Jomasa Pty Limited v Council of the City of Ryde

[2017] NSWLEC 1262

Land and Environment Court

New South Wales

Medium Neutral Citation:	Jomasa Pty Limited v Council of the City of Ryde [2017] NSWLEC 1262
Hearing dates:	15 May 2017
Date of orders:	30 May 2017
Decision date:	30 May 2017
Jurisdiction:	Class 1
Before:	Commissioner Gray
Decision:	The Court orders that: 1. The appeal is upheld; 2. Development consent is granted to development application LDA2016/0380 for the strata subdivision of the residential apartment building at 146 Bowden Street Meadowbank (Lot 101 DP 1037638) subject to the conditions of consent contained in Annexure A; 3. Exhibits C and D be returned.
Catchwords:	APPEAL - strata subdivision – whether consent to be granted subject to two conditions - conditions requiring compliance with voluntary planning agreement and conditions of earlier building consent - compliance with voluntary planning agreement and building approval already required for occupation certificate - settlement of subdivided lots cannot occur without occupation certificate - strata consent granted - conditions not necessary in circumstances
Legislation Cited:	Building Professionals Act 2005 Pt 7 Conveyancing (Sale of Land) Regulation 2010 Sch 2 cl 2 Environmental Planning and Assessment Act 1979 ss 79C, 80A, 93F, 97, 109H(2) Environmental Planning and Assessment Regulation 2000 cl 92 Land and Environment Court Act 1979 s 39 Ryde Local Environmental Plan 2014 cl 2.6 Strata Schemes Development Act 2015
Cases Cited:	MacDonald v Mosman Municipal Council (1999) 105 LGERA 149 Newbury District Council v Secretary of State for the Environment [1981] AC 578 Planning Commission (WA) v Temwood Holdings Pty Ltd (2004) 221 CLR 30
Category:	Principal judgment
Parties:	Jomasa Pty Limited (Applicant) Council of the City of Ryde (Respondent)
Representation:	Counsel: J Johnson (Applicant) S Berveling (Respondent)   Solicitor: Madison Marcus Law Firm (Applicant) Paul Kapetas (Respondent)
File Number(s):	2017/00096818

Judgment

1. COMMISSIONER: On 27 October 2016, the City of Ryde Council granted development consent for the strata subdivision of a residential apartment building at 146 Bowden Street Meadowbank. The consent is subject to a number of conditions, conditions 9 and 10 of which are as follows:

“9. Voluntary Planning Agreement - Pursuant to Section 80A (1) of the Environmental Planning and Assessment Act 1979, the requirements of the Voluntary Planning Agreement (e.g. public access easement) between Council of City of Ryde and the proponent are to be complied with prior to the release of the Strata Subdivision Certificate.

10. Occupation Certificate. The Occupation Certificate (final) associated with Development Consent DA2008/729 and all related S96 applications if any, must be issued for the entire development prior to the release of the Strata Subdivision Certificate.”

2. Jomasa Pty Limited (‘Jomasa’) is dissatisfied with the determination of the Council to grant consent subject to these conditions, and appeals to the Court pursuant to s 97 of the Environmental Planning and Assessment Act 1979 (‘the EPA Act’).

3. As there is no right to appeal against the conditions of a development consent, the appeal concerns the whole of the decision made by the Council. In considering the appeal, the Court re-exercises the functions of the Council in determining the application for strata subdivision (s 39 of the Land and Environment Court Act 1979 (‘the Court Act’)). It is in the context of that determination that there arises the question of what appropriate and necessary conditions should be imposed on the grant of consent. Of course, in imposing any conditions, they must meet the statutory requirements of s 80A of the EPA Act.

4. Both parties agree that the consent should be given subject to conditions. The question for consideration is whether conditions 9 and 10 ought to be imposed on the grant of consent. Jomasa’s position is that conditions 9 and 10 should not be imposed. As it transpires, the Council consents to them being removed from any consent granted by the Court on the basis that they need not be imposed.

5. I have determined that consent should be granted for the subdivision of the residential apartment building subject to conditions, without the imposition of conditions 9 and 10. For the reasons set out below, I consider that the imposition of conditions 9 and 10 impose an additional obligation on Jomasa that is unnecessary in the circumstances.

Background: The building consent

6. On 27 March 2007, Commissioner Bly granted development consent for the construction of three four-storey residential flat buildings above basement car parking at the site the subject of the proceedings. On 21 April 2009, the Council granted development consent to development application LDA2008/0729. The consent incorporated the original design the subject of the court granted consent, with an additional seventeen apartments created through an additional storey and reconfiguration of the approved apartment mix. The resulting approved development was for a five storey residential flat building, consisting of 61 residential dwellings with 4000m2 of basement car parking (‘the building consent’). Condition three of the building consent required the surrender of the court granted consent.

7. The property that benefits from the building consent is burdened by both an easement for drainage, which contains a stormwater pipe, and an easement for an oil pipeline.

8. The first condition of the building consent required that development be carried out in accordance with specific plans, including plans for a stormwater concept design by Cardno Willing. The stormwater drainage works are then set out in condition 5 as follows:

Council stormwater drainage works on the development site and dedicated lands shall be constructed generally in accordance with drawing nos. 888501-D-202 revision K and 888501-209 revision C, prepared by Cardno Willing Pty Ltd and shall incorporate the following design criteria:

(a) The Council trunk drainage system shall be designed to convey the critical duration, 1 in 100 year ARI storm event from the upstream catchment under future development conditions, without surcharge and taking into account backwater effects from the Parramatta River.

(b) The minor drainage system of the proposed roads shall be designed to cater for the 1 in 20 year ARI storm event.

(c) Kerb inlet pits (sag and on grade) shall be cast-in-situ and conforming to

Council’s standard drainage pit details.

(d) Drainage pipelines and culverts shall be minimum Pipe Class 4, Rubber Ring Jointed, Reinforced Concrete with Type HS2 bedding Support and conforming to AS 4058.

(e) Drainage pipelines shall be designed to have a minimum longitudinal gradient of 0.5%.

(f) The stormwater drainage outlet at the Parramatta River seawall shall comply with the relevant guidelines and conditions of the Department of Water and Energy (DWE).

9. Condition 138 of the building consent requires that an engineer certify that the stormwater drainage works have been constructed in accordance with the approved plans prior to the issue of an occupation certificate.

10. A high pressure oil pipeline runs through an easement for oil pipeline that burdens the property, and is referred to as the ‘Shell Oil Pipeline’ in the building consent. Condition 6 of the building consent requires that:

The applicant shall undertake and bear all costs associated with the liaison, approval and relocation of any utility services, including the Shell Oil Pipeline. All correspondence and approvals between the applicant and utility authorities, DWE and Shell Refining (Australia) Pty Ltd shall be provided to the Council in conjunction with engineering documentation for the stormwater drainage works.

11. Condition 2 of the building consent requires the voluntary planning agreement (‘VPA’) between the Council and Conco D’oro Lounge Pty Ltd concerning the development the subject of the consent to be registered on the title prior to the issue of the construction certificate.

12. The current VPA was signed on 19 March 2014, and requires, inter alia, the dedication to the Council of part of the land for public open space and a new public road. That same part of the land is that on which most of the stormwater drainage works are required, and on which there is a crossover of the stormwater easement and the easement for the oil pipeline. The VPA also requires Conco D’oro to carry out “Contributions Works in the construction of part of the planned major stormwater drain and gross pollutant trap (on the extreme eastern edge of the site).” These works are the same as those the subject of the building consent, and are required downstream from and south of the crossover of the two easements. At Schedule 2 clause 2 of the VPA, these contributions works, amongst other development contributions, must be delivered before the issue of an Occupation Certificate.

13. The building consent was the subject of two modification approvals, on 10 March 2014 and 11 February 2016. Neither of the approvals modified the requirements for the stormwater drainage design.

The progress of the development

14. On the evidence of Mr Katrib, the project manager, the property has been developed in accordance with the building consent and is completed except for final stormwater drainage works. When assessing the development proposal for the site adjoining the site of the building consent, the Council requested changes to the overland stormwater flow paths. In the course of preparing to carry out the stormwater drainage works, it was discovered that the Shell Oil Pipeline does not cross over, or under, the Council’s existing stormwater pipe, but through it.

15. Both Viva Energy Australia Pty Ltd, who benefits from the easement for the oil pipeline, and the Council, are concerned about the potential environmental risk of damage to the oil pipeline. An inspection by Viva Energy has revealed that although the Shell Oil Pipeline is encased, the lining has suffered impact damage likely caused from debris coming down the stormwater culvert.

16. Notwithstanding that the works required to be carried out for the stormwater drainage entail the installation of a junction pit and gross pollutant trap south of, and downstream from, the intersection of the two pipes, a dispute has arisen between Jomasa and the Council as to whether the works required under the VPA and the building consent extend to remedy the intersection of the two pipes.

17. Until such time as this is resolved, the stormwater drainage works cannot be completed or, if they are completed, there is uncertainty as to whether that work will be to the satisfaction of the Council. As set out above, both the VPA and the building consent require this work to be carried out before the issue of the occupation certificate.

18. It is against this background that, in August 2016, Jomasa applied for development consent for the strata subdivision. The effect of conditions 9 and 10 is to duplicate the requirement for compliance with the VPA and the building consent by firstly requiring the VPA to be complied with and secondly requiring the issue of the occupation certificate before the release of the strata subdivision certificate. Although conditions 9 and 10 are not specific to the drainage works, it is the drainage works that remain outstanding and for the abovementioned reasons creates issues with compliance with conditions 9 and 10.

Consent for strata subdivision

19. There is no dispute between the parties that the consent for the strata subdivision should be granted. The strata plans clearly set out the separate lots to be created by the strata subdivision.

20. Section 79C(1)(a) of the EPA Act requires the Court, as the consent authority, to consider, in its assessment of a development application, the provisions of any applicable environmental planning instrument, development control plan, planning agreement, and regulations. Amongst other things, s 79C also requires consideration of the likely impacts of the development, the suitability of the site for development, any submissions made, and the public interest.

21. In the Ryde Local Environmental Plan 2014 (Ryde LEP), the land is zoned B4 mixed use. Clause 2.6(1) of the Ryde LEP allows land to which the plan applies to be subdivided, but only with development consent.

22. In considering s 79C(1)(a)(i), the council officer assessing the application sets out the following in support of a grant of consent:

“It is proposed to strata subdivide the residential flat buildings approved under LDA 2008/729 into 61 lots. The proposed strata subdivision is consistent with the approved plans as issued under the LDA2008/729 and the relevant modifications, Mod 2009/729 and the relevant modifications, Mod 2009/183 and Mod 2014/27.

Condition 39 of the LDA 2008/729 stipulated 107 off street car spaces being provided in accordance with the submitted plans. A total of 24 spaces are to be allocated to visitor car parking.

Mod 2009/183 modified, inter alia the configuration of the basement car park, increasing the number of car space by one addition [sic] space, a total of 108 car spaces were provided.

The proposal complies with the number of car parking spaces (108 spaces including 24 visitor spaces) have been shown on the strata plans.

The proposed subdivision is paper only and will have no external impact to any commercial or residential property surrounding the subject site.”

23. The following notation is also made in the assessment report:

“An encroachment of approximately 0.39m into the road reserve is noted on the plans by the balcony of Lot 28 (Level 1), Lot 42 (Level 2) and Lot 54 (Level 3). Council’s Development Engineer has reviewed the strata plans and note [sic] that the encroachment is addressed in the strata plans.

This encroachment is relatively minor and is not considered to impede the functionality of the road.”

24. The road reserve is that portion of the land to be dedicated to the Council pursuant to the VPA.

25. In considering the remaining elements of s 79C(1):

• There are no relevant draft environmental planning instruments (s 79C(1)(a)(ii));

• The development control plan that applies was considered as part of the grant of the building consent, and, as long as the subdivision is consistent with the building consent, does not inform the strata subdivision (s 79C(1)(a)(iii));

• The strata subdivision does not affect the ability of the parties to the VPA to comply with the terms of the VPA (s 79C(1)(a)(iiia));

• The consent authority is not required to consider anything additional under the regulations for a subdivision of this type (s 79C(1)(a)(iv), and see cl 92 of the Environmental Planning and Assessment Regulation 2000)

• The impacts of the strata subdivision are the same as those for the building consent, and can therefore be considered acceptable in circumstances where the strata subdivision proposed is consistent with the building consent (s 79C(1)(b));

• The site, having been constructed in accordance with the building consent, is suitable for the strata subdivision (s 79C(1)(c));

• The proposal was not required to be notified and therefore no submissions have been received (s 79C(1)(d)); and

• Given that the building is constructed with 61 units, it is in the public interest for there to be a strata subdivision to subdivide the building into 61 strata lots (s 79C(1)(e)).

26. I accept the evidence that the proposed subdivision is consistent with the approved plans under the building consent, and that in considering the above, consent should be granted for the strata subdivision subject to determining the appropriate conditions.

Conditions of consent

27. Jomasa submits that there are five separate reasons as to why conditions 9 and 10 should not be imposed on the grant of consent. Firstly, Jomasa says that they are a duplication of the existing obligation in the VPA and submits that their inclusion prevents timely compliance with processes under other legislation, namely the Strata Schemes Development Act 2015. Jomasa submits that, analogous to the Court’s decision in MacDonald v Mosman Municipal Council (1999) 105 LGERA 149, in which the Court determined that it is not appropriate to impose restrictive covenants on land to reinforce compliance with obligations under the EPA Act, the Court should not impose conditions that reinforce existing obligations under the VPA.

28. Secondly, Jomasa submits that the conditions of consent are a potential fetter to ongoing negotiations about amendments to the VPA to accommodate the discovery regarding the intersection of the two pipes.

29. Thirdly, Jomasa submits that the conditions result in unnecessary delay to the registration of the strata plan. This is because it can take up to 6 weeks for the strata plan to be registered following lodgement, but that lodgement cannot take place prior to the issue of the strata subdivision certificate. This means that once the occupation certificate is obtained, a further six weeks will be required to register the strata plan, therefore delaying the sale and occupation of the units. Jomasa submits that imposing an obligation to await the occupation certificate before the strata subdivision certificate will cause additional and unnecessary delay in completing the sale of the units following the issue of the occupation certificate, which delay, it submits, is not necessary.

30. Fourthly, Jomasa submits that to impose the conditions is inconsistent with established policy. Part 7 of the Building Professionals Act 2005 establishes the Building Professionals Board (‘BPB’) as a statutory body representing the Crown, whose functions include providing advice to the Minister for Innovation and Better Regulation, overseeing building and subdivision certification, and accrediting and regulating private certifiers in NSW. In Bulletin 18 of November 2009, the BPB provided the following practice advice:

“A number of councils are imposing conditions on the development consent for strata subdivision requiring the completion of associated building works prior to the issue of a strata certificate.

The Board's view is that an occupation certificate is the appropriate mechanism for ensuring the building work is completed and suitable for occupation and that the strata certificate should not perform this role.”

31. The Department of Infrastructure, Planning and Natural Resources (‘DIPNR’), as it then was, issued circular PS 05-001 on 22 April 2005 which stated that:

"Consent authorities should avoid unnecessarily requiring a condition to be met before an occupation certificate can be issued if that condition could reasonably be met later. This is because:

• Delay in occupation of a building can cause hardship or economic loss, eg preventing families from moving into their new home

• Payment of the builder may be withheld....

• There may be security issues with the building remaining unoccupied."

32. Jomasa submits that these policies should apply in the same manner regarding the present strata subdivision application, so that the strata subdivision consent should not require the conditions of the building consent to be met, and that conditions should not be imposed delaying the issue of the occupation certificate.

33. Finally, Jomasa submits that the conditions are beyond power, in that they do not meet the test set out in Newbury District Council v Secretary of State for the Environment [1981] AC 578 and stated by McHugh J in Planning Commission (WA) v Temwood Holdings Pty Ltd (2004) 221 CLR 30 at [57] as follows:

"A condition attached to a grant of planning permission will not be valid therefore unless:

1. The condition is for a planning purpose and not for any ulterior purpose. A planning purpose is one that implements a planning policy whose scope is ascertained by reference to the legislation that confers planning functions on the authority, not by reference to some preconceived general notion of what constitutes planning.

2. The condition reasonably and fairly relates to the development permitted.

3. The condition is not so unreasonable that no reasonable planning authority could have imposed it. "

34. Jomasa submits that the conditions are not for a planning purpose, that no objective in s 5 of the EPA Act is advanced by their imposition, and that they serve an ulterior purpose by delaying the strata subdivision and enforcing compliance with the VPA. Jomasa also submits that the conditions are unreasonable in that they achieve no benefit for the Council in terms of protection of existing obligations.

35. The Council does not oppose the removal of the conditions on the basis that they ‘need not’ be imposed and in circumstances where their absence will allow Jomasa to proceed with the process for registering the strata plan. However, the Council submits that the conditions were appropriate in that they created a set of parallel obligations to those arising under the building consent and the VPA. The Council submits that the Court is not required to follow the practice advice set out by the BPB Bulletin or the DIPNR circular.

36. Further, the Council submits that the conditions were lawfully imposed as they go to whether the conditions of the building consent, which creates the proposed strata units, will be complied with. The Council submits that one cannot look at a development consent, a VPA and a strata subdivision as separate silos, for to do so would not achieve the overall planning purpose for the development of the site.

37. However, the Council accepts that there are other mechanisms to ensure that the conditions are complied with, and that is through the occupation certificate. The Council points out that the sale of the properties cannot move to settlement without the occupation certificate. This is as a result of the Conveyancing (Sale of Land) Regulation 2010, which contains terms prescribed for a contract for the sale of units purchased off the plan. Specifically, cl 2 of Schedule 2 imposes the following prescribed term of contract:

“2   Strata units bought off the plan

(1)     The vendor must serve, at least 14 days before completion, an occupation certificate within the meaning of the Environmental Planning and Assessment Act 1979 (being an interim occupation certificate or a final occupation certificate) in relation to the building, or part of the building, of which the lot and access to the lot form part.

(2)     For the purposes of this clause, the part of a building comprising access to a lot is any part of the building reasonably necessary for access to the lot.

(3)     The purchaser does not have to complete earlier than 14 days after service of the certificate.”

38. I am satisfied that the imposition of conditions 9 and 10 is not necessary in the circumstances and on the merits of the present application. As such, similar to the approach taken by Justice Lloyd in MacDonald v Mosman Municipal Council, I need not consider whether the conditions were lawfully imposed.

39. I accept the submission of the Council that the DIPNR circular and the BPB advice are not binding on or determinative of the issue. The BPB practice advice provides a general proposition that the development consent for strata subdivision is not the appropriate vehicle through which to ensure that building works are completed, and that the appropriate vehicle for the same is the occupation certificate. Whilst that general proposition is a helpful one, each development application for strata subdivision should be considered on its own merits, and whether such a condition should be imposed will depend on the circumstances of the particular application. The DIPNR circular is relevant to an issue of whether the conditions of the building consent should be met prior to the issue of the occupation certificate, which issue is not raised here and is clearly required pursuant to both the VPA and the building consent.

40. In the circumstances of the present application, I accept that the imposition of conditions 9 and 10 is unnecessary. Firstly, the VPA is registered on the title of the property, and requires completion of the contribution works before the issue of the occupation certificate. This is supported by s 109H(2) of the EPA Act, which prohibits the issue of an occupation certificate unless “any requirements of a planning agreement referred to in section 93F that, by its terms, are required to be complied with before such a certificate is issued, have been met.”

41. Secondly, the only portion of the building consent that remains incomplete relates to the stormwater drainage works. The building consent requires that the work be carried out prior to the issue of the occupation certificate.

42. Without the occupation certificate, the sale of the strata units created by the subdivision consent cannot be completed, therefore preventing the units passing to new ownership without the terms of the VPA and the conditions of the building consent being complied with.

43. If conditions 9 and 10 are imposed, this will require the occupation certificate to be obtained prior to commencing the process for obtaining the strata certificate. Given that such a process can take up to 6 weeks, this will create delay in moving forward with the settlement of the sale of, and therefore the occupation of, the strata units created by the subdivision.

44. I accept, therefore, that requiring the occupation certificate before releasing the strata subdivision certificate will cause additional and unnecessary delay in circumstances where the protection that the Council is seeking to obtain through the two conditions is already given by the conditions of consent on the building consent and the terms of the VPA.

45. The remainder of the conditions (conditions 1 through 8) are appropriate and should remain.

46. The Court orders that:

1. The appeal is upheld;

2. Development consent is granted to development application LDA2016/0380 for the strata subdivision of the residential apartment building at 146 Bowden Street Meadowbank (Lot 101 DP 1037638) subject to the conditions of consent contained in Annexure A;

3. Exhibits C and D be returned.

……………………….

Joanne Gray

Commissioner of the Court

96818.17 Gray (C) (1.05 MB, pdf)

Decision last updated: 30 May 2017