Modog Pty Ltd v North Sydney Council

[2018] NSWLEC 1420

Land and Environment Court

New South Wales

Medium Neutral Citation:	Modog Pty Ltd v North Sydney Council [2018] NSWLEC 1420
Hearing dates:	6-7 August 2018
Date of orders:	10 August 2018
Decision date:	10 August 2018
Jurisdiction:	Class 1
Before:	O’Neill C
Decision:	1. The appeal is dismissed. 2. Development Application No. 61/17 for the adaptive reuse of a commercial building to a mixed use including the addition of a fourth storey and roof terraces over, at 35 Myrtle Street, North Sydney, is refused. 3. The exhibits, other than exhibits 1 and A, are returned.
Catchwords:	DEVELOPMENT APPLICATION: adaptive reuse of an existing commercial building to a mixed use; addition of a storey and roof terraces above; exceedance of the height of buildings development standard and non-compliance with the non-residential floor space ratio development standard; whether the elements that form the roof terraces are architectural roof features within the meaning of clause 5.6 of the North Sydney Local Environmental Plan 2013; amenity impacts on neighbouring properties.
Legislation Cited:	Environmental Planning and Assessment Act 1979 Land and Environment Court Act 1979 North Sydney Development Control Plan 2013 North Sydney Local Environmental Plan 2013
Cases Cited:	William Karavelas v Hurstville City Council [2015] NSWLEC 1095
Category:	Principal judgment
Parties:	Modog Pty Ltd (Applicant) North Sydney Council (Respondent)
Representation:	Counsel: Ms J. Reid, barrister (Applicant) Mr T. To, barrister (Respondent)   Solicitors: Pikes & Verekers Lawyers (Applicant) North Sydney Council (Respondent)
File Number(s):	2017/250690
Publication restriction:	No

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. 61/17 for the adaptive reuse of an existing three storey commercial building to a mixed use, including the addition of a fourth storey and roof terraces over (the proposal), at 35 Myrtle Street, North Sydney (the site), by North Sydney Council (the Council).

2. The appeal was subject to mandatory conciliation on 19 February 2018, in accordance with the provisions of s 34 of the Land and Environment Court Act 1979 (LEC Act). As agreement was not reached, the conciliation conference was terminated, pursuant to s 34(4) of the LEC Act.

3. Leave was granted by the Court on 29 May 2018 for the applicant to rely on an amended proposal and leave was unopposed and granted by the Court during the hearing for the applicant to rely on a further amended proposal (Exhibit A).

Issues

4. The Council’s contentions can be summarised as:

• The increase in the height of the existing building will have a detrimental impact on the identified heritage significance and character of the heritage conservation area and the adjoining heritage conservation area.

• The proposed building height is excessive.

• The proposal results in amenity impacts on neighbouring development.

• The elements of the roof terraces are not architectural roof features within the meaning of cl 5.6 of North Sydney Local Environmental Plan 2013 (LEP 2013).

• There is insufficient non-residential floor space provided by the proposal.

• The proposal results in unacceptable internal amenity for future occupants.

The site and its context

5. The site is located on the southern side of Myrtle Street, between West Street and Eden Street, North Sydney. The site is generally rectangular in shape and has an area of 404.9m2. There is a three storey commercial building on the site with parking at the rear of the ground floor, beneath the upper levels of the existing building, accessed via a shared right of way from Myrtle Street on the eastern side of the site and adjacent to the eastern boundary. The site falls gently towards the rear.

6. To the east of the site are the rear boundaries of detached and semi-detached one and two storey period dwellings fronting West Street. To the west of the site are two period cottages and there is a four storey mixed use development fronting Eden Street behind the cottages.

The proposal

7. The proposal consists of the adaptive reuse of the existing three storey commercial building including the addition of a fourth storey and roof terraces on the roof of the additional storey, as follows:

• Ground floor: commercial accommodation, garbage rooms, residential entry foyer and parking at the rear of the site in car stackers for a total of 7 cars, including one accessible parking space;

• First, second and third floors: Units 2 – 6, each three storey units with entry on the first floor and internal access to the upper floors and a roof terrace for each unit with an acrylic dome over the stair access for covered access to the roof terrace. Unit 2 has an outdoor terrace at the northern end of the Unit 1 is a two storey accessible unit located at the northern end of the building, with an internal lift.

• The third floor is an addition to the existing building and is setback from the façade of the existing building along the eastern side and at the northern end.

Planning framework

8. The relevant aim of LEP 2013 in relation to residential development is to ensure that new development does not adversely affect residential amenity in terms of visual and acoustic privacy, solar access and view sharing, at cl 1.2(2)(c)(i).

9. The site is zoned B4 Mixed Use pursuant to LEP 2013 and the proposal is permissible with consent. The objectives of the B4 zone, to which regard must be had, are:

• To provide a mixture of compatible land uses.

• To integrate suitable business, office, residential, retail and other development in accessible locations so as to maximise public transport patronage and encourage walking and cycling.

• To create interesting and vibrant mixed use centres with safe, high quality urban environments with residential amenity.

• To maintain existing commercial space and allow for residential development in mixed use buildings, with non-residential uses concentrated on the lower levels and residential uses predominantly on the higher levels.

10. The height of buildings development standard for the site is 13m (Height of Buildings Map Sheet HOB_001 LEP 2013). The most relevant of the objectives for the height of buildings development standard are:

(d) to maintain privacy for residents of existing dwellings and to promote privacy for residents of new buildings,

(e) to ensure compatibility between development, particularly at zone boundaries,

(f) to encourage an appropriate scale and density of development that is in accordance with, and promotes the character of, an area.

11. There is no floor space ratio (FSR) development standard for the site (Floor Space Ratio Map FSR_001 LEP 2013). There is a non-residential FSR development standard for the site of 0.5:1 (Non-Residential Floor Space Ratio Map Sheet LCL_001 LEP 2013). The objectives for the non-residential FSR at cl 4.4A are:

(a) to provide for development with continuous and active street frontages on certain land in Zone B1 Neighbourhood Centre, Zone B4 Mixed Use and Zone SP2 Infrastructure,

(b) to encourage an appropriate mix of residential and non-residential uses,

(c) to provide a level of flexibility in the mix of land uses to cater for market demands,

(d) to ensure that a suitable level of non-residential floor space is provided to promote employment and reflect the hierarchy of commercial centres.

12. Clause 4.6 of LEP 2013 provides for exceptions to development standards, subject to the terms of cl 4.6.

13. Clause 5.6 of LEP 2013 permits variations to maximum building height standards for architectural roof features and is in the following terms:

(1) The objectives of this clause are as follows:

(a) to permit variations to maximum building height standards for roof features of visual interest,

(b) to ensure that roof features are decorative elements and that the majority of the roof is contained within the maximum building height standard,

(c) to maintain solar access to new and existing buildings, public reserves and streets,

(d) to promote the retention and, if appropriate, sharing of existing views.

(2) Development that includes an architectural roof feature that exceeds, or causes a building to exceed, the height limits set by clause 4.3 may be carried out, but only with development consent.

(3) Development consent must not be granted to any such development unless the consent authority is satisfied that:

(a) the architectural roof feature:

(i) comprises a decorative element on the uppermost portion of a building, and

(ii) is not an advertising structure, and

(iii) does not include floor space area and is not reasonably capable of modification to include floor space area, and

(iv) will cause minimal overshadowing, and

(b) any building identification signage or equipment for servicing the building (such as plant, lift motor rooms, fire stairs and the like) contained in or supported by the roof feature is fully integrated into the design of the roof feature.

14. The site is located within the CA09 Holtermann Estate C Heritage Conservation Area (Holtermann Estate C HCA) and the site is adjacent to the western boundary of the CA18 Holtermann Estate D Heritage Conservation Area. The site adjoins two heritage items, 58 and 58A West Street (items 1004 and 1005, Schedule 5, LEP 2013).

15. Clause 5.10(4) of LEP 2013 requires the effect of the proposed development on heritage significance to be considered before granting consent, as follows:

The consent authority must, before granting consent under this clause in respect of a heritage item or heritage conservation area, consider the effect of the proposed development on the heritage significance of the item or area concerned. This subclause applies regardless of whether a heritage management document is prepared under subclause (5) or a heritage conservation management plan is submitted under subclause (6).

16. At cl 6.12A of LEP 2013, residential flat buildings in the B4 zone must be part of a mixed use development and no part of the ground floor of the building that is facing a street is to be used for residential accommodation. Mr To submits that the Council is satisfied that the proposal complies with the terms of this clause.

17. The proposal is subject to the relevant provisions of North Sydney Development Control Plan 2013 (DCP 2013). The relevant general objectives for residential development in Part B, Section 1 – Residential Development of DCP 2013 are as follows:

…

O4 does not have adverse impacts on residential amenity or environmental quality;

O5 is in context with surrounding development;

…

O8 is consistent with the character that is described in the relevant area character statements;

18. Part B, Section 1 – Residential Development, 1.3.10, includes the following in relation to visual privacy:

Objectives

O1 To ensure that existing and future residents are provided with a reasonable level of visual privacy.

Provisions

Building Separation

P1 Provide visual separation between any non-residential use and dwellings.

P2 Residential flat buildings are to provide adequate separation between habitable rooms, balconies and non-habitable rooms, consistent with SEPP 65. The relevant building separation distances are reproduced in Table B-1.4.

Windows

P3 Locate windows to avoid direct or close views into the windows, balconies or private open space of adjoining dwellings.

P4 Where windows are located with a direct outlook to windows of an adjacent dwelling, the windows must be provided with a minimum sill height of 1.5m, or use fixed obscure glazing or other privacy devices.

P5 Provide suitable screening structures to minimise overlooking from proposed dwellings to the windows, balconies or private open space of adjacent dwellings, to windows, balconies or private open space of dwellings within the same development.

Decks, Patios and Terraces

P6 Limit the width and depth of any deck, patio or terrace located greater than 1m above ground level (existing) where privacy and loss of views is an issue and consider using screen devices where relevant.

P7 Private or communal open spaces such as terraces, patio, gardens and the like are not permitted on rooftops or garage roofs.

P8 Despite P7 above, private or communal open spaces on roofs may be considered, but only if:

(a) the space is designed such that there is no potential for existing or future overlooking of the space and subsequent noise and privacy issues;

(b) the space is setback at least 1m from the extent of the external enclosing walls to the floor level below; and

(c) the space does not exceed 50% of the floor area of the storey immediately

below or 18m2 , whichever is the lesser; and

(d) there is no other appropriate ground level space for outdoor recreation off a primary living room.

19. Part B, Section 1 – Residential Development, 1.5.10, includes the following in relation to private and communal open space:

Objectives

O1 To ensure residents are provided with a reasonable level of outdoor amenity.

O2 To ensure private open space is of sufficient size to be useable.

Provisions

…

P3 Where private open space areas are to be provided at ground level, it must have a minimum dimension of 4m, or a minimum dimension of 2m where provided above ground level.

P4 Private open spaces should be located such that they are directly accessible off a main living area of the dwelling.

20. Part B, Section 13 – Heritage and Conservation, 13.6, relevantly includes the following:

Uncharacteristic items are buildings and structures that are intrusive and detract from the character and significance of the heritage conservation area. They are not suitable benchmarks for new developments. Replacement buildings are to achieve a neutral or contributory status.

13.6.1 General Objectives

O1 Ensure that new development is designed to retain and complement the character and significance of the conservation area (refer to Part C of this DCP for a description of the significance of the heritage conservation area).

…

O4 Encourage change that will remove uncharacteristic items or reduce the extent of their intrusion.

13.6.2 Form, massing and scale

Objectives

O1 To ensure new development has a compatible and complementary building form and scale to that which characterises the conservation area.

O2 To maintain and enhance streetscape character.

Provisions

P1 Development should reflect the bulk, mass, scale, orientation, curtilage and setbacks of surrounding heritage and contributory items.

P2 Development should recognise and complement the predominant architectural scale and form of the area.

…

P6 Achieve an improved outcome to uncharacteristic items by removing the uncharacteristic or intrusive element or incorporating changes to improve the contextual design and visual impact of the site.

…

P9 New work may adopt a contemporary character, provided the development is not likely to have a detrimental impact on the characteristic built form of the area, particularly in terms of bulk, scale, height, form or materials.

13.6.4 Additional storeys and levels

Objectives

O1 To ensure that the streetscape and context of the heritage conservation area are respected.

Provisions

P1 Additional storeys or upper level additions are not supported in heritage conservation areas.

P2 Despite P1, the consent authority may permit an additional storey or upper level addition, but only if the applicant can demonstrate:

(a) that the resultant building will exhibit a similar scale to that in the vicinity of the site, and

(b) that the design respects the heritage characteristics of the area.

(c) that the additional storey does not alter the form or scale of any heritage or contributory items.

21. The area character statement in DCP 2013 for the Holtermann Estate C HCA, at Part C, Section 3, includes the following statement of significance:

The Holtermann Estate C Conservation Area is significant:

(a) For its late 19th and early 20th century residential character that is characterised by single storey, detached and semi-detached dwelling houses of modest scale in a mixture of late Victorian and early Federation styles.

(b) As an area that represents the working class residential development of North Sydney at the turn of the century.

22. Characteristic buildings in the Holtermann Estate C HCA are identified as detached, late Victorian, Federation and Edwardian semi-detached dwelling houses, at 3.6.5.

Public submissions

23. Eight resident objectors provided evidence at the commencement of the hearing onsite. The Court, in the company of the parties and their experts, viewed the site from a number of apartments within the mixed use building at 13 Eden Street, to the south-west of the site. The concerns of the residents objectors can be summarised as:

• The proposal will result in a detrimental impact on the heritage significance of the heritage conservation areas;

• The change in use of the building will result in additional amenity impacts, including privacy and noise impacts, on the nearby properties;

• The increase in height of the existing building and the outdoor terraces will further exacerbate the amenity impacts on neighbouring properties;

• The existing building is of no architectural value and is intrusive in the heritage conservation area so it should be demolished, not adaptively reused;

• The proposal will result in amenity impacts on the apartments in the adjoining residential apartment building and the proposal will obstruct morning sunlight from the east to those apartments.

Expert evidence

24. The applicant relied on the expert evidence of Mr James Lovell (planning) and Mr John Oultram (heritage). The Council relied on the expert evidence of Mr George Youhanna (planning) and Ms Lisa Trueman (heritage).

Contravention of the Non-Residential FSR development standard

25. The proposal provides less than the 0.5:1 FSR for non-residential floor space shown on the Non-Residential Floor Space Ratio Map in LEP 2013 and thereby contravenes the development standard in cl 4.4A(2) of LEP 2013.

26. The applicant provided a written request seeking to justify the contravention of the non-residential FSR development standard, pursuant to cl 4.6(3) of LEP 2013 (Exhibit D). The proposal includes a commercial tenancy at the Ground Floor of 123m2 (Exhibit A, DA101). With a site area of 404.9m2, the non-residential floor area required by cl 4.4A(2) is 202.45m2. The numerical shortfall in non-residential floor area is 79.45m2. The applicant’s written request justifies the shortfall in non-residential floor area on the following bases:

• The nature of recent developments in the vicinity of the site reflects a diminished demand for non-residential floor space within the immediate vicinity of the site;

• The retention of the existing base building structure, coupled with the need to provide an appropriate provision of off-street car parking and other facilities for the proposal limits the ability to provide any additional non-residential floor space at ground floor level.

• The additional non-residential floor space required by the development standard would have to be provided on an upper level and this would not contribute to an active street frontage.

27. In order for there to be power to grant development consent to a proposal that contravenes a development standard in LEP 2013, I must be satisfied that the proposal is consistent with the objectives of the development standard and the objectives for development within the zone (cl 4.6(4)(a)(ii) of LEP 2013) and that the applicant's written request has adequately addressed that compliance with the development standard is unreasonable or unnecessary in the circumstances (cl 4.6(3)(a) of LEP 2013) and that there are sufficient environmental planning grounds to justify contravening the development standard (cl 4.6(3)(b) of LEP 2013).

28. I accept Mr To’s submission that the claim by Mr Lovell that there is a diminished or lack of demand for non-residential floor space within the immediate vicinity of the site is not substantiated by any documentary evidence.

27. I am satisfied that the written request has adequately addressed that compliance with the non-residential floor space development standard in LEP 2013 is unreasonable in the circumstances of this proposal and that the proposal is consistent with the objectives of the development standard and the zone and that there are sufficient environmental grounds to justify contravening the development standard, for the following reasons:

• The location of the commercial tenancy on the ground floor, including entry and a frontage to Myrtle Street, satisfies the objectives of the non-residential FSR development standard to activate the street frontage in the B4 zone.

• The layout, location and facilities provided by the commercial tenancy are consistent with the development standard’s objectives of providing commercial accommodation that is potentially viable and flexible for a range of possible tenancies.

• The provision, location and layout of the commercial tenancy are consistent with the objectives of the B4 zone.

• The proposal is for the adaptive reuse of the existing building and the location of the commercial tenancy is practical and viable within the constraints dictated by the existing structure.

• The parking area at the rear of the site is the most practical solution for onsite parking, given the narrow width of the site and the retention of the existing building. The parking area at the rear of the site is a reasonable constraint to the extension of the commercial tenancy on the Ground Floor.

Architectural Roof Features

30. The applicant relies on cl 5.6 of LEP 2013 for the roof elements of the proposal that exceed the height of buildings development standard for the site of 13m. Ms Reid submits the following regarding those elements that exceed the height of buildings development standard:

“The architectural roof feature comprises sculptural roof gardens including planters, balustrading and domed roofs. The majority of the roof feature is below the height limit, with the exception of the top most portion of the planters and balustrade at the rear of the building (see plan DA 202D). The exceedance is up to a height of 1.4m for the domes.

31. The top of the planter and balustrade to unit 6 at the rear of the site are at RL101.28 in the revision E architectural drawings (Exhibit A), 1m above the roof level and over 13m above the existing ground level shown as RL88.12 (Exhibit A, DA201E).

32. LEP 2013 does not define “architectural roof feature”, however an architectural roof feature must comprise a decorative element, at cl 5.6(3)(a)(i), although, consistent with my finding in William Karavelas v Hurstville City Council [2015] NSWLEC 1095 [31], .that does not exclude it also having a functional purpose, as envisaged by cl 5.6(3)(b) of LEP 2013, if it is fully integrated into the design of the roof feature.

33. I am not satisfied that the top most portion of the planters and balustrade at the rear of the building do constitute an architectural roof feature within the meaning of cl 5.6 of LEP 2013, because they are both elements that are independent of the roof and are not integrated into the design of a roof feature, but are instead designed for the express purpose of defining and containing an area of private open space above the roof of the proposal. Given this finding, it is not necessary to determine whether the acrylic domes, which each exceed the height of buildings development standard of 13m, constitute architectural roof features.

34. The non-compliance with the height of buildings development standard must therefore be dealt with under cl 4.6 of LEP 2013.

Contravention of the Height of Buildings Development Standard

35. The applicant provided a written request seeking to justify the contravention of the height of buildings development standard, pursuant to cl 4.6(3) of LEP 2013 (Exhibit C). The numerical exceedance of the height of buildings development standard is a maximum of 1.15m at the top of the acrylic dome to unit 6 (Exhibit A, DA 201 eastern elevation). The applicant’s written request justifies the exceedance of the height of buildings development standard on the following bases:

• The elements that constitute the five roof terraces do not have any amenity impacts on neighbouring development;

• The roof terraces are setback from the sides of the building to prevent any proximate overlooking to the east and the planter beds occupy the western portion of the oval shaped elements;

• The proposal will improve the architectural appearance of the existing building and contribute to the emergence of the locality as a high quality mixed use precinct;

• The oval shaped roof terraces occupy less than 27% of the site area;

• The proposal is below the height of the adjoining building to the west with the domes extending to the level of the adjoining parapet;

• The proposal has a high level of design quality and affords a good level of amenity for future occupants.

36. I am not satisfied that the written request has adequately addressed that compliance with the height of buildings development standard in LEP 2013 is unreasonable or unnecessary in the circumstances of this proposal and I am not satisfied that the proposal is consistent with the objectives of the development standard to maintain privacy for residents of existing dwellings and to ensure compatibility between development, for the following reasons:

• The provision of roof terraces with a finished floor level 1m below the height of buildings development standard places people on an additional fifth level of the proposal with many of the consequent amenity impacts of an additional level.

• A person standing on any of the roof terraces will be able to view the rear elevations of the dwellings fronting West Street on the adjoining properties to the east of the site and this is an impact on the amenity of those properties.

• A person standing on some of the roof terraces will be able to view some parts of the elevations of the residential apartments at 13 Eden Street through or over the foliage in the planter on the roof terrace.

• The amenity of the roof terraces will be compromised without shading structures and it is likely that the future occupants of the proposal will use shading devices on their terrace.

• The provision of roof terraces coupled with the desire to reduce the overall height of the proposal in successive iterations of the proposal has resulted in a substandard floor to ceiling level of 2.4m in all the living areas of units in Exhibit A, which results in compromised internal amenity within all the units. The sketched section marked exhibit P increased the floor to ceiling height on the third floor to 2.7m by including a 100mm thick slab between levels, but left unit 1 with a very small living area and a floor to ceiling height of 2.4m.

• The adaptive reuse of the existing building and its improved architectural expression is of merit, but the adaptive reuse of the existing building it is not dependent on the addition of five roof terraces.

37. I accept the applicant’s submission that the retention and adaptive reuse of the existing building is meritorious and that its adaptive reuse offers an opportunity to achieve an improved outcome by reducing the extent of the intrusion of this uncharacteristic item on the character of the Holtermann Estate C and D HCAs. I accept Mr Oultram’s evidence that the reduction of the extent of the intrusion of the existing building on the character of the HCA cannot be achieved by seeking to relate a mid-twentieth century infill, three storey commercial building to the early twentieth century period cottages around it, because the two are very different typologies; but that it can be achieved by responding to the constraints and opportunities of the existing structure to sympathetically adapt it to a decorous and contemporary infill building that does not detract from the overall character of the HCAs.

38. The Council’s contention that the four storey proposal is incompatible with the low scale residential dwellings immediately to the east particularly because the site is located at the zone boundary is contrary to the Council’s height of building development standard for the site, particularly given the long and relatively narrow north-south configuration of the site and the location of the fourth level with a significant side setback to the eastern boundary. Had the Council been concerned about the compatibility between a four storey building on the western portion of the site and the residential dwellings immediately to the east, presumably the Council would have taken the opportunity to constrain the potential height of development on this site during the strategic planning stage that informed the Local Environmental Plan, by reducing the height of buildings development standard for this site when compared to the properties to the west of the site in the B4 zone. I accept and prefer Mr Oultram’s evidence that the HCAs have as a backdrop a number of multi-storey buildings and that the scale of the existing building is not necessarily the reason for its uncharacteristic ranking. In my view, the additional of a level to the existing building to achieve the height of buildings development standard for the site does not necessarily constitute an unacceptable impact on the character of the HCA.

39. I am not satisfied that the proposal provides a reasonable level of internal amenity for future residents, for the following reasons:

• Only two of the six units provide at least 3 hours of solar access to living areas between 9am and 3pm on the winter solstice.

• The position of the lift overrun within the northern outdoor terrace of unit 2 (or unit 1) is an inelegant solution and significantly erodes the amenity of the north facing terrace on the third floor.

• The only access to the upper two levels of each apartment, including the living rooms on the upper most level of the three storey units, is via a narrow internal stair with winders which will frustrate furniture deliveries.

• The amenity of the accessible unit 1 is compromised by a very small living area 3m wide and a low ceiling height of 2.4m and by having its only access to private outdoor space on the level above, if the northern terrace was reallocated to unit 1.

Conclusion

40. I am not satisfied that the applicant’s written request adequately justifies the contravention of the height of buildings development standard in LEP 2013 that compliance with the development standard is unreasonable or unnecessary in the circumstances of this case. The contravention of the height of buildings development standard by elements of the roof terraces will result in unacceptable amenity impacts on neighbouring development and the provision of roof terraces, coupled with the number of units and the desire to reduce the overall height of the proposal, results in poor internal amenity for future residents.

Orders

41. The orders of the Court are:

1. The appeal is dismissed.

2. Development Application No. 61/17 for the adaptive reuse of a commercial building to a mixed use including the addition of a fourth storey and roof terraces over, at 35 Myrtle Street, North Sydney, is refused.

3. The exhibits, other than exhibits 1 and A, are returned.

____________

Susan O’Neill

Commissioner of the Court

**********

Decision last updated: 10 August 2018