Jetz Luxury Homes Pty Ltd v Inner West Council

[2020] NSWLEC 1446

Land and Environment Court

New South Wales

Medium Neutral Citation:

Jetz Luxury Homes Pty Ltd v Inner West Council [2020] NSWLEC 1446

Hearing dates:

21 August 2020

Date of orders:

24 September 2020

Decision date:

24 September 2020

Jurisdiction:

Class 1

Before:

Espinosa C

Decision:

The Court orders that:

(1) The appeal is dismissed.

(2) The development application number D/2019/128 seeking development approval to change the use of an existing commercial unit to a serviced apartment at unit 3/283 Parramatta Road, Leichhardt and legally described at Lot 3 SP89564 is refused.

(3) Exhibits are returned to the parties.

Catchwords:

DEVELOPMENT APPEAL – change of use from commercial to serviced apartment – flood planning – objectives of B2 Local Centre zone – owner’s consent – public interest – orders

Legislation Cited:

Environmental Planning and Assessment Act 1979

Environmental Planning and Assessment Regulation 2000

Land and Environment Court Act 1979

Leichhardt Local Environmental Plan 2013

Cases Cited:

Al Maha Pty Ltd v Huajun Investments Pty Ltd (2018) 233 LGERA 170; [2018] NSWCA 245

Kavanagh v Hawkesbury City Council [2020] NSWLEC 1003

Michael Brown Planning Strategies Pty Ltd v Wingecarribee Shire Council [2020] NSWCA 137

Owners Strata Plan No 50411 v Cameron North Sydney Pty Ltd [2003] NSWCA 5

Platford v van Veenendaal (2018) 229 LGERA 101; [2018] NSWLEC 27

Season Group Pty Ltd v Council of the City of Sydney [2016] NSWLEC 1354

Texts Cited:

Leichhardt Development Control Plan 2013

Category:

Principal judgment

Parties:

Jetz Luxury Homes Pty Ltd (Applicant)
Inner West Council (Respondent)

Representation:

Counsel:
G Long (Solicitor) (Applicant)
M Cottam (Solicitor) (Respondent)

Solicitors:
Long Legal Pty Ltd (Applicant)
Pikes & Verekers Law (Respondent)

File Number(s):

2019/187415

Publication restriction:

No

Judgment

1. COMMISSIONER:    This is Class 1 - Development Appeal pursuant to s 8.7 of the Environmental Planning and Assessment Act1979 (EPA Act) being an appeal against the deemed refusal of a development application number D/2019/128 seeking development approval to change the use of an existing commercial unit to a serviced apartment (the Proposed Development) at unit 3/283 Parramatta Road, Leichhardt, legally described as Lot 3 in SP89564 (the Site).

2. Following a site inspection, and at the commencement of the hearing, the parties agreed that the issues remaining in dispute for the Court’s assessment and determination were the following issues:

1. Consistency of the Proposed Development with the objectives of the B2 Local Centre Zone listed in the Land Use Table of the Leichhardt Local Environmental Plan 2013 (LLEP).

2. Whether the Court can be satisfied that flood planning is adequately addressed by the Proposed Development as required by cl 6.3 of the LLEP. The Applicant identifies this as the ‘critical issue’ and the Respondent similarly submits that this is the ‘key issue’.

3. Owner’s consent to the Proposed Development and in particular whether the Proposed Development seeks development approval for any development not wholly contained within the strata unit. The Respondent argues that any works within the common property will require owner’s consent from the Body Corporate whereas the Applicant relies on s 4.17(1)(f) of the EPA Act regarding the power of the Court to impose conditions on other land.

4. Whether the change of use from commercial premises to a serviced apartment in this B2 Local Centre zone is in the public interest, that is, if replicated on other ground floor areas of the local centre, it will have a significant impact on the local economy and local employment.

3. The Court has the benefit of the following Joint Expert Reports:

1. Sean Howie, Development Engineer for the Respondent and Anthony Barthelmess, Managing Director of Rienco Consulting for the Applicant (the Hydraulic Engineers) met on 15 June 2020 and prepared a Joint Expert Report filed 19 June 2020 (Exhibit 2) (Flood Expert Report).

2. Eric Wong, Planner for the Respondent and Andrew Minto, Planner for the Applicant (the Planners) met on 27 and 28 July 2020 and prepared a Joint Expert Report filed 28 July 2020 (Exhibit 3) (Planning Expert Report).

4. Only the Hydraulic Engineers were cross examined during the proceedings and the parties made oral submissions.

5. I note that some of the issues listed at par [2] are related to matters of the Court’s jurisdiction to grant the consent sought and directly impacts the power and function of the Court pursuant to s 4.16 of the EPA Act whereas other issues are part of the merit assessment pursuant to s 4.15 of the EPA Act.

Is the proposed development consistent with the objectives of the B2 Local Centre zone?

6. There is no dispute that a serviced apartment is permissible in the B2 Local Centre zone and the Respondent drew the Court’s attention to Land Use Table in the LLEP where “Tourist and visitor accommodation” is permitted with consent and then drew the Court’s attention to the Dictionary of the LLEP which defines serviced apartment as a type or subset of “Tourist and visitor accommodation”.

7. The issue in dispute is whether the Proposed Development is consistent with the objectives of the B2 Local Centre zone in the Land Use Table and if so, whether the Court should refuse the application on that basis.

8. I note that the Statement of Environmental Effects prepared by Think Planners Pty Ltd dated 6 March 2019 (the SEE) at page 10 states that the Development Proposal “is consistent with the prescribed zone objectives” but does not go into any assessment or analysis. In the LLEP the objectives of the Zone B2 Local Centre are as follows:

1   Objectives of zone

•  To provide a range of retail, business, entertainment and community uses that serve the needs of people who live in, work in and visit the local area.

•  To encourage employment opportunities in accessible locations.

•  To maximise public transport patronage and encourage walking and cycling.

•  To ensure that development is appropriately designed to minimise amenity impacts.

•  To allow appropriate residential uses to support the vitality of local centres.

•  To ensure that uses support the viability of local centres.

•  To provide a mixture of compatible land uses.

•  To reinforce and enhance the role, function and identity of local centres by encouraging appropriate development to ensure that surrounding development does not detract from the function of local centres.

•  To integrate suitable business, office, residential, retail and other development in accessible locations.

9. Clause 2.3(2) of the LLEP requires that the consent authority to have regard to the objectives for the zone when determining a development application. This clause requires the Court to undertake this consideration of the objectives as part of the evaluation or merit assessment of the Proposed Development as required in s 4.15 of the EPA Act.

10. The Applicant submits that the B2 Local Centre Zone has 9 separate objectives. The application of cl 2.3(2) of the LLEP does not mean that a development has to satisfy all 9 objectives as pleaded by the Respondent. Other than the first objective, the development is consistent with the other 8 (refer page 2, Statement of Facts And Contentions in Reply filed 10 December 2019, Exhibit B (the SOFAC in Reply)).

11. The Planning Experts considered this issue and each undertook an assessment and analysis of the zone objectives however I note that the Planning Experts did not agree on their respective conclusions. The Statement of Facts and Contentions filed 8 July 2019, Exhibit 1 (the SOFAC), particularises that the use of a single ground floor commercial unit as a serviced apartment “undermines the integrity and commercial function of the B2 Local Centre Zone” (refer to Contention 1, Particular b. in the SOFAC). Mr Minto is of the opinion that “in having regard to the objectives of the zone that the proposal does not need to achieve compliance with each and every objective.” (Planning Expert Report, p 2). In any event Mr Minto undertakes an assessment of each of the above objectives and concludes that the Proposed Development is consistent with them and that the Proposed Development is therefore “worthy of the support of the Court” (Planning Expert Report, p 4).

12. Mr Wong similarly undertakes an assessment of each of the above zone objectives and disagrees with the conclusion of Mr Minto. Mr Wong concludes that “most of the objectives had not been achieved and on balance, the proposal had not achieved the objectives of B2-Local Centre Zoning.” In essence, Mr Wong says at pp 5 to 6 of the Planning Report that in relation to a stand alone serviced apartment:

1. Providing income for the owner is not considered a sufficient reason to justify that the first objective is achieved;

2. There is no evidence that employment will be generated, unlike larger service apartment developments which provide a dedicated concierge area or cleaner rooms. The change of use from retail premises will result in both

1. a reduction of employment opportunities. (The Court notes Mr Barthelmess’ evidence of an estimate of 6 to 8 people being able to be accommodated on the Site for office or retail/commercial use); and

2. a reduction of opportunity to provide the retailing of goods or service that will attract people to the local centre.

3. Exposure to the rear lane with associated noise impacts does not minimise amenity impacts.

4. It is not compatible with the use of immediate surroundings.

5. It detracts from the role and function of a local centre.

“It could set a precedent for similar developments in the future that would have a negative impact of the functionality and identity of the subject local centre.”

(Planning Expert Report, p 6)

13. I accept the Applicant’s submission that cl 2.3 of the LLEP is not a jurisdictional prerequisite and that not all of the objectives need to be satisfied by the Proposed Development, however, I do not accept that the Proposed Development is consistent with all but 8 of the objectives and in that regard I accept and adopt the reasons provided by Mr Wong in the Planning Report and as summarised above to the effect that on balance the Proposed Development is not consistent with objectives listed in the Land Use Table of the LLEP regarding the B2 Local Centre zone.

14. Accordingly, the Court has satisfied the requirement of cl 2.3(2) of LLEP having given consideration as detailed above to the objectives of the B2 Local Centre zone. It is not necessary for the Proposed Development to achieve compliance with each objective or even be consistent with all objectives in order to render the Proposed Development permissible. I find that on balance, the Proposed Development is generally not consistent with the objectives of this particular business zone, namely the B2 Local Centre, and I adopt the reasons of Mr Wong in so far as the proposed change of use, on the ground floor, as a stand alone serviced apartment is on balance not consistent with the majority of the objectives of the B2 Local Centre zone.

Can Flooding be adequately mitigated?

15. The Site is situated on land classified as a flood control lot and to use the language in the LLEP is part of land that is at or below the flood planning level (refer Flood Control Lot Map 3 at folio 251 of the Respondent’s Bundle of Documents, Exhibit 4). Clause 6.3 LLEP is a jurisdictional prerequisite of which the Court must be satisfied. The issue for determination by the Court is whether flooding can be adequately mitigated as required by cl 6.3(3) of the LLEP which provides as follows:

6.3 (3) Development consent must not be granted to development on land to which this clause applies unless the consent authority is satisfied that the development—

(a)  is compatible with the flood hazard of the land, and

(b)  will not significantly adversely affect flood behaviour resulting in detrimental increases in the potential flood affectation of other development or properties, and

(c)  incorporates appropriate measures to manage risk to life from flood, and

(d)  will not significantly adversely affect the environment or cause avoidable erosion, siltation, destruction of riparian vegetation or a reduction in the stability of river banks or watercourses, and

(e)  is not likely to result in unsustainable social and economic costs to the community as a consequence of flooding.

16. The Respondent submits that there are three relevant criteria of cl 6.3(3) of LLEP, namely subclauses (a), (c) and (e), which are not satisfied and that as a result the Court as the consent authority on appeal, is prevented jurisdictionally from granting the approval sought for the Proposed Development. The Respondent relies on the decision of Michael Brown Planning Strategies Pty Ltd v Wingecarribee Shire Council (2018) 233 LGERA 170; [2020] NSWCA 137 and distinguishes the decisions relied on by the Applicant being Season Group Pty Ltd v Council of the City of Sydney [2016] NSWLEC 1354 (Season Group). The Respondent submits that Season Group is distinguishable as it relates to a different type of development (demolition, alterations and additions to existing building and construction of new commercial/residential development) whereas the Proposed Development is a change of use from existing ground floor commercial to a serviced apartment.

17. The Respondent’s case is that the Proposed Development is not compatible with the flood hazard and that the change of use in effect increases the risk to life from flood and therefore does not incorporate appropriate measures to manage this increased risk. The Applicant’s case in relation to managing the risk from flood is reliant on the evidence of Mr Barthelmess to the extent that Mr Barthelmess expresses an opinion that the change of use does not affect the flood risk and that there will be less people in a serviced apartment than could be accommodated in a commercial use and therefore the risk to life is reduced.

18. The agreed relevant facts include the dimensions of the Site and surrounds as well as the agreed flood levels. As these are relevant to the proceedings, I list them as follows:

1. The Finished Floor Level (FFL) of Unit 3 is below the Flood Planning Level (FPL).

2. The finished floor level of Unit 3 is 23.08m AHD.

3. The 1% AEP flood level at the laneway to which the Unit 3 adjoins is 22.15m AHD.

4. The existing development (with habitable floors on the first level) satisfies the flood planning level being the 1% AEP flood level plus a freeboard of 500mm.

5. In the event of a flood, like almost every other site in the vicinity of Parramatta Road, vertical evacuation is proposed.

6. The finished floor level on the first floor above Unit 3 is 26.70m AHD.

7. There is a Flood Warning System installed within the building, specifically in the garage (not part of the Site) which consists of a sensor triggered alarm system where the sensor is set at 100mm above the 1 in 100 year floor level.

8. The agreed flood levels are listed in the Flood Expert Report, Exhibit 2 pp 1 and 2 based on the architectural plans and the Flood Certificate issued by Council and I set them out in the following table:

Unit 3 FFL	RL23.08m AHD
100yr Flood Water Level (at Parramatta Road)	RL23.45m AHD
FPL	RL23.95m AHD
Probable Maximum Flood (PMF)	RL24.3m AHD

19. Mr Howie and Mr Barthelmess were cross examined and the documents referred to in their evidence include:

1. “Updated Flood Management Plan for Change of Use Proposal from an Existing Retail Unit to a Serviced Apartment (Tourist and Visitor Accommodation) at 283-285 Parramatta Road, Leichhardt NSW 2040) by ING Consulting Engineers Pty Ltd filed 17 June 2019 with the Class 1 Application, Exhibit A) (Flood Management Plan)

2. Flood Certificate

3. Floodplain Development Manual

4. Leichhardt Development Control Plan 2013 (DCP), Part E Sustainable Water and Risk Management

20. I firstly address the suggestion by Mr Barthelmess that although Unit 3 is below the FPL, “the higher order objectives of the DCP can still be met, by the provision of a flood barrier door forming the front door to Unit 3.” (Flood Expert Report, p 2). A significant amount of time was spent in cross examination about the flood barrier door (the Flood Door) and whether such a Flood Door is or would be appropriate flood proofing for Unit 3 as a serviced apartment. There was much discussion as to the estimated levels of flood water that might enter Unit 3 and what role a Flood Door would play in eliminating flood risk to Unit 3. It is relevant to note that the Proposed Development relies on vertical evacuation in the event of a flood event as stated in the Flood Management Plan which goes further at Item 2 refer to Floor Level and states “Habitable floor levels to be equal to or greater than the 100 year ARI flood level plus freeboard”

21. The Flood Management Plan, forming part of the Proposed Development does not rely on any Flood Door or other flood proofing method. It was conceded by the Applicant in submissions and by Mr Barthelmess in cross examination that the Flood Door does not comprise part of the Proposed Development and I consider this issue not to be relevant or helpful to the issues for determination. I do address the Flood Door again throughout the judgment as both parties raise it again in relation to the issue of owner’s consent submissions and again in closing submissions.

22. The fundamental concern is that Unit 3 is below the FPL and that the Floodplain Development Manual and the DCP both include controls which exclude habitable uses below the FPL. The Hydraulic Engineers did not agree that the “Unit’s use as a serviced apartment exposes it to a flood risk that is greater than that of a commercial use.” (Flood Expert Report, p 3).

23. Mr Barthelmess relies on an evaluation of flood risk as being “determined by the probability of a particular flood occurring, combined with the consequence of the flood occurring.” (Flood Expert Report, p 3). In cross examination Mr Barthelmess expanded this evaluation by explaining that as the actual footprint of the building is not changing and the flood behaviour is therefore the same, the critical variable is the number of people. He estimates that in a commercial or retail setting there would be 6 or 8 people working within Unit 3 whereas in the proposed use of a serviced apartment there will be a maximum of two people and that logically leads to the conclusion that less people means less risk.

24. Mr Howie fundamentally disagreed with this evaluation of risk and it is his opinion that flood risk should be assessed by considering the exposure to flood and the vulnerability of the people. He said in cross examination that the occupants of a commercial unit (staff) are different to the occupants of a services apartment who have different vulnerabilities. He explained that risk is a function to vulnerability and the Proposed Development would result in people using the Site in different ways including sleeping over night. Mr Howie refers to the increased vulnerability of occupants in a serviced apartment who, unlike staff, are not beneficiaries of work place duty of care (he referred to fire wardens and other compliance activities required of a work place) as opposed to being self service and reliance being place entirely on them to read the flood evacuation instructions, and the added vulnerability of the fact that a flood could occur while the occupants of a serviced apartment were asleep.

25. I note that Mr Barthelmess, in response confirmed his view that you need to look at the number of people not their vulnerability.

26. I accept Mr Howie’s assessment of risk for the purpose of cl 6.3(3) of the LLEP and my reason is that the Floodplain Development Manual and the DCP both distinguish between commercial and habitable spaces, floors or rooms.

27. In particular, I note that in relation to the DCP at Part E1.3 Hazard Management, the Applicant relies on the provision of Control C2 for Single Dwelling Residential or Dual Occupancy Development which permits the floor level to be below the Flood Planning Level in certain circumstances and the Applicant referred the Court to subclause C2(g) which requires satisfactory flood proofing to the Flood Planning Level. As referenced above the finished floor level of Unit 3 is 23.08m AHD which is below the Flood Planning Level (or FPL) of 23.95.

20. I do not accept the argument of the Applicant to the effect that subclause C2(g) is applicable to the Proposed Development because this control in the DCP relates to alterations and additions to existing residential dwelling as opposed the Proposed Development which seeks approval to a change of use from commercial to serviced apartment with no physical works being proposed (apart from the installation of key lock box on the outside of Unit 3 and the relocation of the Flood Warning System). That is, the Proposed Development does not consist of alterations and additions and is neither a single dwelling nor a dual occupancy development. The Respondent submits that these provisions should be given limited weight because of the change of use resulting in different occupants, different hours of use and different familiarity with flood risk and flood evacuation procedures.

21. The Respondent also referred the Court to Control C4 for Commercial, Industrial and Mixed Use Development which excludes residential components from any floor levels being below the FPL by stating:

“All residential components and evacuation routes servicing any residential components must be above the Flood Planning Level.”

30. The Applicant referred the Court to s 4.15(3A) EPA Act for the proposition that the strict non-compliance with the DCP controls should be assessed flexibly on the basis that the Proposed Development complies with the relevant objectives. I have already referred to Mr Barthelmess’ reference to the DCP and his proposal that the higher order objectives of the DCP can be met with the Flood Door. Accordingly, I do not accept the submission that s 4.15(3A) of the EPA Act allows me to be sufficiently flexible in relation to this Proposed Development because a Flood Door is not part of the Proposed Development, the Flood Management Plan relies on vertical evaluation in a flood event and the FFL of Unit 3 is below the FPL.

31. The Applicant summarised the evidence of Mr Barthelmess in closing submissions and referred again to the Flood Door proposing that notwithstanding that the Flood Door is not part of the development application the Court, if content with the evidence of Mr Barthelmess can grant consent and pursuant to s 4.17(1)(f) of the EPA Act could impose a condition of consent to the effect that the applicant is to install and floor door to unit 3 and impose a maintenance regime.

32. Further, and perhaps more importantly, the Flood Door would be installed outside of the limitations of the Site within the strata and there is no evidence of owner’s consent from the Strata Owner’s Corporation. I deal with this again below when I consider the issue of owners consent.

33. The Respondent submits that any condition imposed by the Court for the installation of a Flood Door would not satisfy cl 6.3 of the LLEP as a matter of law. The development must be the proposed development as to any work on other land – refer Platford v van Veenendaal (2018) 229 LGERA 101; [2018] NSWLEC 27 (Platford) at [17] where Preston CJ says as follows:

“[17] The maintenance of the existing sea wall could include the carrying out of works on the land. The Council had power under s 80A(1)(f) to require the carrying out of such maintenance works. The imposition of a condition requiring the carrying out of works does not involve the grant of consent to the carrying out of the works, notwithstanding that the carrying out of works is development as defined. This is because the grant of development consent entitles the holder of the consent to carry out the development approved by the consent but does not require the carrying out of that development. A condition requiring the carrying out of works is different; the works must be carried out if the holder of the consent elects to carry out the development approved by the consent. The development must be carried out in accordance with the consent (see s 76A(1)(b)) and this includes any conditions of the consent. The development for which consent has been granted, however, remains that which was sought in the development application. It does not extend to the carrying out of any works required by a condition of the consent imposed under s 80A(1)(f) of the EPA Act.”

34. The Respondent goes on to submit further that on the basis of merit assessment, there is a lack of documentation in order to allow the Court to adequately assess the proposal – refer to Kavanagh v Hawkesbury City Council [2020] NSWLEC 1003 at [31]-[32] where Chilcott C dealt with flood liable land and insufficient information to assess a particular flood mitigation proposal and says:

“[31] Having considered the evidence of the experts, I am not satisfied that the Applicant’s proposals for evacuation of occupants from the Proposed Development during a 1 in 100 ARI flood event are such that that the risk to life from such a flood would be adequately managed, as required under cl 6.43(3)(c) of HLEP, because:

(1) I accept the uncontested expert evidence of Dr Martens that

(a) the Applicant has not provided a design for his proposed flood alarm;

(b) to assess whether a flood alarm would work on the Subject Site it would be necessary to examine the design of the proposed alarm;

(c) in the absence of a design for the proposed flood alarm, and given the nature of the Subject Site, it is not possible to establish whether the Applicant’s proposed alarm would work.

[32] Based on the evidence above at [31(1)], I conclude that it is not possible to be satisfied that the risk to life from a flood would be adequately managed, as required under cl 6.3(3)(c) of HLEP.”

35. I accept the Respondent’s submission and agree that there are no particulars or specifications before the Court for consideration as to the Flood Door or the terms of any maintenance regime for the Flood Door. I accept that there is insufficient information available to the Court to impose any such condition in any satisfactory manner as proposed by the Applicant regarding the Flood Door as a means to satisfy cl 6.3 of the LLEP.

36. It is my view that the Proposed Development involves a fundamental change of use which if approved would convert the ground floor of Unit 3 to habitable space in breach of a number of controls in the DCP. I find that the flood risk is increased and the proposal by the Applicant to address the risk, namely the Flood Door, is not part of the Proposed Development, is not privy to owner’s consent of the Body Corporate and insufficient information is provided to allow consideration of this flood proof method. For these reasons, I am not satisfied that the Proposed Development is compatible with the flood hazard of the land in breach of cl 6.3(3)(a) LLEP and I am not satisfied that the Proposed Development incorporates appropriate measures to manage risk to life from flood as required by cl 6.3(3)(c) of the LLEP.

Owners consent for works proposed on the common property owned by the strata owners corporation

37. The description of the Proposed Development is simply referred to by the Applicant as a change of use from commercial to serviced apartment and the formal particulars of the title shown on the development application is limited to unit 3. There is no description of any works proposed to take place within the common property of the Strata Plan 89564. However, the land on which the development is to be carried out is to be determined not only from the address and formal particulars of the title shown on the development application form but also from the documents that must accompany the development application. (Preston CJ at [91] in Al Maha). The evidence before the Court included the accompanying documents to the development application of the Proposed Development including the following:

1. Statement of Environmental Effects prepared by Think Planners Pty Ltd dated 6 March 2019 (SEE);

2. Drawing A3.01 Rev A filed on 17 June 2019 including a legend which identifies the ‘change of use area’ in yellow and the ‘existing area to remain unchanged in grey;

3. Letter from Building Design & Technology Pty Ltd dated 3 April 2019 (filed 17 June 2019 with the Class 1 Application, Exhibit A) which states:

“Consent is provided from the owners of the strata plan”

4. Document titled “Body Corporate Consent not required to lodge Development Application Unit 3 283-285 Parramatta Road Leichhardt 2040 (Tab 6 of Exhibit 4 – Respondent’s Bundle of documents) (the Body Corporate Consent Submission) which accompanied the development application and was under cover of the above letter from Building Design & Technology. The Body Corporate Consent Submission relies on the decision in Owners Strata Plan No 50411 v Cameron North Sydney Pty Ltd [2003] NSWCA 5 and states:

“The conclusion of the Court of Appeal was the Halpin had been incorrectly decided and that unless a development application proposes development on common property, the consent of the body corporate is not required. Hence, the owner of a strata lot that proposes development wholly within the boundaries of that lot is not required to obtain the consent of the body corporate to that application.”

5. Agreed draft conditions of consent, (Exhibit 5) which includes the following relevant proposed conditions:

1. 7 “Works outside the property Boundary”; and

2. 18 “Flood Warning System”

38. These documents together form the development application before the court which is consistent with Preston CJ in Al Maha Pty Ltd v Huajun Investments Pty Ltd (2018) 233 LGERA [2018] NSWCA 245 (Al Maha) when he said at [93]-[94]:

“[93] These accompanying documents describe the development to be carried out and the land on which the development is to be carried out.

[94] If the accompanying documents reveal that part of the proposed development extends to land other than the land whose address and formal particulars of title are shown in the development application form, that other land is also the subject of the development application: see Owners – Strata Plan 37762 v Pham [2005] NSWLEC 500 at [32].”

39. The giving of owner’s consent as required by cl 49 of the Environmental Planning and Assessment Regulation 2000 (the Regulation), to the making of a development application with respect to the owner’s land which is the subject of proposed works in accordance with that development application is “an essential prerequisite to, and part of the process of, a consent authority’s determination of the application.” (refer [95] Al Maha)

40. The Statement of Facts and Contentions filed by the Respondent on 8 July 2019, Exhibit 1 (SOFAC) includes a simple contention that:

“3. LACK OF OWNERS CONSENT FROM THE STRATA

The proposal lacks owner’s consent of the Body Corporate.”

41. This contention is particularised as follows:

“a. The proposed development impacts the use of the common areas of the building by its nature as persons using the serviced apartment will require the use of the common property of the building.”

42. The Statement of Facts and Contentions in Reply filed 10 December 2019 (Exhibit B) (SOFAC in Reply) responds to the above contention as follows:

“3. LACK OF OWNERS CONSENT FROM THE STRATA

There is no development proposed on common property. In accordance with the New South Wales Court of Appeal decision of Owners Strata Plan No 50411 & Ors v Cameron North Sydney Pty Ltd [2003] NSWCA 5, the consent of the owners’ corporation is not required.”

43. The Court was advised that on 7 August 2020 the Respondent wrote to the Applicant and alerted the Applicant that the proposed installation key lock box on the outside of Unit 3 was a concern directly related to this contention. The SOFAC was not amended by the Respondent.

44. I have reviewed the Planners Report and note that in relation to this contention they agreed at p 7 that “this is a matter for submissions by the legal representatives.”

45. Having reviewed the evidence before the Court I am required to ask the question What is the land on which the development is to be carried out? At [91] in the decision of Al Maha, Preston CJ said:

“[91] The land on which the development is to be carried out is to be determined not only from the address and formal particulars of title shown on the development application form but also from the documents that must accompany the development application.”

46. I find that there are at least two and possibly three aspects of the Proposed Development which seek consent for works to be undertaken on land outside the formal particulars of the title shown on the development application. The formal particulars of the title shown on the development application are Lot 3 SP89564, or Suite 3 283-285 Parramatta Road Leichhardt (Unit 3). The works proposed outside of Unit 3 are the following works of the Proposed Development that are sought to take place within the common property for which I list the documents which accompany the development application:

1. Key lock box installation

1. The SEE makes numerous references to the proposed key lock box including in the Executive summary, at page 7 and at page 10. In the Executive Summary and again on page 7 under the heading “Description of Proposal”, the SEE states:

“There are no physical building works […]. A key coded lock box will be installed in proximity to the access door to enable visitors to obtain the keys to the premises.”

2. Annotated “KEY LOCK BOX” and shaded yellow on Drawing A3.01 Rev A

2. Flood Warning System (trigger sensor) currently in garage but recommended by both experts to be relocated somewhere within the common area.

1. Agreed proposed Consent condition 18.

3. Flood Door: There was significant time spent during the hearing regarding a suggestion by Mr Barthelmess that the installation of a Flood Door

47. In relation to the Flood Warning System, I note that Mr Howie in the Flood Experts Report, pg 9 states:

“SH notes AB comment that the trigger sensor for flood water needs to be relocated from the garage dump area to the front hallway of the building.

SH considers [relocation of the trigger sensor] is required regardless of the proposed development and if the development should be approved should be addressed by a condition of consent.

However in this regard SH notes that this does not form part of the proposal and expects it will require owners consent.”

48. Moving the sensor trigger is expressly addressed in the agreed draft conditions of consent (Exhibit 5) at condition number 18 which provides for the following:

“18. Flood Warning System

Prior to the issue of an Occupation Certificate, the Principal Certifying Authority must be provided with Certification by a qualified practising Civil Engineer that a Flood Warning System has been installed within the property at the Parramatta Road frontage of the site and the system has been commissioned, tested and is operational and the system provides flood warning to all components of the property of 283 Parramatta Road and the existing Flood Risk Management Plan for the whole property has been updated and amended to reflect the changes. [emphasis added]”

49. The effect of including this consent condition by agreement between the parties, incorporating a flood mitigation measure identified and agreed as otherwise being desirable between the Hydraulic Engineers in the Flood Experts Report at pg 9, will in essence will result in an amendment to the development application, refer to [161] Al Maha:

“[161] The further amended development was also described in the conditions of consent that were attached to the s 34 agreement. These conditions of consent reflect the parties’ agreement as to the development for which consent was sought and how and when that development is to be carried out.” 

50. The answer to this question is potentially fatal to the Proposed Development as it is a jurisdictional prerequisite, namely, without owner’s consent development consent cannot be granted Preston CJ in Al Maha puts it as follows at [174]:

“[174] … Owner’s consent was a jurisdictional prerequisite to the valid exercise of the power to grant consent to the further amended development application. Owner’s consent is not merely a requirement to be fulfilled before work is undertaken on any affected land. The Commissioner’s decision to grant consent was therefore outside power.”

51. The Applicant in response to the Respondent’s reference to the lock box email of 7 August 2020 submits that the Court can consider the installation of the key lock box as de minimus, and not requiring consent, or in the alternative the Court can take an ‘amber light approach’ and grant the Applicant leave to amend the development application.

52. The Applicant, in oral closing submissions, explained the purpose of proposed consent condition 7 which provides:

“7. Works Outside the Property Boundary

To the extent that a condition of this consent authorises any works outside the boundary to Lot 3 SP 89564, that condition is imposed in accordance with s4.17(1)(f) of the Environmental Planning and Assessment Act 1979.”

53. The Applicant also submits that pursuant to s 4.17(1)(f) of the EPA Act the Court has the power to do the following in these proceedings:

1. modify the application and delete the lock box and require something else to be done. “If the Court were so minded this would resolve contention 3.”;

2. consent to the relocation of the Flood Warning System from its existing position to an area within the common property (as set out in the proposed agreed consent condition 18); and/or

3. modify the application and add a condition requiring the installation of a Flood Door to Unit 3.

1. I note that the Respondent does not agree with this last proposition on the basis that there is insufficient information before the Court on Appeal to properly assess and condition any Flood Door. The Respondent relies on Platford at [17] to support the argument that the Flood Door is not part of the development application.

54. I accept and agree with the Respondent’s position in relation to the Flood Door. I also find that proposed agreed consent condition 7 seeking to rely on s 4.17(1)(f) is not sufficient to empower the Court to grant consent where owner’s consent is not provided nor does it permit the Court to go beyond the development sought in the development application, in accordance with Preston CJ’s decision in Platford at [17] which I set out in full earlier at par [33] and in order to understand the context it should be noted that references to s 80A(1)(f) are references to the previously numbered version of s 4.17(1)(f).

55. I do not accept that the mere inclusion of proposed agreed consent condition 7 empowers the Court to do the things submitted by the Applicant listed above at par [53(1)] and par [53(3)] as these do not form part of the development application. In relation to the relocation of the Flood Warning System at par [53(2)] I have found that the inclusion of proposed agreed consent condition 18 effectively amends the development application so there may be some limited potential for s 4.17(1)(f) of the EPA Act however I am not prepared to do so on the basis that this Flood Warning System relocation within the common property is significant not just for Unit 3 and the Proposed Development but will modify the warning system to all components of the property of 283 Parramatta Road and will require an update to the existing Flood Risk Management Plan for the whole property. The Body Corporate has not been notified or consulted regarding such a significant change to a component of the whole building regarding flood planning.

56. I find that the land on which consent is sought for development is to be carried out includes the common property of Strata Plan 89564 which is not owned by the Applicant. The Proposed Development includes relocation of the Flood Warning System to an unspecified area within the common property and the installation of a key lock box outside of the strata lot owned by the Applicant. The representation in the letter from Building Design & Technology Pty Ltd dated 3 April 2019 is a misrepresentation and the Body Corporate Consent Submission is insufficient and inaccurate as the Proposed Development does include works that are not ‘wholly within the boundaries of that [strata] lot’, and as a result consent of the body corporate is in fact required for the Proposed Development.

54. If the Court were minded to grant consent to the Proposed Development the lack of owner’s consent from the Body Corporate of Strata Plan 89564, which is a jurisdictional prerequisite to the valid exercise of power, renders me, as presiding Commissioner, without power to grant the consent if I were so minded.

Is the Proposed Development of a serviced apartment in the B2 Local Centre in the public interest?

58. The Respondent’s case is that if the Proposed Development is replicated in other ground floor areas of the local centre, it would have a significant impact on the local economy and local employment.

59. Applicant in the SOFAC in Reply states that the facts and circumstances surrounding this application are sufficiently unique as to provide no precedent. No evidence of uniqueness and this argument is unable to be relied on to rebut the Respondent’s case that “if replicated in other ground floor areas of the local centre, [the Proposed Development would] have a significant impact on the local economy and local employment.”

60. Although there is no direct evidence of economic impact, Mr Wong relies on his conclusion above at par [12] that the Proposed Development does not achieve the objectives of the B2 Local Centre zone ‘on balance’ and that the change of use to a serviced apartment “displaces permissible uses that are consistent with the zone objectives” (Planning Expert Report, p 9).

61. Planning Expert Report considers this issue. Mr Minto relies on the change of use facilitating the “use of an existing vacant tenancy” and “will not result in any unreasonable impacts” (Planning Expert Report, p 8).

62. The Applicant’s case is that in addition to the proposed service apartment constitute a business and is therefore generally consistent with the objectives of the B2 Local Centre zone, but that the Proposed Development will result in a reduction of flood risk for the reasons given by Mr Barthelmess in the Flood Expert Report and in oral evidence, and therefore the Proposed Development poses an opportunity to reduce the risk which is ‘clearly in the public interest.”

Decision/Findings

63. In accordance with cl 2.3 of the LLEP the requirement to consider the zone objectives is satisfied, (refer par [14] above). I have considered the evidence of the Planners and the oral submissions of the parties. On balance, I accept the Respondent’s submissions and as a matter of discretion, I find that the Proposed Development is sufficiently inconsistent with the zone objectives of the B2 Local Centre zone to warrant refusal of the Proposed Development.

64. I have been required pursuant to cl 6.3 of the LLEP to consider a number of criteria and if unable to form a state of satisfaction I must refuse the Proposed Development. In relation to flood planning I find that the jurisdictional prerequisite of cl 6.3(3) of the LLEP is not satisfied. For the reasons set out in par [36] I am not satisfied that the Proposed Development is compatible with the flood hazard of the land in breach of cl 6.3(3)(a) LLEP and I am not satisfied that the Proposed Development incorporates appropriate measures to manage risk to life from flood as required by cl 6.3(3)(c) of the LLEP. As a result of not being satisfied with all the criteria in cl 6.3(3) of the LLEP I am therefore unable to grant consent to the Proposed Development.

65. For the reasons set out in par [56] I find that the Proposed Development lacks owner’s consent insofar as works are proposed within the common property of Strata Plan 89564 and as this essential jurisdictional prerequisite not satisfied I do not have any power to grant the consent as sought.

66. Finally, regarding the Respondent’s case that the Proposed Development is not in the public interest I note that the Proposed Development is sought within a business zone, and, on balance I find that it is not in public interest to have ground level serviced apartment. I do not accept that the filling of an existing commercial vacant tenancy is sufficient justification for a change of use from commercial to a serviced apartment. I accept that there are other commercial permissible uses which are on balance more consistent with the objectives of the B2 Local Centre zone than a serviced apartment.

67. Accordingly, the Proposed Development is refused pursuant to s 4.16(2) of the EPA Act for the reason that it fails to satisfy jurisdictional prerequisites regarding owners consent and flood planning (cl 6.3 LLEP) and in the event that I am in error in relation to the jurisdictional prerequisites, the Proposed Development is refused following an evaluation pursuant to s 4.15 of the EPA Act, on the basis of a merit assessment the Proposed Development is not on balance consistent with the objectives of the B2 Local Centre zone and it is not in the public interest to change the use from a ground floor commercial use to a stand along ground floor serviced apartment.

Orders

68. The Court orders that:

1. The appeal is dismissed.

2. The development application number D/2019/128 seeking development approval to change the use of an existing commercial unit to a serviced apartment at unit 3/283 Parramatta Road, Leichhardt and legally described at Lot 3 SP89564 is refused.

3. Exhibits are returned to the parties.

.……………………….

E Espinosa

Commissioner of the Land and Environment Court

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Decision last updated: 24 September 2020