building has been classified and is included in its register.

X
Letter dated 30 May 2003 from Professor Mackay to the National Trust, and the Trust’s letter dated 10 June 2003.

Y
The Illustrated Burra Charter: front cover and p 37.

Z
Letter of Close Consultants Pty Ltd, 19 July 2001: $2.5 million for repairs was a “rough estimate”.

AA
Coke breeze concrete sample with nail.

AB
Comparison sample of concrete.

AC Plan of Mr Mitchell indicating problem areas or possible problem areas in existing slabs.

AD
Report of Trevor R Howse dated 28 November 2000 recommending works to achieve the objectives of the BCA.

AE
Supplementary statement of Mr Davies dated 12 September 2003, giving revised costings for options 1 and 3 if the slabs in the front half are replaced; comparison with options 1R, 2, 3R and 4.

AF
Supplementary statement of Mr Phelan 12 September 2003: value of units in options 1 and 3.

AG
Statement of Mr M Garratt 19 September 2003, plus folder of financial statements, minutes of board meetings and correspondence (318 pages).

AH
Statement of Mr R Reardon of Sage Capital Pty Ltd, 12 September 2003.

AJ
Memorandum and articles of association of Dungowan Holdings Pty Ltd.

AK
Drawing of cross sections of proposed building, and sightline from promenade, no. C-DA15B.

AL
Reply of Mr Reardon 23 January 2004.

AM
Draft conditions of consent with amendments.

AN
Aon Insurance Services fax.

AO
Further amended draft conditions.

AP
Statement of Mr Howse 8 April 2002, re compliance with principles of BCA.

“ex”

Respondent’s Exhibits

1
Statement of evidence of town planner Mr P Grech, August 2003.

2
Statement of heritage consultant and architect Mr G Patch, August 2003.

3
Appendix E to Mr Patch’s statement, containing Statement of Environmental Effects, and Conservation Management Plan.

4
Appendix F to Mr Patch’s statement: Structural and Building Appraisal Reports: Summary Report of past Structural and Building Condition Assessments by Richmond and Ross Pty Ltd, March 2002; Building Condition Preliminary Report by Bonacci Rickard (NSW) Pty Ltd, November 2000; reports by Close Consultants Pty Ltd; and other reports and letters.

5
Manly Local Environmental Plan 1988.

6
Burra Charter, 1999.

7
Development Control Plan for the Residential Zone 2001 (Amendment 1), June 2003.

8
Letter of C3D plus plan 30801T3 relating to the production of the photomontages.

9
Report of Mr T Large, registered valuer, July 2003.

10
Joint report of expert valuers.

11
Statement of Mr P Kirkland, quantity surveyor, August 2003.

12
Draft conditions of consent. [See now ex AO.]

13
Joint statement of Messrs Davies and Kirkland. [Ex V is similar but has additional details.]

14
Joint statement of Mr Patch and Professor Mackay.

15
Bundle of council documents, including: development application, report to council and notice of determination of 4 November 2002, statement of issues, and letters from residents.

16
Joint statement of Mr Chambers and Mr Grech.

17
Photos of the interior of Dungowan by Mr Patch.

18
Agreed calculations of gross floor area.

19
Hydraulic services ground floor drawing H02/P2, and sediment control drawing SW/P1.

20
Statement of Mr C Fermanis, executive director of Hill Young & Associates.

21
Letter of D & J McLaughin of 8 December 2003 enclosing letter of Mr Garratt 6 October 2003, letter of Adamson Solicitors 28 October 2003, Letter of Richardson & Wrench 17 November 2003, and two letter of Adamson Solicitors 25 November 2003.

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Citations

Architectural Projects Pty Ltd v Manly Council [2004] NSWLEC 311

Cases Citing This Decision

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Cases Cited

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Statutory Material Cited

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Morgan & Banks Properties Pty Ltd v Manly Council [2002] NSWLEC 251

CITATION:	Architectural Projects Pty Ltd v Manly Council [2004] NSWLEC 311
PARTIES:	APPLICANT Architectural Projects Pty Ltd RESPONDENT Manly Council
FILE NUMBER(S):	10179 of 2002
CORAM:	Nott C - Tuor C.
KEY ISSUES:	Development Application :- proposed demolition of the rear half of a large four-storey heritage item "Dungowan" on South Steyne at Manly - reconstruction and erection of an eight-storey tower at rear - poor structural condition of whole of building - tower in breach of various planning controls - applicant claims that the of sale of new units in the proposed tower is needed to finance the conservation of the front half of building - economic and heritage considerations
LEGISLATION CITED:	Environmental Planning and Assessment Act 1979, s 97
CASES CITED:	Morgan & Banks Properties Pty Ltd v Manly Council [2002] NSWLEC 251; Hunters Hill Municipal Council v Villa Floridiana Pty Ltd (1990) 70 LGRA 62
DATES OF HEARING:	1 - 5 & 9 September 2003; 2-3 Februray 2004
DATE OF JUDGMENT:	07/21/2004
LEGAL REPRESENTATIVES:	APPLICANT Mr B J Preston SC and Ms K J Williams, barrister SOLICITORS Mallesons Stephen Jaques RESPONDENT Mr J A Cole, solicitor SOLICITORS Abbott Tout

“ex”	Applicant’s Exhibits
A	Amended plans prepared by Architectural Projects amendment date 14.04.03 drawing nos. 01.833: C-DA01 to C-DA16 all issue A, and C-SK101 to C-SK104 issue A. [As amended by ex B and ex AK below.]
B	Shadow diagrams C-DA16B.
C	Statement of Mr N Mitchell, civil and structural engineer, of Richmond +Ross Pty Ltd, August 2003.
D	Annexure A to the statement of Mr Mitchell, containing previous reports.
E	Statement of Ms J Hill, project architect, August 2003, and appendices.
F	Statement of Professor R Mackay, August 2003.
G	Statement of Emeritus Professor G Webber, 20 August 2003.
H	Statement of town planner Mr R Chambers, 21 August 2003.
J	Statement evidence of Dr R Lamb, 20 August 2003.
K	Statement of Mr B Davies, quantity surveyor, of BDA Consultants Pty Ltd, 20 August 2003.
L	Supplementary statement of Mr B Davies 26 August 2003.
M	Statement of Mr T Phelan, registered valuer, 16 July 2003.
N	Supplementary statement of Mr Phelan, 28 August 2003.
O	Statement of Mr G. Pindar, transport planner, 20 August 2003.
P	Reply of Mr Chambers, August 2003.
Q	Class 1 application and attached documents.
R	Letter of 21 August 2003 of C Ashford of unit 20 Dungowan.
S	Model of proposed building and adjoining buildings.
T	Reply of Prof Mackay to Mr Patch.
U	Joint supplementary statement of applicant’s experts Mr Mitchell and Ms Hill, re rebuilding internal floor slabs of the front section of the building.
V	Joint statement of quantity surveyors Messrs Davies and Kirkland.
W	Letter dated 28 February 1994 from the National Trust: the building has been classified and is included in its register.
X	Letter dated 30 May 2003 from Professor Mackay to the National Trust, and the Trust’s letter dated 10 June 2003.
Y	The Illustrated Burra Charter: front cover and p 37.
Z	Letter of Close Consultants Pty Ltd, 19 July 2001: $2.5 million for repairs was a “rough estimate”.
AA	Coke breeze concrete sample with nail.
AB	Comparison sample of concrete.
AC	Plan of Mr Mitchell indicating problem areas or possible problem areas in existing slabs.
AD	Report of Trevor R Howse dated 28 November 2000 recommending works to achieve the objectives of the BCA.
AE	Supplementary statement of Mr Davies dated 12 September 2003, giving revised costings for options 1 and 3 if the slabs in the front half are replaced; comparison with options 1R, 2, 3R and 4.
AF	Supplementary statement of Mr Phelan 12 September 2003: value of units in options 1 and 3.
AG	Statement of Mr M Garratt 19 September 2003, plus folder of financial statements, minutes of board meetings and correspondence (318 pages).
AH	Statement of Mr R Reardon of Sage Capital Pty Ltd, 12 September 2003.
AJ	Memorandum and articles of association of Dungowan Holdings Pty Ltd.
AK	Drawing of cross sections of proposed building, and sightline from promenade, no. C-DA15B.
AL	Reply of Mr Reardon 23 January 2004.
AM	Draft conditions of consent with amendments.
AN	Aon Insurance Services fax.
AO	Further amended draft conditions.
AP	Statement of Mr Howse 8 April 2002, re compliance with principles of BCA.
“ex”	Respondent’s Exhibits
1	Statement of evidence of town planner Mr P Grech, August 2003.
2	Statement of heritage consultant and architect Mr G Patch, August 2003.
3	Appendix E to Mr Patch’s statement, containing Statement of Environmental Effects, and Conservation Management Plan.
4	Appendix F to Mr Patch’s statement: Structural and Building Appraisal Reports: Summary Report of past Structural and Building Condition Assessments by Richmond and Ross Pty Ltd, March 2002; Building Condition Preliminary Report by Bonacci Rickard (NSW) Pty Ltd, November 2000; reports by Close Consultants Pty Ltd; and other reports and letters.
5	Manly Local Environmental Plan 1988.
6	Burra Charter, 1999.
7	Development Control Plan for the Residential Zone 2001 (Amendment 1), June 2003.
8	Letter of C3D plus plan 30801T3 relating to the production of the photomontages.
9	Report of Mr T Large, registered valuer, July 2003.
10	Joint report of expert valuers.
11	Statement of Mr P Kirkland, quantity surveyor, August 2003.
12	Draft conditions of consent. [See now ex AO.]
13	Joint statement of Messrs Davies and Kirkland. [Ex V is similar but has additional details.]
14	Joint statement of Mr Patch and Professor Mackay.
15	Bundle of council documents, including: development application, report to council and notice of determination of 4 November 2002, statement of issues, and letters from residents.
16	Joint statement of Mr Chambers and Mr Grech.
17	Photos of the interior of Dungowan by Mr Patch.
18	Agreed calculations of gross floor area.
19	Hydraulic services ground floor drawing H02/P2, and sediment control drawing SW/P1.
20	Statement of Mr C Fermanis, executive director of Hill Young & Associates.
21	Letter of D & J McLaughin of 8 December 2003 enclosing letter of Mr Garratt 6 October 2003, letter of Adamson Solicitors 28 October 2003, Letter of Richardson & Wrench 17 November 2003, and two letter of Adamson Solicitors 25 November 2003.