Meriton v Sydney City Council

Case

[2004] NSWLEC 313

07/02/2004

No judgment structure available for this case.

Land and Environment Court


of New South Wales


CITATION: Meriton v Sydney City Council [2004] NSWLEC 313
PARTIES:

Applicant:
Meriton Properties Management Pty Ltd and Karimbla Properties (No 3) Pty Ltd

Respondent:
Council of the City of Sydney
FILE NUMBER(S): 10193 of 2004
CORAM: Roseth SC
KEY ISSUES: Development Application :- Staged development
Impact on heritage
Planning principle: protection of visual privacy
LEGISLATION CITED:
CASES CITED:
DATES OF HEARING: 08/06/2004-10/06/2004
DATE OF JUDGMENT: 07/02/2004
LEGAL REPRESENTATIVES:
Mr B Preston QC
instructed by Ms J Hughes of Phillip Fox
Mr M Craig QC
instructed by Ms I Feguson of Maddocks Lawyers



JUDGMENT:

IN THE LAND AND


ENVIRONMENT COURT


OF NEW SOUTH WALES

10193 of 2004

Roseth SC

2 July 2004

Meriton Property Management Pty Ltd
and Karimbla Properties (No 3) Pty Ltd

Applicant

v

Sydney City Council

Respondent


      Introduction

1 This is an appeal against the refusal by Sydney City Council (the council) of a Stage 1 development application to demolish the existing buildings and receive approval for a building design envelope, a maximum Floor Space Ratio (FSR) and commercial, retail and residential and associated parking use of lot 1 DP 767757, lot 1 DP 767752 and lot 1 DP 77787, known as 420-426 Pitt Street and 36-38 Campbell Street, Sydney.


      The site

2 The site is L-shaped, wrapping itself around the Chamberlain Hotel, which is at the corner of Pitt and Campbell Streets and is part of an item of heritage that includes four shops on the Pitt Street section of the site. It is common ground that, apart from these shops, the other existing buildings of the site are of no interest and may be demolished. The area of the site is 1,147m2.

3 To the south of the site is the abovementioned Chamberlain Hotel. To the north is a 30-storey apartment building, called Pitt Tower. One wall of this building is built on the boundary; others are reasonably close, including one corner 200mm away. The Pitt Tower has windows facing south over the site. The titles to the apartments that contain these windows include a positive covenant relating to these windows. The wording of the covenant lends itself to different interpretations.

4 To the west of the site is the Campbell Tower, which is a 36-storeys high apartment building about 26m from the site. A third residential tower, the Castlereagh Tower also exists and adds to the high-density character of the street block between Pitt, Castlereagh, Campbell and Goulburn Streets.

5 In addition to these tall residential towers, there are several lower buildings around the site, some of them heritage items. The section of Pitt Street between Goulburn and Campbell Streets includes some of these. Nevertheless, Pitt Street does not appear on the map of heritage streetscapes in the CSLEP 96.


      The proposal and its history

6 The applicant proposes to demolish the existing buildings on the site, with the exception of the façade of the four heritage-listed shops. It proposes a building design envelope, within which a building shall be designed in the Stage 2 application. The maximum height is RL 98.5 and the Floor Space Ratio (FSR) is 13:1. The proposal includes six levels of underground parking, the use of 2,524m2 of retail and commercial floor space, and the residential use of the tower. It proposes pedestrian access into the building from Pitt Street, retail frontages to Pitt and Campbell Streets and vehicular access from Campbell Street.

7 The applicant lodged the application in June 2003. Following notification the council received 29 written objections, a petition containing 49 signatories and 163 pro-forma letters. The council refused the application in September 2003. The applicant lodged the appeal in February 2004.


      Relevant legislation, planning instruments and policies

8 The Central Sydney Local Environmental Plan 1996 (the CSLEP 96) zones this site Mixed Use. The basic FSR is 8:1, while the maximum FSR (subject to the purchase of heritage floor space) is 13.74:1. The maximum height is subject to the Belmore Park Sun Access Plane.

9 The Central Sydney Heritage Local Environmental Plan 2000 (the Heritage LEP) lists the Chamberlain Hotel and associated shops as a heritage item. The Chamberlain Hotel adjoins the site to the north. The associated shops are on the subject site.

10 The City of Sydney Development Control Plan (the CSDCP) contains detailed design controls for building.

11 State Environmental Planning Policy 65 (SEPP 65) provides design principles for residential flat buildings. Attached to the Policy is a design guideline called Residential Flat Design Code.


      The issues

12 The council submitted a Statement of Issues containing eight issues. During the hearings the following emerged as the major issues:


· What level of information should be provided in a Stage 1 application? Has the proposal provided it?


· Is there power to approve a Stage 1 application that relies on the allocation of heritage floor space, materially affects a heritage item and has not involved a competitive design process?


· Is the impact of the proposed building design envelope on the Chamberlain Hotel and associated shops acceptable?


· What are the appropriate setbacks and height of the building design envelope?


· Is the proposal’s impact on Pitt and Campbell towers acceptable?


· Is the internal amenity acceptable?


      Level of information in a Stage 1 application

13 The planning and urban design experts were Mr Nigel Dickson and Ms Anne Marie Bunting, for the council, and Ms Sandra Robinson, for the applicant. They disagreed about the extent of detail required for a Stage 1 application. Of the three, Mr Dickson required the largest amount of detail, leaving for the Stage 2 application only technical details and architectural finishes. He had not informed himself of the council’s procedures, so I cannot give this part of his evidence any weight. Ms Bunting, who works for the council and is therefore entirely familiar with its procedures, said that plans and elevations were required, rather than just a building envelope. Ms Robinson said that a building design envelope was sufficient; so long as the consent authority could be certain that a satisfactory building could later be planned within the envelope.

14 While the application is for the approval of the building design envelope only, the applicant has submitted indicative drawings of the detailed planning of the floors and elevations. I understand these to be supplementary information, rather than part of what the applicant seeks approval for. Their purpose is to demonstrate that a satisfactory building can be planned within the envelope.

15 Since the Stage 1 application has its basis in the requirements of the CSLEP 96, it seems sensible to turn to that plan for guidance. The CSLEP 96 requires, for sites with certain characteristics, an adopted development plan before a development application can be made. However, under s28B(5), an adopted development plan is not required where consent has been granted in accordance with s80(4) of the Environmental Planning and Assessment Act 1979. The practical effect of this is that an applicant may prepare an application under s80(4), ie a Stage 1 application, and have it treated as if it were a development plan. One may therefore, for the purposes of the CSLEP 96, use the terms development plan and Stage 1 application interchangeably. Whatever the CSLEP 96 says about development plans applies also to Stage 1 applications.

16 In an explanatory note to Urban From and Design Excellence, the CSLEP 96 says:

          The purpose of the development plan is to establish the major urban form constraints and opportunities for development proposals at an early stage and produce high quality developments. The development plan will establish a proposed building design envelope, floor space ratio and height appropriate for a site and its context.

17 Clause 28C of the CSLEP 96 deals with the general requirements of development plans. Subclause (2) states:

          A development plan may be adopted by the consent authority only if it is satisfied that the plan adequately addresses the following matters and proposes high quality development with a floor space ratio and height appropriate for the site and context:
              (a) design response to an analysis of the site and its context,
              (b) site amalgamation, having regard to the site’s size and location, to sites included or excluded from amalgamation and to the impact on the development potential of adjoining sites,
              (c) uses, use mix and subdivision patterns,
              (d) sensitivity to heritage issues and streetscape constraints,
              (e) tower location on the site, having regard to the need to achieve an acceptable relationship with other towers (existing or proposed) on the same site or on neighbouring sites in terms of separation, setbacks, amenity and urban form,
              (f) bulk, massing and modulation of buildings,
              (g) street frontage heights,
              (h) environmental impacts such as sustainable design, overshadowing, wind and reflectivity,
              (i) pedestrian, cycle, vehicular and service access, circulation and requirements,
              (j) impact upon, and improvements to, the public domain,
              (k) design excellence, having regard to clause 28D and particularly the processes referred to in clause 28D (2) (c) and (d),
              (l) compliance with the other requirements of this Plan.
          The floor space ratio and height of any building must comply with Parts 4 and 5 of this Plan.

18 It is clear from the explanatory note that a development plan (and hence a Stage 1 application) is concerned with a building design envelope, floor space ratio and height. All of the matters listed in 28C(2)(a) to (l) may be satisfied by a building design envelope, floor space ratio and height, with the exception of (k), ie design excellence. To come to a conclusion that a building is of excellent design, one would need more than the envelope within which it is contained.

19 Clause 28D sets out what the council believes constitutes design excellence. Central to the concept of design excellence are the requirements in 28D(2)(c) and (d), namely

          (c) whether the design for the building is the result of a competitive process that facilitates design excellence; and
          (d) whether there is a process which ensures continuity and demonstrates that the approved design, both in concept and detail will be realised in the completed building and that the design quality will not be diminished in its translation.

20 Ms Robinson agreed that the design of the envelope was not the result of a competitive process and that the envelope, by itself, did not exhibit design excellence. She suggested that the competitive process would be part of the Stage 2 application. In my opinion, this is consistent with the requirements of the CSLEP 96. Clause 28C(2) requires that the consent authority should be satisfied that the plan (or the Stage 1 application) adequately addresses the matter of design excellence. Since the applicant suggested that the approval of the Stage 1 application should be subject to a condition that Stage 2 is undertaken as a competitive design process, the consent authority (in this case the Court) may be satisfied on that account.

21 Notwithstanding the above, I accept Mr Dickson’s opinion (with which everyone agreed) that before a consent authority can consent to a building design envelope, it must be satisfied that it is possible to plan a satisfactory building within that envelope. The applicant submitted indicative plans and elevations that demonstrate that this can be done. While the indicative plans and elevations accompany the Stage 1 application, they are not part of it and do not require approval, so that if in Stage 2 the building is planned in a different way, the Stage 1 approval does not need to be amended. To satisfy the CSLEP 96’s requirement for design excellence, the design of Stage 2 must be the result of a competition between several designers. I conclude that the approval of a Stage 1 application needs to encompass only the building design envelope, height and FSR of a building, which will be designed as part of a competitive process in Stage 2.

22 I note that Brown C and I have dealt with a similar question in Anglican Church v Sydney City Council [(2003) NSWLEC 353], where we said:

          We accept that multi-stage applications are useful for large or controversial projects as they provide the applicant with certainty about the major parameters of a proposal before it embarks on the expensive exercise of preparing detailed drawings and specifications for a development application. The critical issue is: how much detail should be provided in the Stage 1 application as against the Stage 2 application?
          The principle we have adopted is that in multi-stage applications the information provided in Stage 1 should respond to all those matters that are critical to the assessment of the proposal. Where traffic generation is the critical issue, Stage 1 should include information on the precise number of cars accommodated on a site. Where the floor space is critical, Stage 1 should include the precise FSR. Where the major issue is the protection of vegetation, the footprints of the proposed buildings may be sufficient. In the proposal before us, however, the two major issues are the impact on the heritage-listed Church and the heritage streetscape. In our opinion, two building envelopes, within which buildings of any shape or design might emerge, are not sufficient to make a proper assessment.

23 Further in the judgment we returned to the topic of Stage 1 applications, saying:

          There is another reason why the design of building envelopes is the worst possible first step in planning this site’s redevelopment. A building envelope is, by its very nature, a bland, block-like shape that is the antithesis of the intricate, sculptured neo-Gothic architecture of St Johns Church. Once a building envelope is given Stage 1 consent, economic pressures are likely to ensure that the detailed building designed for Stage 2 will fill the envelope. This increases the likelihood of a bland and block-like design.

24 The present case distinguishes itself from the Anglican Church in several important ways. First and foremost, the site in the Anglican Church was not under the CSLEP 96, so there were no statutory requirements relating to development plans or Stage 1 applications. Second, the design of Stage 2 in the Anglican Church was not required to be the result of a design competition. Third, the envelope in the present case is not a bland rectangular prism with the potential to obscure the heritage item, but a shape that is modulated in both plan and elevation. Fourth, the FSR sought in the application is less than would be produced by the filling in of the envelope. Fifth, the envelope is set back from the heritage items and whether the Stage 2 design will fill or not, the impact on the heritage items will not change.


      The allocation of heritage floor space in a Stage 1 application

25 Pursuant to cl 35(1C) of the CSLEP, heritage floor space additional to FSR 8:1 may be allocated to this site only if, among other things, the additional floor space is consistent with any relevant development plan and the design excellence provisions of this plan. The Stage 1 approval relating to building design envelope, height and FSR must therefore be conditioned to ensure that any FSR above 8:1 depends on meeting the plan’s requirements for design excellence. This consent is conditioned accordingly.


      Impact on the Chamberlain Hotel and attached shops

26 The council’s heritage expert was Mr G Brooks, while the applicant’s was Mr S Davies. There were three major points of difference between them:


· Mr Brooks considered that the proposed tower should set back from Pitt Street by 10m; Mr Davies thought that 8m were sufficient.


· Mr Brooks wanted a second setback in the tower, around mid-height; Mr Davies thought that this was unnecessary.


· Mr Brooks wanted the roof of the four shops preserved; Mr Davies pointed out that the roofs could not be seen from the public domain.

27 I note that the CSLEP 96 requires a 10m setback where the setback is from a heritage building in a heritage streetscape. The proposal sets back from a heritage building but Pitt Street is not a heritage streetscape identified in the CSLEP 96. In my opinion, the important issue here is the heritage building. The hotel and the shops occupy a long enough section of the street to constitute a heritage streetscape. I accept Mr Brooks’ opinion that the setback from Pitt Street should be 10m.

28 I do not think that Mr Brooks is reasonable in requiring a second setback in the tower. Such a setback would be out of the arc of vision of most passers-by. In the context of the many existing tall buildings around the site, it would not materially reduce the impact on the hotel and shops. It is likely to present the applicant with an inefficient envelope in which to plan the Stage 2 application.

29 I also do not accept Mr Brooks’ suggestion that the roof of the shops should be preserved. I understand it to be common ground that the roof would have to be renewed, so that real preservation is not possible, though, of course, it would be possible to re-construct the roof in its present form and materials. Given that the experts agreed that there was no benefit in keeping the interiors of the shops, there is no sense in requiring the reconstruction of the roof over a space that is no longer the original building. What seems to me important to heritage significance is that the applicant is keeping three of the four shops in retail use.

30 I am strengthened in my conclusion by applying the principles established in Anglican Church v Sydney City Council (referred to above), where Brown C and I said that four tests should apply to the assessment of impact on the heritage significance of a heritage item, namely:


· First, new development should not unreasonably reduce public views of the heritage item and its setting.


· Second, new development should not visually dominate the heritage building.


· Third, new development should not unreasonably overshadow the heritage building.


· Fourth, new development should relate to the character and form of the heritage item.

31 The proposal clearly meets the first and third tests. It also meets the second test, when it is considered in the context of the 10m setback from Pitt Street and the existing tall buildings that are the visual backdrop to the hotel. As concerns the fourth test, the proposal’s relationship to the hotel’s character will be determined by the architectural design of Stage 2, which will be the result of a design competition.

32 Clause 9 of the Heritage LEP defines the term “materially affects” as follows.

          (1) For the purposes of clauses 10–12, development on land that comprises or includes the site of a Schedule 1 heritage item materially affects the item only if:
            (a) it will reduce or increase the building envelope occupied by the item, or
            (b) it will be carried out within the airspace above the building envelope occupied by the item.
          (2) However, development does not materially affect a heritage item if, in the opinion of the consent authority, the proposed development will not adversely affect the heritage significance of the heritage item concerned.

33 Clause 11 of the heritage LEP states that

            The consent authority must not grant consent for development that will materially affect a Schedule 1 heritage item unless it is satisfied that:
            (a) the item, or the part of the item affected, is not of such heritage significance or landmark value that the proposed development would diminish the heritage of the City of Sydney, and
            (b) the proposed development exhibits design excellence and is superior in quality to the existing heritage item, and

            (c) the proposed development would make a superior contribution to the quality of the public domain of the City of Sydney to that made by the existing heritage item, and
            (d) in the case of partial demolition, the proposed development would conserve the heritage significance (and would not prejudice the continued heritage item status) of the item, would facilitate its continued use or adaptive reuse, and would contribute to the ongoing conservation of the heritage item, or the affected part of the item that will be retained, and
            (e) in the case of complete demolition, the retention of the heritage item would render the site on which it is located incapable of viable continued use or adaptive reuse.

34 The Court has found that, subject to a 10m setback from Pitt Street, the proposed building design envelope will not adversely affect the heritage significance of the hotel and associated shops. The proposed building design envelope will therefore not materially affect the heritage item.

35 However, if this finding were wrong, the first four requirements of cl 11 are met in relation to the interior and the roof of the four shops. The interior and roof of the shops is not of such heritage significance or landmark value that their refurbishment would diminish the heritage of the City of Sydney. While the proposed building design envelope does not exhibit design excellence, the Stage 1 approval is conditioned to fulfil this requirement in Stage 2. The proposed development (ie the new interior and roof of the refurbished shops) would make a superior contribution to the quality of the public domain. It would conserve the heritage significance (and would not prejudice the continued heritage item status) of the shops, would facilitate their continued use or adaptive reuse, and would contribute to the ongoing conservation of the facade.


      Setbacks and height of the building design envelope

36 Apart from the dispute about whether the setback from Pitt Street should be 8m or 10m, the planning and design experts disagreed about the appropriate height and shape of the proposed tower. Mr Dickson recommended that the tower be split into three small towers, of which the tallest would be two-storeys shorter than that proposed and the two smaller ones would reach a height of RL 62. The maximum FSR such an envelope could achieve would be 8.5:1.

37 I can only regard Mr Dickson’s proposal as an alternative design that he would have produced, had the applicant commissioned him to prepare the application. I do not know whether it is possible to plan apartments in three separate towers with any degree of efficiency, but I doubt it. The problems of providing lifts to three towers of differing height are likely to be daunting. Mr Dickson said that he had not given the detailed planning of the towers any consideration.

38 Beyond the fact that it is smaller (and small is usually considered more beautiful than large), I see no urban design or town planning imperatives that would recommend Mr Dickson’s tower as better than the one proposed by the applicant. The site is in a part of Sydney where there are many tall buildings with high FSRs. The planning instrument permits this. The fact that Mr Dickson’s alternative proposal is of smaller bulk is not sufficient to convince the Court that the proposed envelope should be refused.


      Impact on Pitt and Campbell towers

39 The Court heard the objections of Ms Alison Wong (Unit 77 Pitt Tower); Mr Ju Xian He (Unit 117 Pitt Tower); Ms Debra Rukiah (level 23 Pitt Tower). It inspected the apartments of Ms Herlina Susilo, (unit 81 Pitt Tower); Mr Spiros Papadakis, (Unit 112 Campbell tower); Mr Ken and Mrs Jayne Wales (Unit 122 Pitt Tower); Mr Bill Sabloch (Unit 136 Pitt Tower); Mr Lie Ping Li (Unit 535 Campbell tower); and Mr Alex Nicolacopoulos (Unit 601 Campbell tower).

40 The apartments in the Campbell tower are at least 26m from the proposed building, which will have blank walls towards Campbell tower. It was common ground among the experts that the impact on the apartments of Campbell tower is acceptable. Mr Dickson and Ms Bunting said that they were concerned about the impact on a communal open space that is used by the occupants of Campbell tower. In my opinion, this concern has no validity. The communal area will not be overlooked by the proposal, though it is completely overlooked by its own tower. The existence of the blank wall of another tall building in the vicinity does not, in the context of CBD living, constitute an unacceptable impact.

41 I turn to the impact on Pitt Tower. That impact is two-fold: the proposal may overlook some windows of the Pitt Tower apartments and block their outlook towards the south. The impact on outlook is significant and is likely to reduce the amenity of the southern apartments of Pitt Tower. Despite the above, in my opinion the impact does not justify refusal because the amenity that it reduces is gained from the underdevelopment of the subject site. The amenity could be sustained only at the cost of the subject site’s reasonable development potential. Notwithstanding the above I derive some comfort from the fact that, for heritage reasons, the tower will set back 10m from Pitt Street, thereby reducing the “blocking” impact on Pitt Tower.

42 The titles of all apartments in Pitt Tower with windows closer than 6m to the boundary are burdened by a positive covenant. On one reading, the covenant requires the owner to block up the window at the council’s direction, should the site to the south (ie the subject site) be redeveloped. However, the covenant is poorly worded and could be interpreted differently. Whatever the interpretation, a purchaser of those apartments would (or should) be aware that the windows to the south, being on or close to the boundary, are vulnerable. In my opinion, the loss of outlook to the south from the Pitt Tower apartments is not a reason for refusing the application.

43 I turn to the impact on privacy, which affects the southwest and southeast apartments in Pitt Tower. The CSDCP requires a distance of 6m from boundaries for principal windows up to a height of 45m. Above 45m it states that a minimum setback of 12m is desirable. The CSDCP defines principal windows as the main windows of a living room or a bedroom. The CSDCP does not suggest setbacks for walls without principal windows. Presumably these may be built on the boundary.

44 The proposal satisfies the CSDCP, except to the extent that it provides only 6m setbacks for principal windows above 45m, rather than the desirable 12m. Despite this compliance (or partial compliance) the Pitt Tower objectors objected strongly to the north-facing windows in the proposal on the basis that they were too close to them. Ms Bunting suggested that the proposal should set back 12m from the boundary wherever there are windows, whether or not they are above 45m and whether or not they are principal windows. Given that Ms Bunting suggested a more rigorous requirement than the CSDCP and Ms Robinson applied a less rigorous test, it is useful for the Court to establish the principles against which the impact on privacy can be tested.


      Planning principle: protection of visual privacy

45 When visual privacy is referred to in the context of residential design, it means the freedom of one dwelling and its private open space from being overlooked by another dwelling and its private open space. Most planning instruments and development control plans acknowledge the need for privacy, but leave it to be assessed qualitatively. Numerical guidelines for the separation of dwellings exist in the Australia-wide guideline, AMCORD; as well is in the NSW-specific Residential Flat Design Code attached to SEPP 65. AMCORD recommends a separation of 9m between habitable rooms. The Residential Flat Design Code recommends increasing separation between buildings as they get taller. For buildings up to three storeys, it suggests 12m between habitable rooms and balconies, 9m between a habitable and non-habitable room, and 6m between non-habitable rooms. For tall buildings (such as the proposal) it suggests 24m between habitable rooms, 18m between habitable rooms and non-habitable rooms, and 12m between non-habitable rooms.

46 Generalised numerical guidelines such as above, need to be applied with a great deal of judgment, taking into consideration density, separation, use and design. The following principles may assist.


· The ease with which privacy can be protected is inversely proportional to the density of development. At low-densities there is a reasonable expectation that a dwelling and some of its private open space will remain private. At high-densities it is more difficult to protect privacy.


· Privacy can be achieved by separation. The required distance depends upon density and whether windows are at the same level and directly facing each other. Privacy is hardest to achieve in developments that face each other at the same level. Even in high-density development it is unacceptable to have windows at the same level close to each other. Conversely, in a low-density area, the objective should be to achieve separation between windows that exceed the numerical standards above. (Objectives are, of curse, not always achievable.)


· The use of a space determines the importance of its privacy. Within a dwelling, the privacy of living areas, including kitchens, is more important than that of bedrooms. Conversely, overlooking from a living area is more objectionable than overlooking from a bedroom where people tend to spend less waking time.


· Overlooking of neighbours that arises out of poor design is not acceptable. A poor design is demonstrated where an alternative design, that provides the same amenity to the applicant at no additional cost, has a reduced impact on privacy.


· Where the whole or most of a private open space cannot be protected from overlooking, the part adjoining the living area of a dwelling should be given the highest level of protection.


· Apart from adequate separation, the most effective way to protect privacy is by the skewed arrangement of windows and the use of devices such as fixed louvres, high and/or deep sills and planter boxes. The use of obscure glass and privacy screens, while sometimes being the only solution, is less desirable.


· Landscaping should not be relied on as the sole protection against overlooking. While existing dense vegetation within a development is valuable, planting proposed in a landscaping plan should be given little weight.


· In areas undergoing change, the impact on what is likely to be built on adjoining sites, as well as the existing development, should be considered.

47 The application of the above principles to Pitt Tower suggests that the living room windows of this proposal should not be closer than 12m from living room windows of Pitt Tower. The west section of the north wall of the proposal is 3m from the boundary and about 6m from the south-facing living room windows of Pitt Tower. This is unacceptable, unless the windows are at above eye level. In this case, the Court has no information on the relative floor levels between the Pitt Tower and the proposed development. It is therefore appropriate to impose a condition that the west section of the north wall does not contain any windows. If a Stage 2 application can demonstrate that above eye level windows can protect the privacy of the Pitt Tower dwellings, the condition may be changed.

48 The east section of the north wall is set back 6m from the north boundary. The corner of the Pitt Tower building comes to within 200mm of the boundary. However, the windows of the Pitt Tower apartments are skewed towards the east, so the potential for overlooking is significantly reduced. Because of the skewing, the impact on privacy is acceptable.

49 I turn to the impact on the penthouse apartments of Pitt Tower. The height of the proposal is approximately at the ceiling level of these apartments, so the adverse impact would be significant. My remarks above that the Pitt Tower apartments enjoy an outlook to the south because the subject site is underdeveloped, do not apply to the same extent to the penthouse apartments. The penthouse apartments, being at the top of Pitt Tower have a more justifiable expectation to retain their outlook than the apartments at lower levels. Moreover, the outlook of the penthouse floor can be retained by the loss of one floor from the proposal, rather than the drastic reduction in development potential envisaged by Mr Dickson’s alternative envelope. For this reason the approval is subject to a condition reducing the height of the proposal by one floor, or 3m.

50 I turn to the south-facing windows in that part of the proposal that adjoins the Chamberlain Hotel. Mr George Smith, a town planner retained by the owner of the hotel, said that the roof of the hotel accommodates noisy equipment. Ms Robinson suggested that about three floors above the roof of the hotel should not have south-facing windows.

51 In addition there is the question of what happens if the hotel is extended, or if it burns down completely and is replaced by a new building. The last of the planning principles established above suggests that the Court should consider the impact on what is likely to be built on adjoining sites. The poor example of windows close to the boundary in Pitt Tower suggests that there should be no windows closer than 6m to the boundary in this proposal, at least up to the height to which the hotel site may be redeveloped. Ms Robinson thought that this would be five-storeys. Ms Bunting thought it would be 14 storeys. Given that the subject site can achieve 26 levels, Ms Bunting’s estimate seems more realistic than Ms Robinson’s. This suggests a condition requiring no windows closer than 6m to the south boundary in that section of the south wall that adjoins the Chamberlain Hotel, up to level 14.


      Internal amenity

52 The council’s experts’ concern about internal amenity related to the small size of apartments and to the lack of cross-ventilation in some apartments. Given that the Stage 1 approval relates to the envelope only and that Stage 2 will be the subject of a design competition, I do not think that questions of internal amenity are appropriate in a Stage 1 application. This is not to say that the council should not make its concerns known about the amenity of the apartments in the indicative layout, only that these concerns are not a reason for refusal. An expression of the concerns is likely to be of help to the designers who take part in the Stage 2 competition.


      The amended envelope

53 At the conclusion of the hearing I invited the applicant to consider a revised envelope that sets back 10m from Pitt Street and reduces the height by one floor. The applicant provided drawings demonstrating the new envelope and calculated the FSR to be 12.55:1 instead of the previous FSR of 13:1. The eliminated floor was one of the penthouse floors, presumably because the applicant lost less floor space this way than by eliminating a typical floor. In addition, the applicant relocated the communal recreation area to the basement, also in an attempt to minimise the loss of floor space due to amendments suggested by the Court.

54 Ms Bunting commented in writing on the amended envelope, making five points. First, the units in the west façade were too small. In my opinion, this should be addressed in Stage 2. Second, windows in the northwest elevation would create amenity problems for both the residents of the proposal and of Pitt Tower. I have dealt with this issue above, coming to the conclusion that the skewed nature of the Pitt Tower windows renders the relationship acceptable. (I agree with Ms Bunting that it is not ideal, but how can the council expect an ideal relationship between the buildings, having allowed Pitt Tower to be built within 200mm of the south boundary?) Third, the amendment should have removed a typical level rather than the penthouse level, which is smaller. I do not think that this criticism is valid. The reason for the removal of one floor is to avoid the penthouse of the Pitt Tower being blocked by the proposal. This is achieved by the lowering of the height by 3m. Fourth, it was not appropriate to consider details of the location of the communal recreation area in a Stage 1 application. If that is so, then the applicant will have to justify the appropriateness of the new location in the Stage 2 application. Fifth, the relocation of the recreation area to the basement was unsatisfactory. This comment is inconsistent with Ms Bunting’s fourth point.

55 Ms Bunting calculated the new FSR to be 11.7:1. I assume that this is based on the deletion of a typical floor rather than a penthouse floor and leaving the recreation area in its current position. I therefore accept that the FSR of the amended envelope is 12.55:1 or, in rounded figures, 12.5:1.

56 For the above reasons the appeal is upheld.


      Demolition of buildings on site

57 It is normal practice for the council not to allow demolition until there is a valid consent and construction certificate for the replacing development. The applicant argued that it needed to demolish the existing garage in the centre of the site and the Hazel Moore building in order to fulfil the council’s condition on soil contamination. For this reason the Stage 1 consent allows the demolition of those two buildings only.

      Orders

1. The appeal is upheld.

2. Stage 1 development application to demolish the existing buildings and receive approval for a building design envelope, a maximum Floor Space Ratio (FSR) of 12.5:1 and commercial, retail, residential and associated parking use of lot 1 DP 767757, lot 1 DP 767752 and lot 1 DP 77787, known as 420-426 Pitt Street and 36-38 Campbell Street, Sydney is determined by the granting of consent. The consent for demolition extends only to the existing garage in the centre of the site and to the Hazel Moore building. The consent is subject to the conditions in Annexure A.

3. The exhibits are returned except Exhibits C, N and O.


      _________________
      Dr John Roseth
      Senior Commissioner
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