ERD 1 Pty Ltd v The Council of the City of Sydney

[2025] NSWLEC 1624

Land and Environment Court

New South Wales

Medium Neutral Citation:

ERD 1 Pty Ltd v The Council of the City of Sydney [2025] NSWLEC 1624

Hearing dates:

Conciliation conference on 21 August 2025

Date of orders:

09 September 2025

Decision date:

09 September 2025

Jurisdiction:

Class 1

Before:

Horton C

Decision:

The Court orders that:

(1) The Applicant is granted leave to amend Development Application D/2024/524 to include the documents set out in Annexure A.

(2) The appeal is upheld.

(3) Development Application D/2024/524, as amended, for demolition of the existing building and associated structures and construction of a new part-four storey and part-eight storey residential flat building comprising 25 apartments, three levels of basement for car parking, servicing and storage and a rooftop communal open space at 117 Victoria Street, Potts Point is determined by the grant of consent subject to the conditions at Annexure B.

Catchwords:

DEVELOPMENT APPLICATION — residential flat building in R1 Density Residential zone — residential apartment development — whether reduction in affordable housing — conciliation conference — agreement between parties — orders

Legislation Cited:

Architects Act 2003 (NSW)

Conveyancing Act 1919 (NSW), s 88E

Environmental Planning and Assessment Act 1979 (NSW), ss 1.3, 4.16, 7.32, 8.7, 8.15

Land and Environment Court Act 1979 (NSW), s 34

Environmental Planning and Assessment Regulation 2021, ss 29, 38

State Environmental Planning Policy (Biodiversity and Conservation) 2021, ss 6.6, 6.7, 6.8, 6.9

State Environmental Planning Policy (Housing) 2021, Ch 2, Pts 2, 3, Divs 1, 2, ss 13, 14, 15, 16, 19, 20, 21, 45, 47, 48, 147, 148

State Environmental Planning Policy (Resilience and Hazards) 2021, s 4.6

State Environmental Planning Policy (Sustainable Buildings) 2022, s 2.1

Sydney Local Environmental Plan 2012, Div, 1,
cll 4.3, 4.4, 4.6, 5.10, 5.21, 6.12C, 6.21C, 6.21D, 7.3, 7.14, 7.19, 7.20

Cases Cited:

Toga Penrith Developments Pty Limited v Penrith City Council [2022] NSWLEC 117

Texts Cited:

Guidelines for Retention of Existing Affordable Rental Housing 2009

Sydney Development Control Plan 2012

Category:

Principal judgment

Parties:

ERD 1 Pty Ltd (Applicant)
The Council of the City of Sydney (Respondent)

Representation:

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

Solicitors:
Mills Oakley Lawyers (Applicant)
The Council of the City of Sydney (Respondent)

File Number(s):

2024/377066

Publication restriction:

Nil

JUDGMENT

1. COMMISSIONER: On the western side of Victoria Street, Potts Point, stands a residential flat building built in 1964. The building is proposed to be demolished to permit the construction of a new part-four storey and part-eight storey residential flat building at 117 Victoria Street, comprising 25 apartments, three levels of basement for car parking, servicing and storage and a rooftop communal open space.

2. Development application D/2024/524 seeking consent for the development summarised above was lodged by the applicant in these proceedings, ERD 1 Pty Ltd (ERD) with The Council of the City of Sydney (the Council) on 1 July 2024, and relate to proceedings 2024/377066 (the DA).

3. As the DA was otherwise undetermined, ERD appealed its deemed refusal under s 8.7 of the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act) on 11 October 2024.

4. For completeness, the DA was refused by the Local Planning Panel on behalf of the Council on 18 December 2024.

5. The matter was initially listed before me for, and commenced in, hearing. However, on the fourth day the parties advised the Court that the parties had reached in-principle agreement on the matters in contention, and sought for the matter to be re-allocated for conciliation between the parties under s 34(1) of the Land and Environment Court Act 1979 (NSW) (LEC Act), which was held on 21 August 2025, and at which I presided.

6. A signed agreement prepared in accordance with s 34(10) of the LEC Act was filed with the Court on 6 August 2025. The agreement records the approval of the Council, as the relevant consent authority, to the amending of the application in accordance with s 38 of the Environmental Planning and Assessment Regulation 2021 (EPA Regulation), and the filing of the amended application with the Court, in accordance with s 8.15(3) of the EPA Act, which were effected prior to the conciliation conference.

7. For completeness, on 18 August 2025 the Court granted ERD leave to rely upon amended plans and other documents, by documents that include:

1. Amended architectural plans prepared by Koichi Takada Architects

2. Amended Finishes Schedule prepared by Koichi Takada Architects

3. Amended clause 4.6 Variation requests – Building height, prepared by Planning Ingenuity dated 7 August 2025

4. Amended Design Report prepared by Koichi Takada Architects

5. Chimney Sketch, Drawing A-SK-250 prepared by Koichi Takada Architects

6. Operational Waste Management Plan (Rev I), prepared by Elephants Foot Consulting

7. Amended Landscape Plans prepared by Site Image dated 7 August 2025

8. Root Mapping assessment (v3) prepared by McArdle Arboricultural Consultancy dated 6 August 2025

9. Scope for hydrant and Sprinkler System prepared by Neuron with Statement of Available pressures and flow dated 29 July 2025

10. Updated Cost Estimate Report WT Partners dated 7 August 2025

11. Letter of support prepared by Bridge Housing dated 6 August 2025

12. Structural Design options by M&G Consulting Engineers dated 9 July 2025

13. Additional View Imagery prepared by Urbaine Design Group dated 7 July 2025

14. Updated Preliminary Public Art Plan Issue 5 dated 14 July 2025

15. Rental Appraisal letter prepared by IB Property dated 4 July 2025

8. The parties ask me to approve their decision as set out in the s 34 agreement before the Court. In general terms, the agreement approves the development subject to amended plans that were prepared by ERD, and noting that the final detail of the works and plans are specified in the agreed conditions of development consent annexed to the s 34 agreement.

9. This decision involved the Court upholding the appeal and granting conditional development consent to the development application.

10. Under s 34(3) of the LEC Act, I must dispose of the proceedings in accordance with the parties’ decision if the parties’ decision is a decision that the Court could have made in the proper exercise of its functions. The parties’ decision involves the Court exercising the function under s 4.16 of the EPA Act to grant consent to the development application. There are jurisdictional prerequisites that must be satisfied before this function can be exercised.

11. The site is designated R1 General Residential zone on the relevant Land Zoning Map in the Sydney Local Environmental Plan 2012 (SLEP), in which development for the purpose of residential flat building is permitted with consent, where consistent with the objectives for such development in the zone:

•  To provide for the housing needs of the community.

•  To provide for a variety of housing types and densities.

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

•  To maintain the existing land use pattern of predominantly residential uses.

12. The site is also located in two localities designated by the Sydney Development Control Plan 2012 (SDCP). The eastern portion of the site is located within the ‘Kings Cross’ Locality Area and the western portion of the site is located within the ‘Woolloomooloo’ Locality Area.

The height standard is exceeded

13. The height standard shown on the relevant map at cl 4.3(2) of the SLEP requires that a building on the site is not to exceed a 15m height control. The proposed development is for development with a maximum building height of 28.88m.

14. A written request to vary the height standard prepared by Planning Ingenuity in accordance with cl 4.6 of the SLEP and dated 7 August 2025 (Height Request) states that as the DA is made in accordance with s 16 of the State Environmental Planning Policy (Housing) 2021 (Housing SEPP), a ‘height bonus’ applies to the site so that a maximum height of 19.47m is permitted.

15. As there is a steep and sudden change in topography on the site, the Height Request tabulates the exceedance in height of the various components of the proposed development in Table 1. Those components of the existing building that exceed the height standard are also identified on p 5 of the Height Request.

16. The parties agree, and I am satisfied, that compliance with the height standard is unreasonable or unnecessary in the circumstances of this case as the objectives of the height standard are achieved notwithstanding the non-compliance.

17. The relevant objectives at cl 4.3 of the SLEP are:

(a)  to ensure the height of development is appropriate to the condition of the site and its context,

(b)  to ensure appropriate height transitions between new development and heritage items and buildings in heritage conservation areas or special character areas,

(d)  to ensure appropriate height transitions from Central Sydney and Green Square Town Centre to adjoining areas,

18. The Height Request asserts consistency with objective (a) by reference to the height of the existing and proposed development on both Brougham Street and Victoria Street. To Victoria Street, the parapet to the podium adopts the height of the heritage item to the south of the site, and complies with the height standard. Those components of the development that exceed the height are setback from Victoria Street, and relate to the lift and stair core and to communal open space. To Brougham Street, the proposal is consistent with the height of existing and recently approved development in the immediate vicinity of the site. Those components that exceed include balcony elements, awning structures, glazing and louvres that are largely open, lightweight structures that do not result in unreasonable adverse visual or physical impacts on surrounding properties.

19. The Height Request also asserts the proposal is consistent with objective (b) as, firstly, the height of the development fronting Victoria Street where the heritage values are most prominent complies with the height standard. The components that exceed the height standard are not dissimilar in height to the height of the existing building on the site. To this end, Figure 2 of the Height Request depicts the maximum exceedance of the existing building at RL 49.11 to the uppermost portion fronting Victoria Street. The maximum exceedance by the proposed development in the same or similar location is RL 48.48. Those components that exceed the height standard fronting Brougham Street are not so proximate to items of heritage significance, and relevantly adopts the height of recently approved development to the south of the site.

20. Finally, the Height Request asserts consistency with objective (c) of the height standard by reference to the steps taken to mitigate any adverse view loss from surrounding properties and the public domain and depicted in the View Loss Assessment prepared by Planning Ingenuity and Urbaine Design Group.

21. The Height Request also addresses the objective of Div 1 of the Housing SEPP to facilitate the delivery of new in-fill affordable housing to meet the needs of very low, low and moderate income households.

22. Next, the Height Request sets out grounds that are said to be sufficient to justify the contravention in accordance with cl 4.6(3)(b) of the SLEP.

1. Firstly, the development will deliver affordable housing in a manner that complies with the height standard along Victoria Street but which exceeds the height standard by virtue of the steeply sloping topography on the site in the vicinity of Brougham Street where the exceedance is arguably most evident. That exceedance beyond the components fronting Brougham Street is largely contained within the centre of the site in the form of the core accommodating the lift and stairs that provide access to the rooftop communal open space. Finally, the proposal Is consistent with the object at s 1.3(d) of the EPA Act to promote the delivery and maintenance of affordable housing by allocating seven apartments to a registered community housing provider for a period of 15 years.

2. Secondly, the existing building has already effectively established a building height on the site and is surrounded by buildings that likewise exceed the height standard. It is relevant then that the heights fronting Victoria Street and Brougham Street adopt the height of building elements that either exist, or will shortly do so given recent approvals.

3. Thirdly, where the exceedance is greatest coincides with the portion of the site where the topography falls most steeply in close proximity to Brougham Street. In this location, part of an awning over the Level 9 balcony complies with the height standard but due to the steep fall, a portion located close by represents the greatest exceedance of more than 9m. When the recent approval on an adjoining site is considered, strict compliance would result in an inconsistent streetscape to Brougham Street.

4. Fourthly, the exceedance provides for both private open space in the form of balconies fronting Brougham Street, and communal open space located on the rooftop. In all cases, these elements are open, lightweight components that do not contribute to a discernible increase in bulk and scale.

5. The fifth ground similarly argues that the exceedance is largely limited to open balconies, awning structures and glazing and not internalised floor space.

6. The sixth ground relies on the stepped form and appropriate setbacks from street frontages where those exceedances occur to limit the extent to which the exceedances are visible from the public domain. As such, the proposed development exhibits a high level of design excellence.

7. The seventh ground is that the stepped form reduces the height of the built form in some areas when compared to the existing built form on the site. The assertion is supported by Figure 10 depicting the built form of a recent approval, the proposal and existing bulk that is removed, and existing development further to the north that has greater height. In summary, the proposal removes a building identified as ‘detracting’ to the area, replaced by a proposed bulk and scale that will contribute to the character of the locality.

8. The eighth ground is that the likely amenity impacts of the proposal are effectively established by the existing building in terms of overshadowing, privacy and extent of view sharing.

9. The ninth and tenth ground are that the proposal represents orderly and economic use of the land in accordance with s 1.3(c) of the EPA Act, and achieves the aims and objectives of the EPA Act and the Housing SEPP.

23. I note here that the Council is satisfied that the height request adequately addresses the matters required to be demonstrated by cl 4.6(3) of the SLEP and does not contend that the contravention of the development standard raises any matter of significance for State or regional environmental planning, or that there is any public benefit in maintaining the development standard.

24. Accordingly, the Council raises no issue regarding cl 4.6 and accepts that a variation of the height development standard under cl 4.3 is justified under the SLEP.

25. I am satisfied under cl 4.6(4) that ERD has adequately addressed the matters required to be demonstrated by subcl (3) of the SLEP.

26. In forming this opinion of satisfaction, I give weight to the steps taken to achieve consistency with adjoining development on Victoria Street and Brougham Street, and the removal of exceedance towards Brougham Street that results from the stepped form.

Other jurisdictional preconditions in the SLEP

27. The DA complies with the maximum FSR permitted by cl 4.4 of the SLEP and an additional 29.8% of floor space when the area of affordable housing is considered under s 16 of the Housing SEPP.

28. While the site is not listed as a heritage item, it is located within the ‘Potts Point’ heritage conservation area (Potts Point HCA). The existing building is identified as detracting within the heritage conservation area. The site is also located in close proximity to a number of sites listed for their heritage significance, including:

1. No. 101 - 115 Victoria Street, that also has frontages to both Victoria Street and Brougham Street. Fronting Victoria Street, the development includes a number of detached and attached two to three-storey terraces, three of which are identified as local heritage items including I1176 'House group (113-115A Victoria Street) including interiors and front fencing', I1175 'Terrace house (111 Victoria Street) including interior and front fence' and I1174 'Terrace house (109 Victoria Street) including interior and front fence'.

2. No. 119 - 121 Victoria Street includes two three-storey local heritage listed terraces with subterranean floor areas, identified as heritage item I1178 'Terrace group including interiors and front fencing'.

3. To east of the site, across Victoria Street is a three-storey Federation Arts and Crafts style residential flat building that is listed as a local heritage item known as item I1177, 'Melton Flats'.

29. When the proposal is properly understood in its context, I accept the proposed development is sufficiently respectful of the materials, details and other aspects of built form evident in the Potts Point HCA to be acceptable when the effect of the proposed development on the Potts Point HCA and on heritage items in the vicinity of the site are considered, in accordance with cl 5.10 of the SLEP.

30. The site is located within a ‘Flood Planning Area’ on the relevant flood planning map. A Flood Risk Management Plan prepared by Telford Civil dated April 2025 concludes that the flood affect is minor, and that floor levels as shown on the architectural plans are in accordance with design requirements for flooding and freeboard. As such, the development provides refuge above the Probable Maximum Flood level and also provides onsite detention so that post development discharge will not adversely affect the environment or cause erosion, siltation or the like, pursuant to those matters at cl 5.21(2) of the SLEP.

31. The parties agree that the DA exhibits design excellence in terms set out at
    cl 6.12C of the SLEP, and that it also satisfies those provisions at cl 7.20(4) that are in similar terms. As such, the DA also satisfies the terms at cl 7.20(2) that would otherwise preclude the grant of consent, absent the preparation of a development control plan.

32. Furthermore, the experts agree it would be unreasonable or unnecessary to require a competitive design process under cl 6.21D of the SLEP.

33. While the agreement of the experts is unquestionably of assistance to the Court, for the reasons shown by Preston CJ in Toga Penrith Developments Pty Limited v Penrith City Council [2022] NSWLEC 117 (Toga), it is not sufficient for the Court to form an opinion as to whether the proposed development does or does not exhibit design excellence by having regard to the evidence of the urban design experts alone.

34. Instead, cl 6.12C of the SLEP prescribes a framework for deciding whether a development exhibits design excellence (Toga, at [70]) and the Court must have regard to the particular terms of, and answer the particular questions raised by, the matters in the design excellence provisions (Toga, at [75]).

35. I have considered those matters at cl 6.21C(2) of the SLEP, and I accept that the proposal achieves a high standard of architectural design, materials and detailing appropriate to the building type and location (cl 6.21C(2)(a) of the SLEP), on the basis of the written response prepared by Planning Ingenuity dated 13 May 2025 (Design Excellence Statement) that addresses issues of design excellence.

36. The Design Excellence Statement asserts that a high standard of architectural design, materials and detailing appropriate to the building type and location is achieved, in accordance with cl 6.21C(2)(a) of the SLEP because the public domain is improved by the balance between traditional and contemporary design elements and associated materiality along both Victoria Street and Brougham Streets. I understand this to be a reference to the presentation to Victoria Street that is sympathetic to heritage items in the vicinity of the site, while a more contemporary presentation to Brougham Street is appropriate to this streetscape.

29. As an aspect of the building’s location is its position within the Potts Point HCA, it is relevant to note the Design Excellence Statement considers the primary focus to be the Victoria Street streetscape where the parapet height an arched elements are said to complement the heritage characteristics of the area – a position supported in a Heritage Impact Statement authored by Urbis dated
    5 May 2025. Such matters are the subject of cl 6.21C(2)(d)(iii) that are also relevant to subcl(2)(d)(vi) in which street frontage heights are required to be considered.

30. The street frontage heights to both Victoria and Brougham Streets are said by the Design Excellence Statement to be directly aligned with those of neighbouring development so that a consistent streetscape is maintained, including those setbacks evident in the proposal.

31. As the site is also located in two localities identified at [12], the location referred to in [36] is also a reference to the Woolloomooloo locality and the Kings Cross locality in which the site is located, and so is a special character area cited at subcl (2)(d)(xi) of the SLEP to which aspects of the Statement of Environmental Effects are directed.

32. Finally in respect of the location in which the development is proposed, the Design Excellence Statement asserts that a residential flat building is permitted in the zone, and proposes seven affordable housing units, assured for a period of 15 years. As such, the development is suited to the land on which development is proposed (subcl (2)(d)(i)).

33. Next the Design Excellence Statement asserts the form and external appearance of the proposed development improves the quality and amenity of the public domain (subcl (2)(b)) because of consistency in the parapet height with adjoining development and by virtue of the setbacks to side boundaries and to Brougham Street as the development increases in height that results in an appropriate bulk, massing and modulation of the built form (subcl (2)(d)(v))

34. A high quality interface with the ground level on Victoria Street and Brougham Street is said to result from the proposal, in which a single vehicular access is proposed with a zero setback and landscaped area to the frontage in keeping with adjoining development (subcl (2)(d)(x) and (xii)).

35. Around 120m² of deep soil landscaping, and 244.2m² of soft landscaping is proposed that also proposes total tree canopy on the site of 21% of the site to satisfy the SDCP, which the Design Excellence Statement asserts is evidence of excellence in integrating landscape design (subcl (2)(d)(xiii)).

36. A View Loss Analysis prepared by Urbaine supports the proposal, and which demonstrates that view corridors will not be adversely impacted by the proposal (subcl (2)(c)), and will only impact neighbouring properties to an extent assessed as minor.

37. The environmental impact of the proposal is likewise minor when the overshadowing and privacy impacts are understood, and the achievement of ecologically sustainable development is quantified by the terms of the BASIX certificate prepared by ESD Synergy dated 13 August 2025. The parties agree that visual privacy is acceptable on the provision of privacy screens, the subject of Condition 24(b) of the agreed conditions of consent. As such, the Design Excellence Statement asserts that subcl (2)(d)(vii) and (viii) are also achieved.

38. On careful analysis of the development application and the supporting information contained in the Design Excellence Statement, and the independent review complete by Kennedy Associates dated 14 May 2025 that also addresses design excellence (p 6), I am satisfied that the proposed development exhibits design excellence in terms set out at cl 6.21C of the SLEP.

39. The parties agree that provision of 23 car parking spaces complies with the requirement at cl 7.3 of the SLEP and so does not exceed the maximum set out in Div 1 of the SLEP.

40. While the site is identified on the relevant map at cl 7.14(2) of the SLEP, within an area marked Class 5 Acid Sulfate Soils (ASS), and to be within 70m of another class of ASS, the relevant experts agree that the proposed development will not access ASS given the elevation of the site above the level likely to encounter such soils.

41. The proposal is for the comprehensive redevelopment of the site in accordance with the consent in respect of which agreement has been reached. As such, the parties agree that adequate measures have been taken to mitigate any adverse visual impacts that may arise as a result of demolition, in accordance with
    cl 7.19 of the SLEP.

State Environmental Planning Policy (Housing) 2021

50. The parties agree that the proposed development adequately satisfies the matters for consideration set out in the Housing SEPP and the Guidelines for Retention of Existing Affordable Rental Housing 2009 (the Guidelines).

51. In particular, the proposal will not result in the unacceptable loss of affordable rental housing in the local government area (LGA) for two primary reasons:

1. Firstly, as the development proposes seven affordable housing units to be dedicated for a period of 15 years.

2. Secondly, on the basis of contributions in respect of affordable housing.

52. For the purposes of affordable housing, s 13 of the Housing SEPP defines a household eligible for affordable housing in the following terms:

13 Affordable housing—the Act, s 1.4(1)

(1)  In this Policy, a household is taken to be a very low income household, low income household or moderate income household if—

(a)  the household—

(i)  has a gross income within the following ranges of percentages of the median household income for Greater Sydney or the Rest of NSW—

(A)  very low income household—less than 50%,

(B)  low income household—50–less than 80%,

(C)  moderate income household—80–120%, and

(ii)  pays no more than 30% of the gross income in rent, or

(b)  the household—

(i)  is eligible to occupy rental accommodation under the National Rental Affordability Scheme, and

(ii)  pays no more rent than the rent that would be charged if the household were to occupy rental accommodation under the Scheme.

53. Reference at s 13 of the Housing SEPP to s 1.4 of the EPA Act is reference to the definition as follows:

affordable housing means housing for very low income households, low income households or moderate income households, being such households as are prescribed by the regulations or as are provided for in an environmental planning instrument.

54. Section 14 of the Housing SEPP identifies there to be a need for affordable housing within each area of the State, and so the power for a consent authority, or the Court in appeal, to impose a condition of a kind in s 7.32 of the EPA Act is enlivened.

55. The provisions at s 7.32 of the EPA Act are in the following terms:

7.32   Conditions requiring land or contributions for affordable housing

(cf previous s 94F)

(1)  This section applies in relation to a development application for consent to carry out development within an area if a State environmental planning policy identifies that there is a need for affordable housing within the area.

(2)  Subject to subsection (3), the consent authority may grant consent to a development application to which this section applies subject to a condition requiring—

(a)  the dedication of part of the land, or other land of the applicant, free of cost to be used for the purpose of providing affordable housing, or

(b)  the payment of a monetary contribution to be used for the purpose of providing affordable housing,

or both.

(3)  A condition may be imposed under this section only if—

(a)  the condition complies with all relevant requirements made by a State environmental planning policy with respect to the imposition of conditions under this section, and

(b)  the condition is authorised to be imposed by an environmental planning instrument, and is in accordance with a scheme for dedications or contributions set out in or adopted by such an instrument, and

(c)  the condition requires a reasonable dedication or contribution, having regard to any other dedication or contribution required to be made by the applicant under this section or section 7.11.

(4)  A consent authority that proposes to impose a condition in accordance with this section must take into consideration any land or other sum of money that the applicant has previously dedicated free of cost, or previously paid, for the purpose of affordable housing within the area otherwise than as a condition of a consent.

(5)  Nothing in this section prevents the imposition on a development consent of other conditions relating to the provision, maintenance or retention of affordable housing. Such conditions may require, but are not restricted to, the imposition of covenants (including positive covenants) or the entering into of contractual or other arrangements.

56. However, before deciding to impose a condition of a kind permitted by s 7.32 of the EPA Act, the consent authority or Court in this instance, must consider those matters at s 15 of the Housing SEPP

15 Requirement for imposition of conditions—the Act, s 7.32(3)(a)

Before imposing a condition under the Act, section 7.32, the consent authority must consider the following—

(a)  affordable housing must aim to create mixed and balanced communities,

(b)  affordable housing must be created and managed so that a socially diverse residential population, representative of all income groups, is developed and maintained in a locality,

(c)  affordable housing must be made available to very low, low and moderate income households, or a combination of the households,

(d)  affordable housing must be rented to appropriately qualified tenants and at an appropriate rate of gross household income,

(e)  land provided for affordable housing must be used for the purposes of the provision of affordable housing,

(f)  buildings provided for affordable housing must be managed to maintain their continued use for affordable housing,

(g)  affordable housing must consist of dwellings constructed to a standard that, in the opinion of the consent authority, is consistent with other dwellings in the area.

57. The proposal is for development comprising a mix of one, two and three bedroom apartments, is consistent with development of a mixed and balanced community (s 15(a)), and seven apartments will be managed by a registered housing provider so that a socially diverse residential population, representative of all income groups, is maintained (s 15(b)) that includes very low, low and moderate income households, or a combination of the households (s 15(c)) that are appropriately qualified tenants (s 15(d)) for a period of 15 years (s 15(e) and (f)) of a standard that is consistent with the requirements of the Apartment Design Guide (s 15(g)).

58. The parties agree that the non-discretionary standards at s 19 of the Housing SEPP are achieved.

59. For the reasons at [36]-[43], the parties agree the design of the residential development is compatible with the desirable elements of the character of the local area, in accordance with s 20 of the Housing SEPP.

60. A letter prepared by Bridge Housing, a registered housing provider, dated
    6 August 2025 supports the proposal and confirms its intention to manage the seven affordable housing units, comprising 5 x one-bedroom and 1 x two-bedroom apartments, for a period of 15 years in accordance with the requirements of s 21 of the Housing SEPP. The intention is reflected in the terms of Condition 104 agreed between the parties, that requires a restriction to be registered against the title of the site on which Development is to be carried out, in accordance with s 88E of the Conveyancing Act 1919 (NSW).

61. The existing building on the site is in single ownership and comprises 45 units including 10 studio apartments, 34 one-bedroom apartments and one two bedroom apartment. It is commonly held that 44 of the units may be classified as ‘low rental dwellings’.

62. A low-rental dwelling is defined at Pt 3, s 45 of the Housing SEPP as a dwelling that was let at a rental level no greater than the median rental level during the relevant period in relation to a dwelling of the same type, and with the same number of bedrooms, and in the same local government area.

63. The proposal is for 18 new strata titled units and seven affordable dwellings for a period of 15 years.

64. The parties agree that the rental vacancy rate for the inner Sydney area for the three-month period preceding lodgement of the subject application (being June to August 2023) was less than 3%, which indicates that there is insufficient comparable accommodation to mitigate the proposed loss of affordable rental housing, pursuant to s 47(2)(b) of the Housing SEPP.

65. However, the parties also agree that when the Guidelines are considered, and those matters to be considered at s 47(2) of the Housing SEPP are considered, the following documents are sufficient to mitigate the loss of affordable housing:

1. Planning response to Request for Further Information Affordable Rental Housing, prepared by Planning Ingenuity dated 16 August 2024, including Annexures.

2. Social Impact Assessment prepared by Sarah George Consulting dated April 2025

3. Amended Affordable Rental Housing Analysis prepared by Planning Ingenuity dated 8 May 2025

4. Amended Housing SEPP Economic Assessment prepared by Hadron Group (undated)

5. Costs Estimate prepared by WT dated 5 February 2025

6. Adequate Arrangements response to cl 47(2)(d) of the SEPP Housing prepared by Planning Ingenuity dated 14 April 2025

7. Rental Appraisal Letter prepared by IB Property dated 25 February 2025

8. Updated Cost Estimate Report WT Partners dated 7 August 2025

9. Joint conferencing of experts in the discipline of fire and structural engineering on the degree of structural soundness and the scope of work required to inform the estimate of costs to effect compliance.

66. It is also relevant to note that the parties agree on the terms of conditions of consent that includes:

1. Firstly, a condition that defers the operation of any development consent for a period of five years unless and until satisfactory evidence of adequate arrangements to assist existing residents to find comparable accommodation has been provided to the Council.

2. Secondly, an affordable housing contribution calculated in accordance with the City of Sydney Affordable Housing Program

3. Thirdly, a monetary contribution for the purpose of mitigating the loss of affordable housing as a result of the approved development, in accordance with s 48(2) of the Housing SEPP and s 7.32 of the EPA Act prior to any Construction Certificate being issued.

67. Where an application relates to residential apartment development, s 29 of the EPA Regulation requires the application be accompanied by a statement by a qualified designer, defined in the Dictionary at Sch 7 of the EPA Regulation as a person registered as an architect in accordance with the Architects Act 2003 (NSW).

68. The statement is required by s 29 of the EPA Regulation to verify matters that are relevant to those matters that must be taken into consideration when determining a development application for residential apartment development, at s 147 of the Housing SEPP.

69. The Court has a statement signed by Mr Koichi Takada (Arch Reg No. 6901) dated 5 August 2025 that conforms, and so assists the Court in its task to take into consideration those matters at ss 147 and 148 of the Housing SEPP.

70. On the basis of the agreement between the parties, and my own opinion of satisfaction, at [31]-[46] that the proposed development exhibits design excellence, and the statement prepared by Mr Takada, I accept that the proposal is compatible with the desirable elements of the character of the local area, in accordance with s 20 of the Housing SEPP.

State Environmental Planning Policy (Biodiversity and Conservation) 2021.

71. On the basis of the Stormwater Quality Report prepared by Telford Civil dated May 2025, I am satisfied that the development includes measures that positively affect the quality of water entering Sydney Harbour so that stormwater discharged from the site will be as close as possible to neutral or beneficial, and secondly, that the impact on water flow in a natural waterbody will be minimised, being an opinion of satisfaction required by s 6.6 of the State Environmental Planning Policy (Biodiversity and Conservation) 2021 (Biodiversity SEPP). In particular, I note filtration devices are proposed within the onsite detention (OSD) chamber and that MUSIC modelling concludes a reduction in flow (L/s), total suspended solids, phosphorous, nitrogen and gross pollutants results.

72. For similar reasons I have also considered those matters at ss 6.7 and 6.8 of the Biodiversity SEPP and am satisfied, there will be no direct, indirect or cumulative impact on terrestrial, aquatic or migratory animals or vegetation to a minimum, and no adverse impact on aquatic reserves, or in terms of erosion, or flooding.

73. Neither will the proposed development have an impact on recreational land uses or access to public land, in terms set out in s 6.9 of the Biodiversity SEPP.

State Environmental Planning Policy (Resilience and Hazards) 2021

74. I am assisted in considering whether the land is contaminated in accordance with s 4.6 of the State Environmental Planning Policy (Resilience and Hazards) 2021 by the expert evidence of Mr Rod Harwood, on behalf of the Council, and Mr Ben Agar on behalf of ERD who conferred in the preparation of a joint exert report on the subject dated 17 July 2025, and supplementary joint report dated 15 August 2025.

75. The experts have had regard to four documents prepared on behalf of ERD, and all authored by EI Australia:

1. Geotechnical Investigation dated 30 April 2025

2. Preliminary Site Investigation dated 11 April 2025

3. Detailed Site Investigation dated 14 August 2025

4. Hydrogeological Report including dewatering Management Plan dated 30 August 2024

76. Additionally, the parties agree that a Detailed Site Investigation prepared by EI Australia dated 14 August 2025 concludes the site is suitable for the proposed development, subject to agreed conditions of consent that include Condition 73 in respect of hazardous waste materials.

77. On the basis of the above, I am satisfied the site is suitable for the development that is proposed to be carried out on the site.

State Environmental Planning Policy (Sustainable Buildings) 2022.

78. The application is accompanied by a BASIX certificate for 91 apartment dwellings (Cert No. 1808326M dated 13 August 2025) prepared by ESD Synergy Pty Ltd in accordance with State Environmental Planning Policy (Sustainable Buildings) 2022 (Sustainable Buildings SEPP).

79. I also note that embodied emissions are quantified in the BASIX Certificate, such that the Court can be satisfied that the embodied emissions attributable to the proposed development have been quantified in accordance with s 2.1(5) of the Sustainable Buildings SEPP.

Public submissions

80. I note the public submissions have been considered by the parties. The Council’s reasons at [83(4)(h)] include a conclusion that the amended proposal will not cause unacceptable adverse impacts on the amenity of surrounding residential properties.

Conclusion

81. As the parties’ decision is a decision that the Court could have made in the proper exercise of its functions, I am required under s 34(3) of the LEC Act to dispose of the proceedings in accordance with the parties’ decision.

82. In making the orders to give effect to the agreement between the parties, I was not required to, and have not, made any merit assessment of the issues that were originally in dispute between the parties.

83. The Court notes that:

1. The City of Sydney Council, as the relevant consent authority, has approved, under clause 38(1) of the EPA Regulation, the Applicant's amendment to Development Application No. DA/2024/524 to include the Amended Architectural Plans listed in Annexure A.

2. ERD filed the plans contained in Annexure A with the Court on 21 August 2025.

1. ERD and the Council agree that the amount of the Respondent's costs thrown away as a result of all amendments and costs orders made in these proceedings and proceedings No. 2024/377058 are $17,000 to be paid within 28 days of the date of these orders.

2. The Council’s reasons for agreement to the terms of the decision, are as follows:

1. The development is permissible with consent in the R1 - General Residential zone and is consistent with the objectives of the zone;

2. The amended proposal complies with the floor space ratio development standard applicable to the site in accordance with
   cl 4.4 of the SLEP and Ch 2, Pt 2, Div 2 of the Housing SEPP;

3. The non-compliance with the height of buildings development standard under cl 4.3 of the SLEP and Ch 2, Pt 2, Div 2 of the Housing SEPP is supported by a written request that has adequately addressed the matters required to be demonstrated by cl 4.6(3) of the SLEP;

4. The amended proposal satisfies the design excellence considerations under Clause 6.21C of the SLEP;

5. The proposal has been amended to comply with the maximum car parking rates specified in cl 7.5(1)(b) of the SLEP;

6. The amended proposal responds appropriately to the scale of surrounding buildings and is an appropriate in-fill building in the Potts Point HCA;

7. Subject to the recommended conditions, the proposed development is considered to adequately address the Retention of existing affordable rental housing provisions contained in Ch 2, Pt 3 of the Housing SEPP;

8. The amended proposal will not cause unacceptable adverse impacts on the amenity of surrounding residential properties.

Orders

84. The Court orders that:

1. The Applicant is granted leave to amend Development Application D/2024/524 to include the documents set out in Annexure A.

2. The appeal is upheld.

3. Development Application D/2024/524, as amended, for demolition of the existing building and associated structures and construction of a new part-four storey and part-eight storey residential flat building comprising 25 apartments, three levels of basement for car parking, servicing and storage and a rooftop communal open space at
   117 Victoria Street, Potts Point is determined by the grant of consent subject to the conditions at Annexure B.

T Horton

Commissioner of the Court

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Annexure A (17.2 KB, pdf)

Annexure B (380 KB, pdf)

Decision last updated: 09 September 2025