Sydney Project Group Pty Ltd v Cumberland Council

[2017] NSWLEC 1500

Land and Environment Court

New South Wales

Medium Neutral Citation:	Sydney Project Group Pty Ltd v Cumberland Council [2017] NSWLEC 1500
Hearing dates:	13 April 2017
Date of orders:	12 September 2017
Decision date:	12 September 2017
Jurisdiction:	Class 1
Before:	Chilcott C
Decision:	The Court orders:  (1) The appeal is dismissed. (2) Development consent is refused for DA 5-2017 for the creation of a stratum subdivision in the airspace above the currently approved development at 34-40 John St, Lidcombe. (3) The exhibits are returned, with the exception of Exhibits 1 and A.
Catchwords:	Development Application - stratum subdivision of airspace above an approved development - whether development is permissible within the proposed subdivision - subdivision requires purpose - Draft Auburn and Lidcombe Town Centres Strategy
Legislation Cited:	Environmental Planning and Assessment Act 1979 Land and Environment Court Act 1979 Auburn Local Environmental Plan 2010 Auburn Development Control Plan 2010
Cases Cited:	Parrott v Kiama [2004] NSWLEC 77 Penrith Lakes Development Corporation v Penrith City Council [2015] NSWLEC 1329 Seraphina Bell Pty Ltd v Willoughby Municipal Council (No 2) (1967) 14 LGRA 209
Texts Cited:	Nil
Category:	Principal judgment
Parties:	Sydney Project Group Pty Ltd (Applicant) Cumberland Council (Respondent)
Representation:	Counsel: P Jayne (Applicant) P Clay (Respondent) Solicitors: Madison Marcus Law Firm (Applicant) Wilshire Webb Staunton Beattie (Respondent)
File Number(s):	2017/51349
Publication restriction:	Nil

Judgment

Background

1. COMMISSIONER: Sydney Property Group (the applicant) has appealed the deemed refusal by Cumberland Council (the respondent) of its development application (DA-5/2017) for a stratum subdivision of airspace above its approved development in Lidcombe.

2. The development application proposes the creation through subdivision of a stratum development lot (hereafter referred to as the “Lot 3 stratum subdivision”) comprising two elements:

1. the airspace above an approved mixed use building development to enable development to a height of 55m; and

2. part of the basement car parking in the current approved development. This would consist of an estimated 37 car parking spaces that could be allocated to the proposed strata subdivision and facilitate future car parking requirements associated with a potential future development application within that strata.

3. The appeal is made pursuant to s 97(1) of the Environmental Planning and Assessment Act 1979 (the ‘EP&A Act’).

4. The Subject Site is located at 36 to 44 John Street, Lidcombe (formally identified as Lot 100 in DP1224834). It has a main frontage to John Street and there are secondary frontages to Ann St and Board Street.

5. The appeal was the subject of a conciliation conference under s 34 of the Land and Environment Court Act 1979 (the ‘LEC Act’) on 20 March 2017. An inspection of the Subject Site was undertaken as part of the conciliation conference.

6. As the parties were unable to resolve the issues during the s 34 conciliation, the conciliation was terminated. The parties consented to me disposing of the proceedings under s 34C of the LEC Act.

Statutory considerations

Environmental Planning and Assessment Act 1979

7. Section 79C(1) of the EP&A Act states:

“79C Evaluation

(1) Matters for consideration--general In determining a development application, a consent authority is to take into consideration such of the following matters as are of relevance to the development the subject of the development application:

(a) the provisions of:

(i) any environmental planning instrument, and

(ii) any proposed instrument that is or has been the subject of public consultation under this Act and that has been notified to the consent authority (unless the Secretary has notified the consent authority that the making of the proposed instrument has been deferred indefinitely or has not been approved), and

(iii) any development control plan, and

(iiia) any planning agreement that has been entered into under section 93F, or any draft planning agreement that a developer has offered to enter into under section 93F, and

(iv) the regulations (to the extent that they prescribe matters for the purposes of this paragraph), and

(v) any coastal zone management plan (within the meaning of the Coastal Protection Act 1979 ),

that apply to the land to which the development application relates,

(b) the likely impacts of that development, including environmental impacts on both the natural and built environments, and social and economic impacts in the locality,

(c) the suitability of the site for the development,

(d) any submissions made in accordance with this Act or the regulations,

(e) the public interest.”

Auburn Local Environmental Plan 2010

8. Development on the Subject Site is subject to the Auburn Local Environmental Plan 2010 (‘ALEP’).

9. Under ALEP 2010 the Subject Site:

1. is zoned B4 Mixed Use;

2. has a permissible height limit for development of 36m.

3. has a permissible floor space ratio (FSR) of 5:1.

10. The approved development on the Subject Site has an approved height of 36m and an approved FSR of 4.7:1.

11. The Parties agreed that the proposed subdivision is permissible with consent.

Auburn Development Control Plan 2010

12. The Subject Site is also subject to the provisions of Auburn DCP 2010 (ADCP).

Contentions

13. The principal contention between the parties was whether the creation of the proposed Lot 3 stratum subdivision, including that portion located in the airspace above an approved building, would then create an unacceptable level of uncertainty for planning on the Subject Site, and in the area around the Subject Site.

14. During the hearing both parties agreed that the proposed subdivision would create uncertainty for planning on the Subject Site, and in the area around the Subject Site. The parties differed as to whether this uncertainty was unacceptable, as was the position of the respondent, or whether it could be managed, as contended by the applicant.

15. Consequently, the principal question for resolution in this case is:

1. should the proposed stratum subdivision be approved notwithstanding the uncertainty that it would create for planning on the Subject Site, and in the area around the Subject Site?

Should the proposed stratum subdivision be approved?

16. The respondent submitted that planning uncertainty would arise from approval of the application because:

1. the creation of the lot by subdivision would create a high expectation of development of that lot;

2. the envelope of the lot would be in breach of the 36m height limit established under ALEP 2010;

3. the current approved development on the subject site already has an FSR of 4.97:1 that is close to the maximum FSR of 5:1 which is applicable to the site;

4. the proposed application is based on potential changes to the current controls within ALEP that had been exhibited in the Draft Auburn and Lidcombe Town Centres Strategy, the outcome of which is yet to be finalised;

5. the apartments and commercial lots within the currently approved development would soon be owned and occupied by new owners who would form a new owners corporation for common property within that development. These owners and the owners Corporation would not be aware of the proposal to alienate the airspace above the building which would otherwise be common property belonging to the owners corporation;

6. the potential impacts of any development of the lot could not be assessed with respect to either the amenity of future residents of the current development or on spaces outside of the Subject Site.

17. The respondents said that a subdivision should be capable of a permissible use and that if it was not, the subdivision would have no purpose and should not give rise to a consent.

18. The respondent concluded that the proposed subdivision should not be granted consent because the permissible height and FSR limits applicable to the subject site meant that no further development would be permissible.

19. The applicant’s submission was that:

1. its case drew on the exhibition of the Draft Auburn and Lidcombe Town Centres Strategy (dated December 2016), that had included a proposal to increase the permissible building height limit on the Subject Site to 50m;

2. the currently approved building on the Subject Site had been constructed so as to facilitate the possible addition of a further 25 units within the proposed stratum subdivision;

3. it had prepared concept plans for a development that might be constructed should the application be approved;

4. the potential for any future development within the proposed stratum subdivision, such as that provided in the concept plan drawn up by the applicant, could be protected through conditions that would form part of any consent;

5. it agreed that the proposed subdivision would give rise to uncertainty, but that this could be managed through provisions contained within the proposed contracts of sale for the purchase of units within the currently approved development;

6. any external impacts of development within the proposed subdivision, such as potential overshadowing and view line impacts, would either be contained within a commercial zone around the Subject Site or could be managed through the applicant’s ownership and control of an adjoining lot;

7. impacts of any development, within the proposed subdivision envelope, on the amenity of future residents, and their use of community open space within the currently approved development, could be conditioned and managed through the owners corporation. This would include the coordination of any further easements that may be required between the current and any future development. .

20. The applicant conceded that any development within the proposed subdivision would be in breach of the height limit and would be limited by the FSR currently applicable to the site.

21. The applicant noted that the proposed subdivision was:

1. pre-emptive in relation to the outcomes of the strategic planning review the Auburn and Lidcombe Town Centres; and

2. a ’speculative play’, that this was not unusual in relation to the subdivision of land.

22. The applicant agreed that the potential amenity impacts of the proposed subdivision could not be assessed at the current time.

23. The joint report of the planning experts, Ms Clare Brown, for the respondent, and Mr Pavlo Dorach, for the applicant, was tendered as evidence during the hearing.

24. In that report the experts agreed that the creation of the proposed Lot 3 stratum subdivision would create an expectation of future development within that lot.

25. Mr Dorach said that any application for a development within the proposed Lot 3 stratum subdivision would be assessed at the time of its submission and within the context of the planning regime applicable at that time.

26. The parties agreed that the concept plans that the applicant had prepared showed, inter alia, a possible design outcome for the Subject Site that did not exceed a 50m height of building control.

27. Ms Brown noted that while the Draft Auburn and Lidcombe Town Centres Strategy contained a proposal for a possible increase in the building height limit for the Subject Site, from 36m to 50m, it contained no proposal for a change to the FSR control applicable. She observed that the current approved building was already close to the limit of that control and as a consequence no further development on the site would be permissible.

28. In response, Mr Dorach concurred that the current approved development on the Subject Site had almost exhausted the allowable 5:1 FSR, but said that other options may exist for the applicant to secure additional FSR allowances.

29. In response, Ms Brown noted that none of the options proposed by Mr Dorach for securing an additional FSR allowance formed part of the current application.

30. In closing, Mr Jayne for the applicant said that the outcome of the Auburn and Lidcombe Town Centre was not known, that the exhibited draft may or may not lead to a change in height limits and that any design of a development on the proposed Lot 3 strata subdivision would need to reflect the FSR on the site, which he noted also may or may not change.

31. Mr Clay, for the respondent, submitted that any subdivision should be capable of a permissible use, in order to give the subdivision purpose and upon which to base a development consent. It was his submission that the applicant had not demonstrated that a development that was permissible and feasible could be carried out, should the proposed subdivision be approved.

32. In considering the merits of the parties’ submissions I have drawn on several decisions of the Court that provide a basis for the assessment of proposals for the subdivision of land.

33. Most notably, in the case of Parrott v Kiama [2004] NSWLEC 77, Senior Commissioner Roseth considered whether subdivision applications should be approved without constraints on the buildings that can later be built. He said at [17]:

“17 When should a subdivision application include information on the buildings to be built on the resulting allotment(s)? It is normal practice in Australia to subdivide land without constraints on the buildings that can later be built. While this practice is appropriate in most cases, it is not always so. I have adopted the planning principle that a subdivision application should provide constraints on future buildings when the proposed allotments are smaller than usual, or environmentally sensitive or where significant impacts on neighbours is likely and needs careful design to minimise them.”

34. Drawing on the planning principle developed by Senior Commissioner Roseth, Acting Senior Commissioner Brown (as he was then), in the case of Penrith Lakes Development Corporation v Penrith City Council [2015] NSWLEC1329, observed at [89] that:

“The court has the opportunity, or even obligation, to consider the ultimate use of land in deciding whether to approve a subdivision application.”

35. In support of this, the Acting Senior Commissioner then went on to note that in the Court of Appeal’s decision in Seraphina Bell Pty Ltd v Willoughby Municipal Council (No 2) (1967) 14 LGRA 209 it had stated (at [9]) that:

“I have already said that it would be quite wrong to require the council or the board to deal with a subdivision application as if the land were and would always remain vacant land. The propriety of looking to the present and to the prospective state of the buildings and their uses is, I think, affirmed by such cases as Emmott v Ku-ring-gai Municipal Council (1958) 3 LGRA 177; Fiorino v Ryde Municipal Council (1958) 3 LGRA 266 and Dunn v Sutherland Shire Council (1959) 4 LGRA 178.”

36. Relying on these authorities, the Acting Senior Commissioner concluded that:

“I can see no reason to approve a subdivision that cannot be implemented and has no identified purpose.”

37. I concur with the Acting Senior Commissioner’s conclusion that there should be a purpose in the creation of a subdivision, such that any lot so created should be capable of a form of development that is permissible.

38. Both parties agreed that no development within the proposed Lot 3 stratum subdivision is possible under the current provisions of ALEP, not least because any development would exceed the permissible building height and FSR controls currently applicable to the Subject Site.

39. The matter then turns on what weight, if any, I give to the exhibited Draft Auburn and Lidcombe Town Centre Strategy in determining the appeal. While the strategy has been exhibited, the outcome of that exhibition, in terms of whether the strategy should be amended in response to submissions, has not yet been confirmed.

40. Further, the exhibited draft, while including the possibility that the permissible building height on the subject site might increase to 50m, did not propose any change to the FSR applicable to the Subject Site. Consequently, even if an increase in height limit were to form part of the final strategy, it is less certain, and certainly less clear, what outcome might be forthcoming with respect to the FSR control applicable to the Subject Site.

41. Given these uncertainties, and the draft status of the Draft Auburn and Lidcombe Town Centres Strategy, I conclude that:

1. the Draft Auburn and Lidcombe Town Centres Strategy should be given little weight in my determination of this appeal; and

2. I can give little weight to the mechanisms proposed by Mr Dorsach to overcome the limitations of FSR with respect to future development opportunities within the proposed Lot 3 stratum subdivision.

Conclusion

42. Based on the above, I am satisfied that:

1. while the proposed Lot 3 stratum subdivision is permissible, the subdivision would have no purpose, as no subsequent development would be permissible within the airspace component of that subdivision under the statutory regime currently applicable to the site; and

2. as there is no purpose to the subdivision, and consistent with previous decisions of the Court, the proposed subdivision should not be approved.

43. I conclude that, for these reasons, the appeal should be dismissed.

Orders

44. The Court orders that:

1. The appeal is dismissed.

2. Development consent is refused for DA 5-2017 for the creation of a stratum subdivision in the air space above the currently approved development at 34-40 John St, Lidcombe.

3. The exhibits are returned with the exception of Exhibits 1 and A.

………………………….

Michael Chilcott

Commissioner

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Decision last updated: 09 May 2018