Maurice Dry Cleaners Pty Ltd v Inner West Council

[2025] NSWLEC 1579

Land and Environment Court

New South Wales

Medium Neutral Citation:

Maurice Dry Cleaners Pty Ltd v Inner West Council [2025] NSWLEC 1579

Hearing dates:

Conciliation conference on 21 July 2025

Date of orders:

14 August 2025

Decision date:

14 August 2025

Jurisdiction:

Class 1

Before:

O’Neill C

Decision:

The orders of the Court are:

(1) The appeal is upheld.

(2) Development Application 2024/0786 for the demolition of the existing building with the retention of the rear wall, site remediation works, construction of a three storey mixed use development comprising co-living housing with 20 co-living rooms and ground floor retail premises above basement car parking and associated site works, at 150 Smith Street, Summer Hill, is determined by the grant of consent, subject to the conditions contained at Annexure A.

Catchwords:

DEVELOPMENT APPLICATION – mixed use development – co-living housing pursuant to Chapter 3, Part 3 of State Environmental Planning Policy (Housing) 2021 – conciliation conference – agreement between the parties - orders

Legislation Cited:

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

Land and Environment Court Act 1979 (NSW) s 34

Environmental Planning and Assessment Regulation 2021 (NSW), s 38

State Environmental Planning Policy (Housing) 2021, ss 3, 67, 68, 69, 152, 154, Ch 5

Inner West Local Environmental Plan 2022, ss 2.2, 2.7, 4.3, 4.4, 4.6, 6.2, 6.3, 6.8, 6.13

Cases Cited:

Cumming v Cumberland Council (No 2) [2021] NSWLEC 117

Four2Five Pty Ltd v Ashfield Council [2015] NSWLEC 90

Initial Action Pty Ltd v Woollahra Municipal Council (2018) 236 LGERA 256; [2018] NSWLEC 118

Wehbe v Pittwater Council (2007) 156 LGERA 446; [2007] NSWLEC 827

Category:

Principal judgment

Parties:

Maurice Dry Cleaners Pty Ltd (Applicant)
Inner West Council (Respondent)

Representation:

Counsel:
A Pickles SC (Applicant)
S Turner (Solicitor) (Respondent)

Solicitors:
Conomos Legal (Applicant)
Inner West Council (Respondent)

File Number(s):

2024/400490

Publication restriction:

Nil

JUDGMENT

1. COMMISSIONER: This is an appeal pursuant to the provisions of s 8.7(1) of the Environmental Planning and Assessment Act 1979 (EPA Act) against the refusal of Development Application No. 2024/0786 for the demolition of the existing building with the retention of the rear wall, site remediation works, construction of a three storey mixed use development comprising co-living housing with 20 co-living rooms and ground floor retail premises above basement car parking and associated site works (the proposal), at 150 Smith Street, Summer Hill (the site), by Inner West Council (the Council).

2. The Court arranged a conciliation conference under s 34 of the Land and Environment Court Act 1979 (LEC Act) between the parties, which was held on 21 July 2025. I presided over the conciliation conference. At the conciliation conference, the parties reached agreement as to the terms of a decision in the proceedings that would be acceptable to the parties. 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.

3. 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 preconditions to the exercise of power to grant development consent for the proposal.

Amended application

4. The Council, as the consent authority, consented to the amendment of the application pursuant to s 38(1) of the Environmental Planning and Assessment Regulation 2021. The architectural plans and documents comprising the amended application are:

Architectural plans:

Plan	Drawn by	Dated
Drawing DA.0.01, Cover Sheet, Revision 12.	JSA Studio	08/07/2025
Drawing DA1.01, Site Analysis, Revision 11.	JSA Studio	08/07/2025
Drawing DA1.02, Existing Site/Demolition Plan, Revision 11.	JSA Studio	08/07/2025
Drawing DA1.03, Site Photos, Revision 11.	JSA Studio	08/07/2025
Drawing DA2.01, Site/Roof Plan, Revision 12.	JSA Studio	08/07/2025
Drawing DA2.03, GFA Calculations, Revision 12.	JSA Studio	08/07/2025
Drawing DA3.01, Basement Plan, Revision 10.	JSA Studio	08/07/2025
Drawing DA3.02, Ground Floor Plan, Revision 10.	JSA Studio	08/07/2025
Drawing DA3.03, Level 1 Plan, Revision 11.	JSA Studio	08/07/2025
Drawing DA3.04, Level 2 Plan, Revision 11.	JSA Studio	08/07/2025
Drawing DA4.01, Detailed Layout Plans, Revision 11.	JSA Studio	08/07/2025
Drawing DA4.02, Detailed Layout Plans, Revision 7.	JSA Studio	08/07/2025
Drawing DA5.01, Section A-A, Revision 13.	JSA Studio	08/07/2025
Drawing DA5.02, Section B-B, Revision 11.	JSA Studio	08/07/2025
Drawing DA5.03, Section C-C, Revision 6.	JSA Studio	08/07/2025
Drawing DA6.01, Elevations, Revision 13.	JSA Studio	08/07/2025
Drawing DA6.02, Elevations, Revision 12.	JSA Studio	08/07/2025
Drawing DA8.01, Shadow Diagrams – Existing, Revision 10.	JSA Studio	08/07/2025
Drawing DA8.02, Shadow Diagram – Proposed, Revision 10.	JSA Studio	08/07/2025
Drawing DA8.03, Shadow Diagrams – 10m compliant volume, Revision 8.	JSA Studio	08/07/2025
Drawing DA8.05, Views from the Sun, Revision 8.	JSA Studio	08/07/2025
Drawing DA8.06, Elevational Shadow Diagrams, Revision 6.	JSA Studio	08/07/2025
Drawing DA8.07, Elevational Shadow Diagrams, Revision 6.	JSA Studio	08/07/2025
Drawing DA9.01, Waste Diagram 1, Revision 10.	JSA Studio	08/07/2025

Additional documents

Amended Clause 4.6 Variation to the Minimum Lot Size Development Standard	Design Collaborative Pty Ltd	26/06/2025
Offer to provide Design Related Servies	Ausgrid	10/02/2025
Interim Audit Advice on Remediation Action Plan	David Gregory (Geo-Logix Pty Ltd)	03/07/2025
Remediation Action Plan, E24530.E06_Rev4	EI Australia Pty Ltd	02/07/2025

Pre-conditions to the grant of consent

State Environmental Planning Policy (Housing) 2021 (Housing SEPP)

5. Pursuant to s 67 of the Housing SEPP, development for the purposes of co-living housing may be carried out with consent on land in a zone in which co-living housing is permitted under another Environmental Planning Instrument (EPI) or where development for the purposes of residential flat buildings is permitted under Chapter 5. Co-living housing is not permissible in the E1 Local Centre Zone under the Inner West Local Environmental Plan 2022. Chapter 5, transport-oriented development (ToD), applies to land in the Inner West Local Government Area at s 152(1)(h). Development for the purposes of residential flat buildings is permitted with development consent on land in the E1 zone in a ToD area, at s 154(1)(b). The proposal is therefore permissible with consent.

6. The following non-discretionary development standards apply to the proposal under s 68:

1. Section 68(2) Floor space ratio (FSR) allows an additional 10% of the maximum permissible FSR for residential accommodation for co-living housing. The maximum permitted FSR for shop top housing under LEP 2022 is 1.5:1 and the FSR of the proposal is 1.15:1.

2. Section 68(2)(c) the communal living area (at least 30m² plus 2m² for each room in excess of 6 rooms) and a minimum dimension of 3m for each area. 64m² is provided and the minimum dimension is met.

3. Section 68(2)(d) communal open spaces (at least 20% of the site area with a minimum dimension of 3m). 101m² is provided and the minimum dimension is met.

4. Section 68(2)(e) the site is in an accessible area and 0.2 parking spaces per private room is the non-discretionary standard which is met by the proposal.

7. The following standards for co-living housing apply under s 69:

1. 69(1)(a) There are 18 double rooms each having an area less than 25m² and more than 16m². There are 2 accessible rooms with areas of less than 25m².

2. 69(1)(b) the lot size to be at least 800 m² and the lot size of the site is 505m². I deal with the proposal’s non-compliance with the minimum site area development standard for co-living housing under SEPP Housing at paragraphs [18]-[25] of this judgment.

3. 69(1)(d) a workspace for the manager is provided in the common room on level 2.

4. 69(1)(e) no part of the ground floor that fronts the site will be used for residential purposes.

5. 69(1)(f) all rooms are provided with bathrooms and kitchenettes. The communal room has additional kitchen facilities, and a communal laundry is provided in the basement.

6. 69(1)(g) no room will be used by more than 2 occupants (condition 86(g)).

7. 69(1)(h) the proposal has adequate bicycle and motorbike facilities.

8. 69(2)(b) the proposal will largely comply with the minimum requirements for building separation under the Apartment Design Guide (ADG). The requirement is 6m, which is largely met, but for a small intrusion on level 1, which is below the fence line and will not result in any privacy impacts.

9. 69(2)(c) the proposal provides a communal living room which will receive 3 hours of solar access between 9am and 3pm in mid-winter.

10. 69(2)(f) the proposal is compatible with the desirable elements of the character of the local area.

State Environmental Planning Policy (Resilience and Hazards) 2021

8. Chapter 4 remediation of land of the State Environmental Planning Policy (Resilience and Hazards) 2021 (Hazards SEPP) applies to the application. Consideration has been given to whether the land, on which the development is to occur, is contaminated. The application includes a detailed site investigation carried out by EI Australia dated 21 February 2020 and a revised Remedial Action Plan (RAP) by EI Australia dated 2 July 2025. These documents were peer reviewed by Geo-Logix on 3 July 2025. The Geo-Logix report concludes that the RAP, as amended, if implemented will mean that the site can be made suitable for the proposed use (conditions 29 and 30 of the conditions of consent at Annexure A).

9. I accept the Council’s submission that the site is suitable for the development within the meaning of s 4.6 of the Hazards SEPP.

Inner West Local Environmental Plan 2022 (LEP 2022)

10. The site is zoned E1 Local Centre under LEP 2022. Shop top housing is permissible with consent in the zone. Co-living housing located above a retail premises is a form of shop top housing. The objectives of the E1 zone, to which regard must be had, are:

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

• To encourage investment in local commercial development that generates employment opportunities and economic growth.

• To enable residential development that contributes to a vibrant and active local centre and is consistent with the Council’s strategic planning for residential development in the area.

• To encourage business, retail, community and other non-residential land uses on the ground floor of buildings.

• To provide employment opportunities and services in locations accessible by active transport.

• To provide retail facilities and business services for the local community commensurate with the centre’s role in the local centres hierarchy.

• To ensure Inner West local centres are the primary location for commercial and retail activities.

• To ensure that new development provides diverse and active street frontages to attract pedestrian traffic and to contribute to vibrant, diverse and functional streets and public spaces.

• To enhance the unique sense of place offered by Inner West local centres by ensuring buildings display architectural and urban design quality and contributes to the desired character and cultural heritage of the locality.

11. Clause 2.7 of LEP 2022 provides that the proposed demolition is permissible with consent.

12. The proposal complies with the height of buildings development standard of 10m pursuant to cl 4.3 of LEP 2022.

13. The proposal complies with the FSR development standard of 1.5:1, with a FSR of 1.15:1, pursuant to cl 4.4 of LEP 2022.

14. Clause 6.2 of LEP 2022 (Earthworks) applies to the proposal as it includes excavation for the basement level. The application includes a preliminary Geotechnical Assessment dated 30 August 2024 which addresses the relevant matters under cl 6.2(3) and I accept the Council’s submission that these matters are satisfactorily addressed by the proposal.

15. Clause 6.3 (Stormwater management). The proposal provides for 7.7% of the site to be deep soil areas. This exceeds the requirements under the Housing SEPP and increases the permeable surfaces above the existing. It thus maximises the water permeable surfaces with 6.3(3)(a). The proposal includes a rainwater tank for onsite re-use consistent with 6.3(3)(b). The stormwater plans propose drainage of water to the street gutter for the whole site, excerpt for that collected for re-use in accordance with cl 6.3(3)(c).

16. Clause 6.8(3)(c) (Aircraft Noise) the Acoustic Report prepared by Koikas Acoustics Pty Ltd, dated 12 September 2024, deemed the proposal to be acceptable.

17. Clause 6.13(3) of LEP 2022 requires residential accommodation in Zone E1 to be mixed use, to have an active street frontage and to be compatible with the desired future character of the area. I accept the Council’s submission that the proposal meets these requirements, as follows:

• The proposal is a mixed-use development as it is retail and co-living;

• The proposal will have an active street frontage as the street frontage includes a retail space at ground floor level; and

• I accept the Council’s submission made on the basis of the agreement of the heritage and planning experts that the building is compatible with the desired character of the area.

Contravention of the minimum lot size for co-living housing development standard

18. The proposal has a site area of 505m². The minimum site area for co-living housing pursuant to s 69(1)(b) of SEPP Housing is 800m². The applicant provided a written request seeking to justify the non-compliance with the minimum site area development standard for co-living housing prepared by Design Collaborative and dated 26 June 2025.

19. Clause 4.6(3) establishes preconditions that must be satisfied before a consent authority or the Court exercising the functions of a consent authority can exercise the power to grant development consent (Initial Action Pty Ltd v Woollahra Municipal Council (2018) 236 LGERA 256; [2018] NSWLEC 118 at [13] “Initial Action”). The consent authority must form two positive opinions of satisfaction under cl 4.6(3). The consent authority, or the Court on appeal, must be satisfied that, (a) compliance with the development standard is unreasonable or unnecessary in the circumstances, and (b) there are sufficient environmental planning grounds to justify the contravention of the development standard.

20. The applicant bears the onus to demonstrate that the matters in cl 4.6(3) have been adequately addressed in order to enable the Court, exercising the functions of the consent authority, to form the requisite opinion of satisfaction.

21. The common ways in which an applicant might demonstrate that compliance with a development standard is unreasonable or unnecessary are summarised by Preston CJ in Wehbe v Pittwater Council (2007) 156 LGERA 446; [2007] NSWLEC 827 at [42]-[51] (“Wehbe”) and repeated in Initial Action [17]-[21]:

1. The objectives of the development standard are achieved notwithstanding non-compliance with the standard;

2. The underlying objective or purpose of the development standard is not relevant to the development, so that compliance is unnecessary;

3. The underlying objective or purpose would be defeated or thwarted if compliance was required, so that compliance is unreasonable;

4. The development standard has been abandoned by the council;

5. The zoning of the site was unreasonable or inappropriate so that the development standard was also unreasonable or unnecessary (note this is a limited way of establishing that compliance is not necessary as it is not a way to effect general planning changes as an alternative to strategic planning powers).

22. The five ways to demonstrate compliance is unreasonable/unnecessary are not exhaustive, and it may be sufficient to establish only one way (Initial Action at [22]).

23. The applicant’s written request justifies the contravention of the minimum lot size development standard for co-living housing on the basis that compliance is unreasonable or unnecessary because the relevant principles of SEPP Housing under s 3 are met by the proposal, where there are no objectives specific to the standards under s 69 of SEPP Housing.

24. The grounds relied on by the applicant in the written request under cl 4.6 must be “environmental planning grounds” by their nature, and environmental planning grounds is a phrase of wide generality (Four2Five Pty Ltd v Ashfield Council [2015] NSWLEC 90 at [26]) as they refer to grounds that relate to the subject matter, scope and purpose of the EPA Act, including the objects of the Act (Initial Action at [23]). The environmental planning grounds relied upon must be sufficient to justify contravening the development standard and the focus is on the aspect of the development that contravenes the development standard, not the development as a whole (Initial Action at [24] and Cumming v Cumberland Council (No 2) [2021] NSWLEC 117 at [78]). Therefore, the environmental planning grounds advanced in the written request must justify the contravention of the development standard and not simply promote the benefits of carrying out the development as a whole (Initial Action at [24]).

25. I am satisfied that the applicant’s written request has adequately addressed the matters required to be demonstrated by cl 4.6(3). The applicant’s written request defends the non-compliance with the minimum lot size development standard by demonstrating that the proposal complies with all the relevant controls relating to residential amenity and is not an overdevelopment of the site, which demonstrates that the proposal is consistent with principles of SEPP Housing. The proposal is significantly below the FSR development standard for the site and will provide additional affordable dwellings within the area consistent with the principle of enabling the development of diverse housing types, including purpose-built rental housing, at s 3(a) of SEPP Housing. I am satisfied that justifying the numerical non-compliance with the minimum lot size for co-living housing in this way can be properly described as an environmental planning ground within the meaning identified by his Honour in Initial Action at [23].

Conclusion

26. I have considered the submissions made by the Council in the Jurisdictional Statement filed with the Court on 21 July 2025 and I am satisfied on the basis of the evidence before me that the agreement of the parties is a decision that the Court could have made in the proper exercise of its functions.

Orders

27. The orders of the Court are:

1. The appeal is upheld.

2. Development Application No. 2024/0786 for the demolition of the existing building with the retention of the rear wall, site remediation works, construction of a three storey mixed use development comprising co-living housing with 20 co-living rooms and ground floor retail premises above basement car parking and associated site works, at 150 Smith Street, Summer Hill, is determined by the grant of consent, subject to the conditions contained at Annexure A.

Susan O’Neill

Commissioner of the Court

Annexure A (496 KB, pdf)

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Decision last updated: 14 August 2025