The Owners of Strata Plan 69010 v City of Sydney Council

[2007] NSWLEC 209

Land and Environment Court

of New South Wales

CITATION:

The Owners of Strata Plan 69010 v City of Sydney Council [2007] NSWLEC 209

PARTIES:

APPLICANT
The Owners of Strata Plan 69010

RESPONDENT
City of Sydney Council

FILE NUMBER(S):

11121 of 2006

CORAM:

Hussey C

KEY ISSUES:

Development Application :- S 96 Modification, payment associated with pedestrian link transfer

LEGISLATION CITED:

Environmental Planning and Assessment Act 1979

DATES OF HEARING:

16/04/2007

EX TEMPORE JUDGMENT DATE:

16 April 2007

LEGAL REPRESENTATIVES:

APPLICANT
Mr McMahon, solicitor

RESPONDENT
Mr S.Kondilios, solicitor
with Ms P. Adraskelas, solicitor
of Maddocks Lawyers

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

Hussey C

16 April 2007

11121 of 2006 The Owners of Strata Plan 69010 v City of Sydney Council

This decision was given extemporaneously. It has been revised and edited prior to publication.

JUDGMENT

Background.

1 This appeal was lodged against a modified condition imposed on a residential development comprising 8 townhouses at 83A Stewart Street, Paddington. The subject development included a ground level through-site link (approximately 1.96 m wide and 48.5 m long) along the eastern boundary of the development to link Leinster Street, Stewart Street and a pocket park located adjacent to the site and Stewart Street.

2 The pocket park (condition 8 of the consent) required this land be transferred to Council and is now a Council owned park. To east of the site is a single storey cottage and 2-storey residential terraces. To the west of the site and to the north across Stewart Street are 2-storey residential terraces.

3 The development consent included a deferred commencement condition dealing with various aspects of the building details and imposed the following condition:

7. That a positive covenant shall be placed on the title requiring maintenance of the through-site link located along the eastern boundary of the site.

4 The s 96 application sought to have this condition 7 modified to require a positive covenant be placed on the title requiring the transfer of ownership of the through-site link to Council for a consideration of $1.00.

5 After consideration of this application, particularly the cost implications, Council approved the following modified condition 7:

7. That the owner shall dedicate to Council as public road, the through- site link located along the eastern boundary of the site, limited in depth if necessary to the top of any structures beneath the through-site link, subject to all costs involved in the transfer being borne by the owner including connecting the electricity supply to the existing lighting within the through-site link to the adjoining park’s system to allow reading and monitoring from the public domain, the removal of the beam within the airspace of the through-site link and the owner making a one-off payment $16,500 to Council for future maintenance and replacement costs. Any easements required as result of the dedication such as for drainage and services, must be created on the required plan of subdivision.

6 Consequently, the issue in the appeal concerns the reasonableness of the required $16,500 payment required in respect of the transfer of the through-site link.

The evidence.

7 Detailed planning evidence in the form of a joint report was presented by Ms C Elek (Councils Specialist Planner) and Mr J Lidis (Consulting Town Planner).

8 As the threshold issue concerns the appropriateness and reasonableness of the associated payment, a detailed report was also tendered from Mr P Bennett (Valuation Consultant).

9 The joint planning report is of limited assistance to the Court considering the basic disagreement between the planners regarding the requirement for this payment. Even though Mr Lidis says that the appeal relates to a valuation matter, Ms Elek says:

• The acquisition of the right-of-way is not a high priority for Council as it already has a public benefit as a right-of-way. If Council is required to take on formal ownership of the land, this will incur additional liability (which would be currently shared between the owner and Council) for which Council has not budgeted.
• The 88B instrument registered on 21 October 2002 requires the owner of the lot burdened by the easement to maintain and keep in good condition the right of footway at its own expense. The easement may not be released, varied or modified without the consent of the authority benefited.
• The applicant has acknowledged that it has not spent any money maintaining the right-of way to date but has paid the cost of lighting and received the primary benefit of the use of the area. Council rather than the applicant/owner (who has current legal responsibility for maintenance under the terms of the easement as indicated above) has been maintaining the right-of-way to date. This has been undertaken in an informal, commonsense manner to continue the maintenance and safety of the right-of-way. However, this is a very different scenario to Council formally taking on the maintenance of the right-of-way as a result of accepting legal ownership of the land and subsequently incurring the long term associated expenses of maintenance.
• The $16,500 once-off payment is not a contribution requested under Section 94 of the Environmental Planning and Assessment Act. Rather, it is to offset a fraction of the cost to Council of taking on formal ownership of a parcel of land that it has not requested ownership of. This is because the land already serves as a public right-of-way so that there is no reason for Council to own it. If Council is to accept ownership of the land, it should be at no net cost to ratepayers who do not gain from Council's formal ownership of the land above the existing right-of-way that they already have over the land. Council as a statutory corporation is entitled to seek and apply monies to a range of public purposes.
• Residential rates are currently collected for 83A Stewart Street. The land value upon which the rates are calculated includes the 100m2 area of the right-of-way. If the right-of-way changes into Council ownership, Council loses the rates it currently collects over a substantial area of land in an expensive location. This is a further liability for Council.
• The amount of $16,500 has been calculated by Council’s Manager property Strategy (see separate Statement of Evidence) who has taken into consideration the cost of cleaning the laneway and graffiti removal for a ten minute period twice a week ($2,496 per annum = $48.00 per week), electricity for lighting ($240 per annum) and light bulb replacement ($360 per annum) and the present value of the land. These costs are considered very reasonable and represent only a fraction of the real cost to Council of accepting the land. The further costs of repaving at a future date, the cost of repairs to the stormwater system in the event of a future failure, claims arising from the adjoining owner in the event of a system failure, the in perpetuity cost of maintaining the lane way, the cost of risk management of the land and the loss of rates income from the land have not been included in the $16,500 figure. The payment of the $16,500 is therefore considered fundamental to Council accepting ownership of the land. It is noted that Council has not resolved to acquire this land.
• The design of the right-of-way is not considered conducive to safe public usage. Neither end of the long, narrow link with high walls reads as a definite public entry point when viewed from a public footpath or road. The Leinster Street end in particular reads as a side entry to private property and does actually serve as an entry point to several of the townhouses on the site. The right-of-way is therefore most likely to be used by occupants of the townhouse development and their guests.

10 The valuation exercise was undertaken by Mr Bennett who assessed the condition of the existing "pedestrian link" and found that:

• The area should be cleaned, with debris removed, with some frequency. In addition to maintaining the visual amenity of the area, a failure to clean regularly may result in hazards for pedestrians and may impair the performance of the stormwater system.
• Periodic treatments may also be needed (for example, to deter weed growth between the pavers, and to remove mould or other growths upon the paving itself).
• The area has not yet experienced acts of graffiti or vandalism, and has not deteriorated significantly since completion of redevelopment. However, some level of additional work (for example repainting and repaving, if only to repair the broken sections) is reasonably likely in the future.

11 Accordingly, he says that if the transfer is effected, the council is then obliged to act responsibly in its ongoing maintenance of the land, which is unlikely to be substantially altered, or reduced in the future. In these circumstances the considers that the associated costs include:

A. The cost of repaving at a future date.
B. The cost of repairs to the stormwater system in the event of a failure in the future.
C. Claims that may arise from the adjoining owner in the event of a system failure.
D. The in perpetuity cost of maintaining the laneway.
E. Cost of electricity and maintenance of the lights within the laneway.
F. The cost of cleaning the laneway and removal of any graffiti.
G. The costs of “risk management” of the land (including costs of insurance; the loss of the current indemnities for stormwater).
H. The loss of rates income attributable to the land.

12 This results in his estimate of costs that the standalone figure of $16,500 is reasonable to accompany the transfer of the pedestrian link.

Conclusions.

13 After further consideration of matter, the applicant maintained its opposition to the $16,500 payment. The parties then agreed that the modified condition requiring this payment should be deleted and the original condition 7 reinstated.

14 This obviously achieves the intent of the original condition of consent. Whilst the Court acknowledges there are other calculations and options possible, the Court accepts to these consent orders, on the basis of the parties agreement.

15 By consent

1. The appeal is upheld.
2. The modified condition 7 is deleted and the original condition 7 is reinstated as follows:
7. That a positive covenant shall be placed on the title requiring maintenance of the through-site link located along the eastern boundary of the site.

___________________

R Hussey
Commissioner of the Court
ljr