Fluffy Investments Pty Ltd v Council of the City of Sydney

[2025] NSWLEC 1409

Land and Environment Court

New South Wales

Medium Neutral Citation:

Fluffy Investments Pty Ltd v Council of the City of Sydney [2025] NSWLEC 1409

Hearing dates:

Conciliation conference on 24 April 2025

Date of orders:

10 June 2025

Decision date:

10 June 2025

Jurisdiction:

Class 1

Before:

Washington C

Decision:

The Court orders:

(1) Pursuant to s 8.15(3) of the Environmental Planning and Assessment Act 1979, the applicant is to pay the respondent’s costs thrown away as a result of the amendment of the Development Application in the agreed amount of $6,500, within 28 days of the date of these orders.

(2) The applicant’s written request pursuant to clause 4.6 of the Sydney Local Environmental Plan 2012 seeking a variation to the development standard for building height set out in clause 4.3 of the Sydney Local Environmental Plan 2012 is upheld.

(3) The Applicant’s written request pursuant to clause 4.6 of the Sydney Local Environmental Plan 2012 seeking a variation to the development standard for minimum lot size set out in s 69(1)(b) of the State Environmental Planning Policy (Housing) 2021 is upheld.

(4) The Appeal is upheld

(5) Development Application No. D/2024/568 for the demolition of the existing building and the construction of a five-storey co-living development at Lot 8 in DP10682, being 23 Hughes Street, Potts Point is determined by the grant of consent subject to the conditions set out in Annexure ‘A’ to this agreement.

Catchwords:

DEVELOPMENT APPLICATION — co-living development — conciliation conference — agreement between the parties — orders

Legislation Cited:

Environmental Planning and Assessment Act1979, ss 4.16, 8.7

Land and Environment Court Act 1979, s 34

Environmental Planning and Assessment Regulation 2021, s 38

State Environmental Planning Policy (Biodiversity and Conservation) 2021, Ch 6, ss 6.6, 6.7, 6.8, 6.9, 6.10

State Environmental Planning Policy (Housing) 2021, Ch 3, Pt 3, ss 67, 68, 69,

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

Sydney Local Environmental Plan 2012, cll 4.3, 4.6, 5.10, 6.21C

Category:

Principal judgment

Parties:

Fluffy Investments Pty Ltd (Applicant)
Council of the City of Sydney (Respondent)

Representation:

Counsel:
G McKee (Solicitor) (Applicant)
G Garrett (Solicitor) (Respondent)

Solicitors:
McKees Legal Solutions (Applicant)
Council of the City of Sydney (Respondent)

File Number(s):

2024/391676

Publication restriction:

No

Judgment

1. COMMISSIONER: These Class 1 proceedings arise as a result of the deemed refusal, by the Council of the City of Sydney, of Development Application D/2024/568 which seeks consent for the demolition of the existing building and construction of a 5-storey co-living development on the site at 23 Hughes Street, Potts Point, Lot 8 DP 10682.

2. These proceedings have been brought to the Court pursuant to s 8.7 of the Environmental Planning and Assessment Act1979 (EPA Act).

3. The Court arranged a conciliation conference under s 34(1) of the Land and Environment Court Act 1979 (LEC Act) between the parties, which was held on 24 April 2025. I presided over the conciliation conference.

4. After the conciliation conference, the parties reached agreement as to acceptable terms of a decision in the proceedings. This decision involved the Court upholding the appeal and granting development consent to the development application subject to conditions.

5. As part of this agreement, pursuant to s 38 of the Environmental Planning and Assessment Regulation 2021 (EPA Regulation), the Council agreed to the applicant amending the development application to adequately address the Council’s contentions.

6. Under s 34(3) of the LEC Act, I must dispose of the proceedings in accordance with the parties’ decision if that decision is one 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, which the parties identified and explained to the Court. From this I note the following points.

Jurisdictional matters

7. The development application was made with the written consent of the owner of the land.

8. The application was adequately notified from 29 July to 27 August 2024. 33 submissions were received in that time, and 6 residents made oral submissions at the commencement of proceedings. Based on the amended application, the parties submit, and I accept, that the development as amended adequately responds to the concerns raised in these submissions.

9. Section 4.6 of the State Environmental Planning Policy (Resilience and Hazards) 2021 requires the consent authority to consider whether the site is contaminated, and if so, whether it is or will be made suitable for the intended use. From the information contained in the Preliminary Site Investigation, Detailed Site Investigation and Remediation Action Plan, all prepared by JK Environments and dated 20 June 2024 the parties submit, and I accept, that subject to the agreed conditions of consent, the site can be made suitable for the proposed development.

10. The site is located within the designated hydrological catchment of Sydney Harbour. From the parties’ submission, the Statement of Environmental Effects by The Planning Studio dated 8 July 2024 (SEE) and the amended stormwater plans, I accept that the requirements of Ch 6 of the State Environmental Planning Policy (Biodiversity and Conservation) 2021 (SEPP B&C) relating to water quality and quantity (s 6.6), aquatic ecology (s 6.7), and flooding (s 6.8) are met with the proposed development. I further accept that the proposed development does not affect public access to and from natural waterbodies (s 6.9), is not likely to have any adverse environmental impact on any adjacent local government areas (s 6.10).

11. Chapter 3 Pt 3 of the State Environmental Planning Policy (Housing) 2021 (Housing SEPP) provides for co-living housing. Pursuant to s 67 of the Housing SEPP, as the subject site is zoned R1 General Residential under the Sydney Local Environmental Plan 2012 (SLEP), and residential flat buildings are permitted within this zone, development for the purposes of co-living is permissible with consent. The proposed development is consistent with the objectives of this zone.

12. Pursuant to the non-discretionary development standards listed in s 68 of the Housing SEPP, from the parties’ submission, the SEE and the amended application I accept that:

1. The floor space ratio (FSR) of the proposed development is 2.75:1, which meets the maximum permissible floor space plus 10% as per s 68(2)(a).

2. The development contains more than 6 private rooms, and so s 68(2)(b) does not apply.

3. The proposed development provides 77.39m² of internal communal living spaces with a minimum dimension of 3m, meeting the requirements of s 68(2)(c).

4. 69.73m² of communal open space is provided, which exceeds the required quantity of 57.4m² under s 68(2)(d).

5. The development does not include car parking, which is consistent with the requirements of the SLEP and therefore with the requirements of s 68(2)(e).

13. Pursuant to the development standards for co-living housing under s 69 of the Housing SEPP, again from the parties’ submission, the SEE and the amended application, I accept that:

1. The proposed room sizes are not more than 25m² and not less than 16m², in accordance with the requirements of s 69(1)(a).

2. The proposed development does not meet the minimum lot size requirement at s 69(1)(b), however this is acceptable through a cl 4.6 request which is discussed further below.

3. The development contains a manager’s workspace on the ground floor adjacent to the internal communal space (s 69(1)(d)).

4. Adequate bathroom, laundry and kitchen facilities will be available for the use of each occupant (s 69(1)(f)).

5. The co-living is designed as 21 double-occupancy rooms (s 69(1)(g)).

6. The provided bicycle lockers – and lack of motorcycle spaces – meets the requirements of the SLEP and are therefore adequate (s 69(1)(h)).

7. The matters pertaining to separation distances, solar access and building design listed in s 69(2) have been considered, and the proposed development is acceptable.

14. As stated above, the lot size for the proposed development is less than the 800m² minimum lot size requirement set out in s 69(1)(b) of the Housing SEPP. The subject site is 287m² in area, representing a variation of 64.12%.

15. As a result of this breach of the minimum lot size requirement, cl 4.6(3) of the SLEP allows the applicants to request a contravention of this development standard through the submission of a written request. This document must demonstrate that compliance with the minimum lot size development standard is unreasonable or unnecessary in the circumstances of the case, and that there are sufficient environmental planning grounds to justify the contravention. To that end, the applicants have submitted a request prepared by The Planning Studio dated 8 May 2025 (the Lot Size cl 4.6 request). Pursuant to SLEP cl 4.6, I am satisfied that:

1. The Lot Size cl 4.6 request demonstrates that compliance with the minimum lot size standard is unreasonable and unnecessary because the proposal complies with the relevant objectives of the R1 General Residential Zone notwithstanding the non-compliance. There are no objectives of the development standard. Further, the non-compliance does not result in any adverse impacts on the amenity of adjoining properties.

2. The Lot Size cl 4.6 request establishes sufficient environmental planning grounds to justify contravening the development standard by demonstrating that:

1. The non-compliance will not result in any adverse environmental planning impacts to the amenity of neighbouring sites, including no loss of significant or iconic views, and no additional unacceptable impacts in terms of privacy, traffic, acoustics, or overshadowing.

2. The applicant demonstrates that the application does not represent overdevelopment of the site.

3. The minimum lot size standard is not reflected in the SLEP. This, combined with the proposal’s compliance with key density and amenity controls, demonstrates that the development is of a scale and size that is in keeping with its context.

16. Pursuant to SLEP cl 4.3, a maximum building height of 15m applies to the subject site. The proposed development exceeds this development standard with a maximum height of 16.15m. Again, as a result of the breach of this development standard, a second request has been submitted pursuant to SLEP cl 4.6(3) to vary the height of building standard (the Height of Building cl 4.6 request). Pursuant to SLEP cl 4.6, I am satisfied that:

1. The Height of Building cl 4.6 request demonstrates that compliance with the height of building standard is unreasonable and unnecessary because the proposal complies with the relevant objectives of the R1 General Residential Zone and the development standard notwithstanding the non-compliance. Further, the non-compliance does not result in any adverse impacts on the amenity of adjoining properties.

2. The Height of Building cl 4.6 request establishes sufficient environmental planning grounds to justify contravening the development standard by demonstrating that:

1. The non-compliance will not result in any adverse environmental planning impacts to the amenity of neighbouring sites, including no loss of significant or iconic views, and no additional unacceptable impacts in terms of privacy, traffic, acoustics, or overshadowing.

2. The variation to the control is largely the result of rooftop plant and its acoustic screening, which has been centrally positioned on the roof to minimise the impact. Subsequently, the variation will be imperceptible form the public domain and adjacent private property.

17. The site is not identified as a heritage item; however it is located adjacent to a heritage item to the rear at 28-30 Orwell Street, and is identified as a contributory building within the Potts Point Heritage Conservation Area (HCA). From the parties’ submission and the Heritage Impact Statement by Paul Davies Pty Ltd dated 20 June 2024, I accept that the impact of the demolition of the contributory building, and construction of the proposed development will have an acceptable impact on the HCA and adjacent heritage item, pursuant to SLEP cl 5.10.

18. SLEP cl 6.21C Design Excellence applies to the application. Under this clause, the consent authority must be satisfied that the proposed development exhibits design excellence through consideration of the matters listed at cl 6.21C(2). From the parties’ submission and the amended application, I accept that, when considered against cl 6.21C(2) the proposed development exhibits design excellence.

Conclusion

19. For these reasons, I am satisfied that the parties’ decision is one that the Court could have made in the proper exercise of its functions, as required by s 34(3) of the LEC Act.

20. 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.

21. The Court notes:

1. The respondent has agreed, pursuant to section 38(1) of the Environmental Planning and Assessment Regulation 2021, to the applicant amending Development Application D/2024/568 in accordance with the plans and documents listed below:

Ref/ Dwg No	Rev	Title/Description	Dated	Prepared by
Architectural Plans
000	I	Cover Page	23.05.2025	Embece Architects
001	D	Materiality and Photomontage	08.05.2025
005	C	Existing Site Plan	08.05.2025
006	C	Site Analysis Plan	08.05.2025
007	C	Proposed Site Plan	08.05.2025
010	C	Existing Plan	08.05.2025
020	C	Existing North Elevation	08.05.2025
021	C	Existing West Elevation	08.05.2025
022	C	Existing South Elevation	08.05.2025
050	C	Demolition Plan	08.05.2025
090	J	Proposed B01	08.05.2025
100	K	Proposed L00	23.05.2025
101	J	Proposed Typical L01-03	23.05.2025
104	J	Proposed L04	23.05.2025
105	I	Proposed L05	08.05.2025
200	L	Proposed North Elevation	23.05.2025
201	I	Proposed West Elevation	08.05.2025
202	J	Proposed South Elevation	23.05.2025
203	B	Proposed East Elevation	08.05.2025
300	D	Cross Sections	08.05.2025
301	J	Long Sections	23.05.2025
600	I	GFA Schedule and Deep Soil	23.05.2025
601	G	Common Living and Open Space Areas L00	08.05.2025
602	F	Common Living and Open Space Areas L04	08.05.2025
603	B	Total Floor Area Plans	23.05.2025
800	D	Shadow Diagrams Proposed 9am & 10am	08.05.2025
801	E	Shadow Diagrams Proposed 11am & 12pm	23.05.2025
802	D	Shadow Diagrams Proposed 1pm & 2pm	08.05.2025
803	E	Shadow Diagrams Proposed 3pm	23.05.2025
804	D	Elevational Shadow Diagrams West	08.05.2025
805	D	Elevational Shadow Diagrams West	08.05.2025
806	D	Elevational Shadow Diagrams East	08.05.2025
807	D	Elevational Shadow Diagrams Hughes Pl	08.05.2025
808	E	Elevational Shadow Diagrams Hughes Pl	23.05.2025
809	D	Elevational Shadow Diagrams Hughes Pl	08.05.2025
810	D	Elevational Shadow Diagrams Hughes Pl	08.05.2025
850	E	LEP Height Plane Diagram	08.05.2025
851	F	Direct Solar Access Analysis	23.05.2025
852	D	View from the sun – Winter Solstice 9am-3pm	08.05.2025
853	-	View loss – From 25 Hughes St	08.05.2025
890	A	Notification Plans	08.05.2025
901	E	Typical Room Layout	23.05.2025
910	B	Roof Detail	08.05.2025
Landscape Plans
S34-01	C	Landscape s34 Notes	07.05.2025	HTS Landscape Architecture
S34-02	C	Landscape s34 Plan – Level 00
S34-03	C	Landscape s34 Plan – Level 04
S34-04	C	Landscape s34 Plan – Level 05
S34-05	C	Landscape Plant Palette & Schedule
S34-06	C	Landscape Calculations
Civil Plans
C1.00	F	Cover Sheet	08.05.2025	Triaxial Consulting
C1.01	F	General Notes
C2.00	F	Existing Site Plan
C2.01	F	Sediment and Erosion Control Plan
C2.02	F	Sediment and Erosion Control Details
C3.00	F	Stormwater Management Plan – Basement Level
C3.01	F	Stormwater Management Plan – Ground Floor
C4.00	F	Public Domain Plan

Document Name		Rev	Date	Prepared By
Geotechnical Investigation		4	26 May 2025	JK Geotechnics Pty Ltd
Structural Design Statement		26 May 2025	Dunnings Consulting Engineers
NCC 2022 Section J Assessment		3	13 May 2025	Aspire Sustainability Consulting Pty Ltd
Visual Impact Assessment		8 May 2025	The Planning Studio
Updated Clause 4.6 Variation Request – Building Height		3	8 May 2025	The Planning Studio
Updated Clause 4.6 Variation Request to Minimum Lot Size SEPP (Housing) 2021		3	8 May 2025	The Planning Studio
Plan of Management		3	8 May 2025	The Planning Studio
Acoustic Assessment for Development Application		3	8 May 2025	Renzo Tonin & Associates
Construction & Demolition Waste Management Plan		D	27 March 2025	Elephants Foot Consulting Pty Ltd
Operational Waste Management Plan		H	27 March 2025	Elephants Foot Consulting Pty Ltd

22. The Court orders:

1. Pursuant to s 8.15(3) of the Environmental Planning and Assessment Act 1979, the applicant is to pay the respondent’s costs thrown away as a result of the amendment of the Development Application in the agreed amount of $6,500, within 28 days of the date of these orders.

2. The applicant’s written request pursuant to clause 4.6 of the Sydney Local Environmental Plan 2012 seeking a variation to the development standard for building height set out in clause 4.3 of the Sydney Local Environmental Plan 2012 is upheld.

3. The Applicant’s written request pursuant to clause 4.6 of the Sydney Local Environmental Plan 2012 seeking a variation to the development standard for minimum lot size set out in s 69(1)(b) of the State Environmental Planning Policy (Housing) 2021 is upheld.

4. The Appeal is upheld.

5. Development Application No. D/2024/568 for the demolition of the existing building and the construction of a five-storey co-living development at Lot 8 in DP10682, being 23 Hughes Street, Potts Point is determined by the grant of consent subject to the conditions set out in Annexure ‘A’ to this agreement.

E Washington

Commissioner of the Court

**********

Annexure A (402 KB, pdf)

Decision last updated: 10 June 2025