Wylde Oak Pty Ltd v The Council of the City of Sydney

[2025] NSWLEC 1163

Land and Environment Court

New South Wales

Medium Neutral Citation:

Wylde Oak Pty Ltd v The Council of the City of Sydney [2025] NSWLEC 1163

Hearing dates:

11-13 February 2025

Date of orders:

19 March 2025

Decision date:

19 March 2025

Jurisdiction:

Class 1

Before:

Horton C

Decision:

The Court orders that:

(1) The Applicant is to pay the Council’s costs thrown away as agreed or assessed as a result of the amending of the development application, pursuant to s 8.15(3) of the Environmental Planning and Assessment Act 1979.

(2) The appeal is upheld.

(3) Development application no D/2023/707 for demolition of the existing buildings at 11A and 13A Wylde Street, tree removal, excavation, and construction of a new 6 storey residential flat building with 5 apartments, 7 basement levels containing 6 car parking spaces, a roof top terrace and swimming pool, and associated landscaping works including new tree plantings at 11A and 13A Wylde Street Potts Point NSW 2011, is determined by the grant of consent, subject to conditions of consent at Annexure A.

(4) All exhibits are returned except for exhibits A, B, C, M and 3.

Catchwords:

DEVELOPMENT APPLICATION: residential apartment development – residential flat building in R1 General Residential zone – effect on heritage conservation area

Legislation Cited:

Environmental Planning and Assessment Act 1979, ss 1.3, 8.7, 8.15

Environmental Planning and Assessment Regulation 2021, ss 29, 38

State Environmental Planning Policy (Biodiversity and Conservation) 2021, ss 6.6, 6.7, 6.8, 6.9

State Environmental Planning Policy (Housing) 2021, ss 45, 47, 147, 148, Sch 9

State Environmental Planning Policy (Sustainable Buildings) 2022, s 2.1

Sydney Local Environmental Plan 2012, cll 4.3, 4.6, 6.21C

Cases Cited:

C-Corp Nominees Pty Ltd v Inner West Council [2024] NSWLEC 65

Toga Penrith Developments Pty Limited v Penrith City Council [2022] NSWLEC 117

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

Woollahra Municipal Council v SJD DB2 Pty Limited [2020] NSWLEC 115

Texts Cited:

Sydney Development Control Plan 2012

Guidelines for Retention of Existing Affordable Rental Housing

Register of Significant 20th century buildings, published by the Australian Institute of Architects

Apartment Design Guide

Category:

Principal judgment

Parties:

Wylde Oak Pty Ltd (Applicant)
Council of the City of Sydney (Respondent)

Representation:

Counsel:
M Staunton (Applicant)
N Hammond (Respondent)

Solicitors:
Mills Oakley (Applicant)
The Council of the City of Sydney (Respondent)

File Number(s):

2023/463636

Publication restriction:

Nil

Judgment

1. COMMISSIONER: Two existing residential flat buildings occupy sites known as 11A and 13A Wylde Street in Potts Point. The two sites are poised atop a sandstone cliff face overlooking Embarkation Park to the west, with access via a narrow lane known as Oak Lane, that connects to Wylde Street to the east.

2. The Applicant in these proceedings, Wylde Oak Pty Ltd (Wylde Oak) proposes the demolition of the residential flat building on 11A Wylde Street, and the substantial demolition of the adjacent residential flat building at 13A Wylde Street in order to construct a new residential flat building above basement car parking.

3. While neither of the buildings are listed for their heritage significance, they are located within a heritage conservation area and it is the effect of their proposed demolition on the heritage conservation area that is the key aspect of this dispute.

4. Wylde Oak lodged Development application D/2023/707 with the Council of the City of Sydney on 8 August 2023. As the DA was not otherwise determined, Wylde Oak filed an appeal in Class 1 of the Court’s jurisdiction under s 8.7 of the Environmental Planning and Assessment Act 1979 (EPA Act).

5. The Court granted Wylde Oak leave to rely on amended plans and other documents in October 2024 that had the effect of amending the DA.

6. At the commencement of the hearing, Wylde Oak also sought, unopposed, to rely upon the following amended plans and other documents:

1. Additional visual images prepared by Urbaine, dated December 2024 (Exhibit D)

2. Letter of advice – Updated Affordable Housing Analysis, prepared by EG Property Group dated 17 December 2024 (EG Advice) (Exhibit E)

3. Memorandum regarding retained portion of building, prepared by Northrop Engineers dated 21 January 2025 (Exhibit F)

4. Structural memorandum for protection of existing sandstone retaining wall, prepared by Northrop Engineers dated 17 January 2025 (Exhibit G)

5. Assessment for Potential building damage, prepared by EI Australia dated 28 January 2025 (Exhibit H)

6. Memorandum relating to Construction Monitoring, prepared by EI Australia dated 16 January 2025 (Exhibit J)

7. Memorandum relating to Rock Anchor and Cliff Face Assessment prepared by EI Australia dated 16 January 2025 (Exhibit K)

8. Limited Geotechnical Investigation prepared by EI Australia dated 15 January 2025 (Exhibit L)

9. Amended Architectural plans prepared by Tonkin Zulaikha Greer Architects (TZG) dated 10 February 2025 (Exhibit M, Tab 2)

10. Updated cl 4.6 on height, prepared by Planning Ingenuity dated 10 February 2025 (Height Request) (Exhibit M, Tab 4)

11. Sections through Existing retaining wall and proposed retention methodology (Exhibit M, Tab 7)

12. Statutory Declaration of Sarah Panosian of Pierge Pty Ltd re further evidence of Unit 9 rental records. (Exhibit M, Tab 8)

13. Statutory Declaration of Biaba Holovsky re further evidence Unit 10 rental records (Exhibit M, Tab 9)

14. Work schedule for 13A Wylde Street, prepared by TZG (various dates) (Exhibit M, Tab 10)

15. Estimated Cost by QS re Work Schedule for 13A Wylde Street, prepared by QPC dated 10 February 2025 (Exhibit M, Tab 11)

16. Letter from rental agent confirming increase in rental amount following works to 13A Wylde Street (Exhibit M, Tab 12)

17. Affordable Housing Mitigation Measures Statement prepared by Planning Ingenuity dated 10 February 2025 (Exhibit M, Tab 13)

18. Water Quality Technical Memorandum, prepared by Northrop dated 6 February 2025 (Exhibit M, Tab 16)

7. Wylde Oak acknowledges the amendments to the DA contained in the documents listed above constitute amendments that are more than minor. The Council, as the relevant consent authority, approved the amending of the DA by those documents listed at [6], pursuant to s 38 of the Environmental Planning and Assessment Regulation 2021 (EPA Regulation).

The site and its context

8. The two existing buildings on the site are known by building names. 11A Wylde Street is known as ‘Elysee’, and 13A is known as ‘Green Gables’.

9. Elysee is a 6-storey wedge-shaped building that presents externally as face pale brick and concrete. The site on which it stands is legally described as Lot A in DP 191862, with strata designation Lots 1-8 in SP 10223.

10. Green Gables is a 5-storey rectangular shaped building that presents externally as rendered and painted masonry, with some ornamentation. The site on which it stands is legally described as Lot B in DP 191862, and is company title.

11. The site is accessible by vehicle via Grantham Street to the south, which intersects with a portion of Oak Lane that runs north-south. Oak Lane is gated at this intersection.

12. In addition to the subject site, Oak Lane itself provides a degree of vehicular and pedestrian access to the following properties;

1. 11 Wylde Street

2. 13 Wylde Street

3. 1 Grantham Street

4. 3 Grantham Street

5. 13 Grantham Street

13. The site is identified at Section 2.4.4 of the Sydney Development Control Plan 2012 (SDCP) as being located within the Potts Point locality area.

14. A multi storey car park stands to the west of the site at the base of the sandstone cliff face, fronting Cowper Wharf Road. The car park is the property of the Department of Defence (the Naval Car Park), behind which a number of rock anchors penetrate the sandstone cliff face.

15. This particular sandstone cliff face is neither the property of the Department of Defence, nor is it a part of the site. Instead, it is land in the ownership of a deceased estate, over which the Department of Defence has an interest.

16. A public park occupies the rooftop of the Naval Car Park, known as Embarkation Park.

17. The hearing commenced with an onsite view at which the Court, in the company of counsel, representatives of Wylde Oak, and experts observed the character and physical conditions of Oak Lane, the rooftop, stairwell and entry of Green Gables, and the stairwell and entry, top most apartment and undercroft parking area of Elysee.

18. The Court was also taken to Embarkation Park to observe the sandstone cliff face between the site and the Naval Car Park, and a number of residential flat buildings in the vicinity of the site that are the subject to heritage evidence.

19. The Court, accompanied by counsel and the heritage experts, also observed the site from a location south of the Andrew ‘Boy’ Charlton Pool to appreciate the height of buildings in the vicinity of the site, and marked on an image later tendered by Council as Exhibit 8, re-produced below:

The proposal is described

20. In general terms, the proposal is for one building to occupy two lots, where currently two buildings occupy those two lots.

21. The proposal is to demolish Elysee, and substantially demolish Green Gables, and to reinstate built form on the site in a manner that differs in two ways:

1. Firstly, by proposing built form on 11A Wylde Street that joins to new built form on 13A Wylde Street to form one building.

2. Secondly, by proposing two new levels of accommodation below the level of Oak Lane.

22. The proposal also involves the following:

1. Excavation of around 4m of earth from the north west of the site, and excavation of around 21m to the north east of the site to accommodate basement parking for cars, accessed by a mechanical car stacker parking system, fire stairs and access corridor, bicycle and motorcycle parking.

2. Landscape works to the south west, north west and north eastern setbacks on the site.

3. A rooftop terrace with swimming pool, raised landscape planters, pebble roof and stair access with chair lift.

Planning

23. A number of the contentions pressed by the Council are addressed by planning experts retained by the parties, who conferred in the preparation of a planning joint report (Exhibit 4), and a supplementary joint report (Exhibit 9).

24. The planning experts in this matter are Mr Jeff Mead, on behalf of Wylde Oak, and Mr David Reynolds, on behalf of the Council.

25. As a result of the amendments at [6], parties advised the Court that planning issues had been resolved to the point that expert oral evidence was not required.

The proposal exceeds the height standard

26. A height standard of 15m applies to the site, according to the relevant map at cl 4.3(2) of the Sydney Local Environmental Plan 2012 (SLEP).

27. The proposal has a height of 21.2m which clearly exceeds the height standard by 6.2m, and Wylde Oak rely upon the Height Request cited at [6(10)].

28. As is often the case, the height exceedance varies according to the building element and the site’s topography. In addition to the maximum exceedance of 21.2m, Table 1 of the Height Request describes the exceedance in the following terms:

• Parapet edge addressing Embarkation Park: 20.35m

• Glazed balustrade surrounding roof top open space: 16.2m

• Parapet edges supporting the green roof: 15.35m

• Lift overrun: 15.94m

• Pitched roof of No.13A: 15.6m (existing exceedance)

29. The Height Request also quantifies the existing exceedance by Elysee as follows:

1. 23.15m, or 8.15m to the topmost parapet above the existing at-grade parking area.

2. 17.35m, or 2.35m to the building envelope from the existing excavated floor level, addressing Oak Lane.

3. 17.65m, or 2.65m to the top of the incinerator chimney from the excavated floor level.

30. The height request relies on the first test as it is expressed in Wehbe v Pittwater Council (2007) 156 LGERA 446; [2007] NSWLEC 827 (Wehbe), in asserting compliance with the height standard is unreasonable and unnecessary as the objectives of the standard are achieved notwithstanding the non-compliance with the standard.

31. The relevant objectives of the height standard at cl 4.3 of the SLEP are as follows:

(a)  to ensure the height of development is appropriate to the condition of the site and its context,

(b)  to ensure appropriate height transitions between new development and heritage items and buildings in heritage conservation areas or special character areas,

(c)  to promote the sharing of views outside Central Sydney,

…

32. The Height Request asserts strict compliance with the height standard is unreasonable or unnecessary for three reasons:

1. Firstly, the site is located within the Potts Point HCA, in which the existing buildings were erected a considerable time ago. They have, in effect, established a height which is appropriate to the immediate and wider context of the locality. While the proposed is substantially compliant at its eastern and western frontages, those elements that exceed the height standard include open balconies, parapet edges and roof top structures, that are adequately setback from boundaries, and are open and lightweight and, relevantly, are below the height of the existing Elysee building.

2. Secondly, in addition to being located within the Potts Point HCA, the proposed development is in the vicinity of a number of heritage items. The height of the proposal is designed to maintain or reduce the existing height on the subject site. Where the development exceeds the height standard, those elements are open, lightweight and setback so as to effect an appropriate transition.

3. Thirdly, the exceedance does not result in significant view loss when compared to the existing built form on the site. Where an impact does arise, it is within the height standard.

33. The planning experts agree that amendments to reduce the height of the lift overrun, and changes made to the shade structure on the rooftop terrace now represent an acceptable degree of view sharing from locations such as 13 Grantham Street, 12 St Neot’s Avenue and 11 Wylde Street.

34. In addition to views taken from the public domain, a Visual Impact Assessment prepared by Urbaine Design Group dated 20 September 2024 (VIA) (Exhibit B, Tab 5) demonstrates the existing and proposed views at surrounding properties, including No’s 11 and 13 Wylde Street, and 3 and 5 Oak Lane. Images contained in the VIA depict views lost, and those gained.

35. On the basis of the reasons set out in the Height Request, the viewpoints contained in the VIA and the agreement of the experts as to the degree of view sharing afforded by the proposal, I am satisfied that the Height Request has adequately demonstrated that the objectives of the height standard are achieved notwithstanding the non-compliance.

36. Next, the Height Request sets out ten environmental planning grounds it asserts are sufficient to justify the contravention of the height standard, summarised as follows:

1. The building height is already established on the site. The existing and proposed exceedance is consistent with that of buildings in its vicinity. The proposal, in some areas, reduces the height exceedance of the existing built form while new exceedances are those at [29]. The result is effectively a ‘rebalancing’ of the built form on the site, relocating the uppermost portion of Elysee to levels below, within the natural fall of the topography. The rebalancing also increases the setback to the north east where the exceedance is moderated by the offending form being open balconies oriented to the harbour, and not to adjoining buildings.

2. The topography contributes to the exceedance. The site falls 7.6m from Oak Lane to the west of the site, and 5.7m below the existing slab to the undercroft of Elysee. Such an anomaly exacerbates the height exceedance at the north west corner of the site.

3. The exceedance permits communal open space at the rooftop and while the rooftop swimming pool and balustrade represent the maximum exceedance, both elements are lesser in bulk and scale than the existing envelope of Elysee.

4. The exceedance permits the provision of a green roof, accommodating landscape that softens the built form in its context.

5. The proposal achieves a high degree of design excellence because where non-compliance with the height standard occurs, it is generally limited to open, lightweight elements that are appropriately setback when viewed from outside the site, and results from the sharply sloping topography. Where solid elements such as the rooftop swimming pool and lift overrun exceed the height standard, they are obscured from view from the public domain. The uppermost perimeter of the proposal, when viewed from the public domain, exceeds the height standard by only 350mm and so does not substantially contribute to excessive bulk or scale.

6. While the proposal exceeds the height standard, it involves the removal of built form that is visually obtrusive and jarring, and so contributes to the character and amenity of the locality by its removal. The result is a form that is consistent with the desired future character of the area, in terms set out at Woollahra Municipal Council v SJD DB2 Pty Limited [2020] NSWLEC 115.

7. When the potential amenity impacts are considered, the effect is reasonable, with minimal impacts arising, including those identified as follows:

1. The proposal essentially maintains the height, bulk and scale of the existing building and so the range of amenity impacts are consistent with the condition of the site and its context as it exists today. That is, the height exceedance does not create additional overshadowing impacts to adjoining properties when an assessment of the new shadowing is considered alongside the existing shadowing that is removed.

2. Likewise, no adverse privacy impacts arise. The additional height at the rooftop provides communal open space, and on upper levels of the proposal to the north west of the site. Both are oriented to the harbour, and away from adjoining properties.

3. No unacceptable view loss results from the exceedance when compared to the existing building envelope, which is evident in the VIA.

8. The proposal meets the objectives of the height standard and of the R1 General Residential zone in which it is located. The objectives of the R1 zone are:

•  To provide for the housing needs of the community.

•  To provide for a variety of housing types and densities.

•  To enable other land uses that provide facilities or services to meet the day to day needs of residents.

•  To maintain the existing land use pattern of predominantly residential uses.

9. The proposal also achieves two objects of the EPA Act, being:

1. Firstly, it is orderly and economic development of the land (s 1.3(c)), and strict compliance would unacceptably reduce the amenity for future occupants and deprive potential residents of accommodation.

2. Secondly, it is a well-considered, site responsive design that achieves good design and amenity of the built environment (s 1.3(g)).

10. The proposal also gives better effect to the aims of State Environmental Planning Policy No 65 – Design Quality of Residential Apartment Development.

37. I note here that the Respondent is satisfied that the height request adequately addresses the matters required to be demonstrated by cl 4.6(3) of the SLEP, and that the proposed development, as amended, will be in the public interest because it is consistent with the objectives of the height development standard and the objectives for development in the R1 General Residential Zone.

38. While I do not consider all of the grounds advanced to be environmental planning grounds sufficient to justify the contravention, I accept that there are sufficient environmental planning grounds to justify the contravention. In particular, I do not understand the provision of a green roof with landscape that softens the built form in its context to rise, absent additional rationale or reasons, to an environmental planning ground to justify the contravention in and of itself. Neither do I accept strict compliance would unacceptably deprive potential residents of accommodation in terms that could be described as other than orderly and economic development. Finally, given the repeal of SEPP 65 on 14 December 2023, reference to its aims are of little assistance to Wylde Oak.

37. However, I do accept the argument that a ‘rebalancing’ is proposed, that effectively removes built form from the uppermost levels, and utilises the steep fall on the site to accommodate built form at a lower level. When the VIA is carefully read, the rebalancing exercise results in an improvement in the views from a number of apartments and communal open spaces in the area, without imposing unreasonable amenity impacts on its neighbours.

38. The Council does not contend that the contravention of the development standard raises any matter of significance for State or regional environmental planning, or that there is any public benefit in maintaining the development standard, pursuant to cl 4.6(5) of the SLEP.

39. Accordingly, the Council raises no issue regarding cl 4.6 and accepts the expert evidence that a variation of the height development standard under cl 4.3 is justified.

40. I am satisfied under cl 4.6(4) that the height request has adequately addressed the matters required to be demonstrated by subcl (3) and that the proposed development will be in the public interest because it is consistent with the objectives of the height standard and the objectives for development within the R1 zone.

41. I have also considered whether the contravention of the development standard raises any matter of significance for State or regional environmental planning, and the public benefit of maintaining the development standard, pursuant to cl 4.6(5) of the SLEP and I find no grounds on which the Court should not uphold the height request.

The effect of the proposal on the heritage significance of Potts Point

44. While the site is not identified as an item of heritage significance, it is located within the Potts Point Heritage Conservation Area (Potts Point HCA), and both Elysee and Green Gables are identified as contributory buildings within the Potts Point HCA.

45. It is helpful at this stage to note Elysee is agreed to have been designed by architect Cyril Smith in 1958. As such, Elysee is identified as a building of the post war period.

46. Green Gables was designed by architect Douglas Forsyth Evans and completed in 1927. As such, Green Gables is identified as a building of the interwar period.

47. The Council contends that the demolition of Elysee, and the partial demolition of Green Gables is unacceptable because of the impact it would have on the Potts Point HCA, and heritage items in the vicinity of the site, and is inconsistent with the desired future character of the Potts Point Locality.

48. Proposing the complete demolition of Elysee adversely impacts the historic character of the Potts Point HCA, and removes the contributory status of the site.

49. In similar terms, the retention of the front façade and some of the roof to Green Gables amounts to facadism – reducing the significance, integrity and intactness of a contributory building.

50. The Court was assisted in considering those heritage issues with the evidence of Dr Richard Mackay AM, heritage expert for Wylde Oak, and Ms Margaret Desgrand, heritage expert for the Council. The experts conferred in the preparation of a joint expert report on heritage that runs to almost 100 pages in length (Exhibit 5), excluding annexures.

51. The experts agree a number of things, including the following:

1. The exterior of Elysee and Green Gables retains its integrity and neither require demolition or substantial intervention on structural grounds, and Wylde Oak does not assert so.

2. Some degree of adaptation to Green Gables is conceivable without loss of its significance, and some level of demolition and change to Elysee and Green Gables could be appropriate on the grounds of amenity or code compliance, although neither are currently required to be altered to achieve compliance.

3. Elysee is not visible from either Wylde Street or Grantham Street, but a portion of the land on which Elysee stands is visible from Grantham Street.

4. The concentration of detail and ornamentation on the east elevation of Green Gables to the exclusion of side and west facing facades is a common feature of the period.

5. Oak Lane is commonly used as a pedestrian path and so forms a part of the public experience of the Potts Point HCA, despite it being privately owned.

6. In the event the Court is minded to grant consent, then it is possible for appropriate methods of dismantling, salvage and reinstatement or reuse to be agreed in without prejudice conditions of consent.

7. The experts agree that the site is located within the Potts Point locality at Section 2.4.4 of the SDCP for which the following locality statement is relevant:

"This locality is bounded by the Victoria Street and Brougham Street cliff edge to the west; the rear of lots along Wylde Street to the north; the rear of eastern lots along Macleay Street to the east; and Hughes Street and the rear of southern lots along Greenknowe Street to the south.

The Potts Point skyline is easily identifiable by taller buildings along the ridge.

Potts Point is to maintain its character of grand terraces and significant street tree planting and small front gardens along Challis Avenue and Victoria Street. The northern residential pocket created by predominantly interwar apartment buildings should be maintained. Buildings in Wylde Street are to maintain the streetscape quality created by side setbacks and the landscaped setting. Heritage buildings to the west of Macleay Street are to be maintained and respected.

Macleay Street will be the focus of a primary retail spine and Challis Avenue will be strengthened as a destination for unique café and dining opportunities.

New development is to protect and maintain the established landscape quality of streetscapes including significant planting along Macleay and Victoria Streets, median planting and small front gardens of several east-west running streets.

Principles

(a) Development must achieve and satisfy the outcomes expressed in the character statement and supporting principles.

(b) Development is to respond to and complement heritage items and contributory buildings within heritage conservation areas, including streetscapes and lanes.

(c) Protect views to the City skyline from Challis Avenue and Victoria Street.

(d) Maintain significant planting along Macleay and Victoria Streets, and median planting and small front gardens along the east-west streets.

(e) Maintain and enhance the dynamic mix of uses.

(f) Retain existing buildings in their landscape setting.

(g) Maintain and reinforce the asymmetry of Macleay Street’s built form with predominantly 9 storeys along the eastern side and 3 to 5 storeys along the western side.

(h) Retain existing tall buildings along the western side, for example ‘Byron Hall’ as skyline elements within the lower street frontage heights.

(i) Encourage buildings with narrow frontages and party-wall or small building separations along street fronts including Macleay Street and from Challis Avenue to the north where residential apartments are common.

(j) Maintain the predominant side, front and street setback and alignment in Wylde Street.

(k) Maintain the small lot subdivision and predominant terrace building type along Victoria Street"

52. It is also helpful at this stage to identify the heritage items in the vicinity of the subject site. These include the Sydney Harbour Naval precinct that is listed for its heritage significance at a state level and, more broadly, the Woolloomooloo Finger Wharf and Domain.

53. The experts agree the significance of the Potts Point HCA is that contained in the NSW State Heritage Inventory (the Heritage Inventory) (Exhibit 2, Tab 6a) as follows:

"The Potts Point Conservation Area provides evidence of the subdivision of the early land grants and the consolidation of development in Potts Point during the nineteenth and twentieth centuries, reflecting the evolution of the locality from a district of substantial nineteenth century villas, to one characterised by terraces of the late nineteenth and early twentieth centuries interspersed with high quality Interwar and Post war apartment housing and several surviving grand houses. Together with adjoining Elizabeth Bay and Rushcutters Bay, no where else in Australia were apartments built to this height or level of density. This creates streetscapes of strong urban form and Victorian, Federation and Interwar character. Views (including glimpses) to the city skyline and harbour are integral to the character of the area.

The area provides building types which represents the last 150 years of development that coexist in a harmonious way.

The commercial strip along Darlinghurst Road, together with Fitzroy Gardens and the El Alamein Foundation, provide a continuing civic and visual focus for the area."

54. The Statement of Significance also sets out a range of policy recommendations, and while the experts agree the proposed demolition of Elysee runs contrary to the Policy recommendation to retain post-war to 1975 apartment buildings identified as Contributory, Ms Desgrand goes further to list the following policy recommendations also offended by the proposal:

• Do not allow amalgamation of sites

• Retain inter-war apartment buildings

• Retain post-war to 1975 apartment buildings identified as Contributory

• Retain scale

• Maintain building alignment

• Retain form

• Retain finishes and details

• Additions to rear of low scale building not to exceed ridge height and retain original roof form.

• Reinforce the existing landscaped character

• Contributory buildings should be retained and conserved…There shall be no vertical additions to such buildings and no alterations to the façade of the building other than to reinstate original features. Any additions and alterations should be confined to the rear in areas of less significance, should not be visibly prominent and shall be in accordance with the relevant planning controls…

55. The experts agree that the designation of ‘post war’ buildings is a recent addition to the Heritage Inventory, and so the Statement of Significance was also only recently amended to include reference to the same.

56. Finally, it is also relevant to note the development is supported by a Statement of Heritage Impact, prepared by TZG and dated July 2024 (SHI) (Exhibit B, Tabs 6 and 7). The SHI is in two volumes.

Whether Elysee is contributory

57. The Council submits the Court should accept the designation of sites identified on the Building contributions map and not ‘go behind’ the designation, given the grading of these buildings is based on studies carried out by appropriately qualified heritage consultants.

58. Ms Desgrand goes further to suggest that Elysee is worthy of further investigation as a local heritage item. It is already listed on the Register of Significant 20^th century buildings, published by the Australian Institute of Architects (the Institute’s Register). The original west-facing coloured-glass curtain wall may still be partly in place, albeit obscured by later cladding, and could be easily reinstated with high performance interlayers and double glazing to achieve contemporary energy efficiency standards.

59. Such works are common in residential flat buildings where owners regularly contribute to the costs of upgrade. It is also unremarkable that Elysee has been subject to change over time, as many buildings of its age are.

60. Professor Mackay notes that the curtain wall to Elysee was intact when the building was added to the Institute’s Register in 1994, but that it is today a “small pokey building” that, when considered in totality, should not be designated ‘Contributory’. Such a conclusion is supported when Elysee is considered in its own streetscape. It is not visible from either Wylde Street or Grantham Street. Neither is it deserving of the designation when understood in the wider context of the Potts Point Locality. Buildings identified in Council’s own assessment to be superior, such as the ‘Gemini’ building, designed by Harry Seidler, are currently designated as ‘Detracting’ on the Buildings Contributions Map.

61. Professor Mackay’s reference here is to a Planning Proposal prepared by the Council (Exhibit 2, Tab 6b) that identifies nine buildings for inclusion as individual heritage items under Sch 5 of the SLEP.

62. The Planning Proposal does not propose that Elysee be listed as an item of heritage significance, as is entertained by Ms Desgrand. However, it does propose that a number of buildings that have been designated as ‘Detracting’ to the Potts Point HCA up to now be listed as heritage items, including the Gemini building by Harry Seidler and the former Sheraton Hotel at 40 Macleay Street.

63. To this end, Wylde Oak submits it is relevant that the section found in the Heritage Inventory headed ‘Description’ makes reference to “several high quality post war buildings that represent an important phase of development including Gemini by Harry Seidler and the former Sheraton Hotel at 40 Macleay Street”. However, nowhere is reference made to Elysee. Likewise, while 12 architects are named as notable authors of buildings in the Potts Point HCA, neither Douglas Forsyth Evans or Cyril Smith are among them.

64. Professor Mackay’s review of the designations of sites contained in Council’s Buildings Contributions Map and those depicted in a Comparative Analysis undertaken on behalf of Wylde Oak (Exhibit B, Tab 7, Section 2.0) leads him to conclude that “an erratic threshold” appears between designations on the Buildings Contribution Map.

65. Instead, Professor Mackay considers the SHI completed by TZG to be thorough and rigorous for two buildings that are not heritage items, and not proposed to be listed as such.

66. Professor Mackay’s evidence is that the SHI meets the requirements of Section 3.9.1 of the SDCP, noting that an assessment of Elysee and Green Gables has been undertaken, including their contribution to the Potts Point HCA, as has an assessment of heritage items in the vicinity and an assessment of heritage impact.

67. Ms Desgrand believes the assessment of significance of the sites, views to and from the site, and the wider context in which they are seen, is not adequately addressed in the SHI. For example, inadequate attention is given to significant views in the Potts Point HCA, and does not mention their prominence when viewed from certain heritage items.

68. Furthermore, Ms Desgrand believes insufficient effort has been made to consider alternatives that would retain the buildings.

69. Wylde Oak refers to floor plans at Section 3.0 of the SHI (Vol 2) that depict the retention of Elysee and Green Gables, with the addition of a lift, lobby and stairs servicing units on each level.

70. Three options are tabulated in Section 3.0:

• Existing: do nothing

• Option 1: current proposal at a cost of $10,408,326 + GST

• Option 2: retention of 11A and 13A Wylde Street as two separate buildings at a cost of $10,921,834 + GST

71. I also note the SHI includes, at Section 6.1, early conceptual options A, B and C that appear additional to those at [70].

72. A Detailed Cost Report prepared by Berco Consulting dated June 2023 (Exhibit A, Tab 6) provides an elemental breakdown of construction materials, labour, building services, preliminaries, professional fees and builders margin to arrive at a similar, but not identical, figure of $10,280,521 for Option 1 as described at [70].

73. Wylde Oak also relies upon an assessment as to feasibility prepared by EG Property Group dated 16 September 2024 (Feasibility Assessment) (Exhibit B, Tab 8) that includes the construction costs for Options 1 and 2 at [70], as part of a broader assessment that also includes a sum for site acquisition, development costs, realisation, profit and a figure identified as the internal rate of return, of 18.79%.

74. A Pre-construction cost report prepared by QPC Quantity Surveyors (Exhibit M, Tab 11) attributes a cost of $4,056,773 to those works proposed in Option 2 to Green Gables that result in 5 x 2 bedroom apartments within the existing envelope, supported by architectural plans prepared by TZG (Exhibit M, Tab 10).

75. Ms Desgrand sets out a scenario in her written evidence noting the potential for adaptation that would consolidate units into two-storey apartments, and queries whether the upgrade of Elysee would be required under s 64 of the EPA Regulation for such a modest extent of refurbishment.

76. Structural assessments prepared by Northrop Engineers dated 23 June 2023 for both Elysee and Green Gables (Exhibit A, Tab 29) conclude both buildings are nearing the end of their life and contain a number of defects that will require significant and ongoing maintenance. It is noteworthy that an underlying assumption of the Structural Report on Elysee is that it dates from around the 1970s and is nearing the end of an average 50-year design life. As stated at [45], Elysee dates from 1958 and so is presumably well beyond such a life.

77. The experts set out competing positions as to the application or relevance of the Court’s planning principle first expressed as such in Helou v Strathfield Municipal Council [2006] NSWLEC 66 (Helou), however Wylde Oak submits the relevance of Helou is lessened in this context where development in a heritage conservation area, and demolition of contributory buildings are themselves dealt with in the SDCP.

78. Professor Mackay regards the level of modification to have diminished its intactness, and so provides a basis to question the designation of Elysee as contributory.

79. As to whether the modifications are reversible by the reinstatement of the west-facing glazing, or there are other options to redevelop, Professor Mackay considers the costs and complexities of the site in reinstating the west facing glazing to be impractical, and any more extensive redevelopment such as that proposed by Ms Desgrand would likely require compliance given the non-conformances evident in respect of the following structural condition, access for those with a disability, and compliance with the National Construction Code and Apartment Design Guide (ADG).

80. Contributory buildings are dealt with at Section 3.9.7 of the SDCP:

"Contributory buildings are buildings that make an important and significant contribution to the character and significance of the heritage conservation area. They have a reasonable to high degree of integrity and date from a key development period of significance of the heritage conservation area. They are buildings:

• from a significant historical period and are highly or substantially intact; or

• from a significant historical period and are altered yet recognisable and reversible.

(1) Contributory buildings are to be retained unless the consent authority determines the replacement is justified in exceptional circumstances

(2) Alterations and additions must not significantly alter the appearance of principal and significant facades of a contributory building, except to remove detracting elements.

(3) Alterations and additions to a contributory building are to:

(a) respect significant original or characteristic built form;

(b) respect significant traditional or characteristic subdivision patterns;

(c) retain significant fabric;

(d) retain, and where possible reinstate, significant features and building elements, including but not limited to original balconies and verandahs, fences, chimneys, joinery and shop front detailing;

(e) remove unsympathetic alterations and additions, including inappropriate building elements;

(f) use appropriate materials, finishes and colours; and

(g) respect the pattern, style and dimensions of original windows and doors.

(4) Where an addition to the building is proposed, significant external elements are to be reinstated.

(5) Foyers or other significant interior features, including hallway detailing, panelling and significant staircases, designed to be visible from the street, are to be retained especially where they form part of the building’s contribution to the character of the heritage conservation area."

81. Wylde Oak submits it is open to the Court to find that Elysee does not answer the description of a ‘Contributory’ designation, and that it makes no more than a neutral contribution.

82. Section 3.9.8 of the SDCP deals with buildings with a neutral designation in the following terms:

"Neutral buildings are buildings that do not contribute nor detract from the significant character of the heritage conservation area.

Neutral buildings are:

• From a significant historical period, but altered in form, unlikely to be reversed;

• sympathetic contemporary infill; or

• from a non-significant historical period but do not detract from the character of the Heritage Conservation Area.

(1) Demolition of neutral buildings will only be considered where it can be demonstrated that:

(a) restoration of the building is not reasonable; and

(b) the replacement building will not compromise the heritage significance of the heritage conservation area.

(2) Where demolition of a neutral building is allowed, a photographic record of the building may be required to be submitted to the City.

(3) Alterations and additions to a neutral building are to:

(a) remove unsympathetic alterations and additions, including inappropriate building elements;

(b) respect the original building in terms of bulk, form, scale and height;

(c) minimise the removal of significant features and building elements; and

(d) use appropriate materials, finishes and colours that do not reduce the significance of the Heritage Conservation Area"

83. Most relevantly, if the Court finds Elysee to be deserving of a neutral designation, Wylde Oak submits that the Structural Reports cited at [76], and Feasibility Assessment cited at [73] support demolition of the building as restoration is not reasonable, and the evidence of the planning experts and Professor Mackay is that the replacement of the building will not compromise the heritage significance of the heritage conservation area.

Contribution to Potts Point HCA

84. Ms Desgrand considers Elysee’s contribution to the Potts Point HCA largely due to being one of only four intact examples of Post War International Style that demonstrates the application of modernist principles on an awkward site. The use of pilotis elevates the building and retains landscape around and beneath the building, and the positioning of the stair to the front of the site is a bold sculptural element that registers as a counterpoint in the interwar streetscape. Finally, Ms Desgrand considers the narrowing of the building at the upper two floors to be recognition of its unique vertical projection beyond the predominant height of its interwar-era neighbours.

85. Professor Mackay believes the contribution made by Elysee is limited by the simple fact that it cannot be seen from either Wylde Street or Grantham Street because of its substantial setback from Oak Lane. When considered from the rear presentation to the west, Professor Mackay believes the elevation is plain, and makes a lesser contribution to the Potts Point HCA, deserving of a neutral designation at most.

86. The proposed development includes two levels below the level of Oak Lane, but above the sandstone cliff face that presents to Embarkation Park.

87. This is best depicted by an excerpt taken from the west elevation in the architectural plan set (Exhibit P), re-produced below:

88. The experts agree that the addition of these levels would have the consequence of being more prominent when viewed from Embarkation Park, and it would alter the setting of Embarkation Park albeit not substantively.

Whether partial demolition reduces significance of Green Gables

89. Ms Desgrand believes that more of the Green Gables building fabric should be retained, particularly the foyer and stairs that she considers to be in good condition and intact.

90. During the onsite view, the Court was shown the original letterboxes, tessellated tiling, timber framed glazed doors and other original features of the building. At the close of the hearing, parties advised that conditions of consent were agreed in respect of the retention, salvage, reuse and interpretation of original fabric. Condition 47 provides for the salvage generally of traditional building materials, and Condition 48 provides for the Salvage, Storage and Reinstatement of particular features of Green Gables.

The siting, height, form, scale, setbacks and materials

91. The two ‘big moves’ described at [21] give rise to contentions as to the siting, height, form and scale, setbacks and materials proposed.

92. Ms Desgrand’s evidence is focused on the views lost from Oak Lane to Woolloomooloo Finger Wharf, the Domain and the city skyline, while Professor Mackay’s evidence considers the expanded views to the north towards Woolloomooloo Bay and the Domain towards the Opera House and Sydney Harbour Bridge to benefit from the increased setback to the north east boundary of the site.

93. Just as views are lost between Elysee and Green Gables, Ms Desgrand also describes the additional bulk that results from the consolidation of built form on the site, and the loss of sunlight into the spaces between. This is quantified by comparing the existing frontage of 7.7m to Green Gables to the frontage of 19.2m for the proposal that Ms Desgrand refers to as a lateral addition.

94. Likewise, the additional bulk will be viewed from Oak Lane, and from Grantham Street, as shown the photomontage re-produced below (Exhibit P, A901), and notwithstanding the increase of 700mm to the view corridor to the north of the site.

95. When the volume of built form that is proposed to be removed, and the volume of built form added are tallied, Ms Desgrand concludes the bulk of the proposed addition is far greater than the bulk removed.

96. This is contrary to Principle (b) of the Section 2.4.4 of the SDCP that seeks development that achieves and satisfies the outcomes expressed in the character statement and supporting principles.

97. Professor Mackay agrees that the view of the proposal from Oak Lane would register as a wider form, akin to a widening of the existing Green Gables building. However this is offset by the wider setback affording the view corridor to the north.

98. When viewed from the west, Professor Mackay believes the proposal will present as two different built elements, comparable to the built form of the area and consistent with the character of Potts Point. The southern element is characterised by more masonry, staggered as it recedes. The north element is expressed by cantilevered balconies providing an open corner.

99. The view from Oak Lane is that re-produced at [94], and the view from the west is depicted on Architectural plan DA902, re-produced below:

100. The character statement and its principles, set out at [51(7)], seeks interwar apartment buildings to be maintained in the northern residential pocket, and for buildings in Wylde Street to maintain the streetscape quality created by side setbacks and the landscaped setting. It also encourages buildings with narrow frontages along street fronts, including Macleay Street and Challis Avenue to the north, and to maintain the predominant side, front and street setback and alignment in Wylde Street.

101. I note here that while the site has an address suggesting it is on Wylde Street, it is set so far down Oak Lane that I do not understand references to characteristics of Wylde Street in the Potts Point Locality statement to apply to the site. Neither do I understand encouragement of narrow frontages to Macleay Street or Challis Avenue to apply to the site. As such, it is only reference to the interwar apartment buildings in the northern pocket of the Potts Point Locality that is relevant to the application before the Court. Such a reference is to Green Gables, being the interwar apartment building on the site.

Findings

102. Clause 5.10 of the SLEP deals with heritage conservation, and relevantly provides, at subcl (2)(a)(iii), that development consent is required where demolition or alteration of the exterior of a building, or removal of a tree, is proposed within a heritage conservation area.

103. Most relevantly, cl 5.10(4) requires the Court to consider the effect of the proposed development on the heritage significance of the area concerned, regardless of whether a heritage management document is prepared or a heritage conservation management plan is submitted under subclause (6).

104. In undertaking the consideration required by cl 5.10, I am assisted by the provision of Section 3.9 of the SDCP that are devoted to heritage, with provisions based on two underlying principles:

• Change should be based on an understanding of heritage significance; and

• The level of change should respect the heritage significance of the item or area.

105. Section 3.9.6 of the SDCP provides guidance on development in heritage conservation areas.

"…

New development in heritage conservation areas must be designed to respect neighbouring buildings and the character of the area, particularly roofscapes and window proportions. Infill development should enhance and complement existing character but not replicate heritage buildings.

(1) Development within a heritage conservation area is to be compatible with the surrounding built form and urban pattern by addressing the heritage conservation area statement of significance and responding sympathetically to:

(a) topography and landscape;

(b) views to and from the site;

(c) significant subdivision patterns and layout, and front and side setbacks;

(d) the type, siting, form, height, bulk, roofscape, scale, materials and details of adjoining or nearby contributory buildings;

(e) the interface between the public domain and building alignments and property boundaries; and

(f) colour schemes that have a hue and tonal relationship with traditional colour schemes.

(2) New infill buildings and alterations and additions to existing buildings in a heritage conservation area are not to be designed as a copy or replica of other buildings in the area, but are to complement the character of the heritage conservation area by sympathetically responding to the matters identified in (1)(a) to (e) above.

(3) Infill development is not to include garages and car access to the front elevation of the development where these are not characteristic of the area.

(4) Development within a heritage conservation area is to be consistent with policy guidelines contained in the Heritage Inventory Assessment Report for the individual conservation area."

106. I have already set out the provisions in respect of Contributory buildings at [80], and those relevant to Neutral buildings at [82].

107. While it is uncontroversial that Elysee and Green Gables are designated as contributory buildings within the Potts Point Locality, the parties rely on different aspects of the evidence to argue their case.

108. Ms Desgrand relies on the policy recommendation in the Heritage Inventory that seeks the retention of buildings identified as ‘post war to 1975’, while Wylde Oak prefers the description in the Potts Point Locality statement that places emphasis on interwar apartment buildings that to be maintained in what is described as the northern residential pocket.

109. While it can be no more than speculation, it would appear the Statement of Significance found in the Heritage Inventory has been updated to embrace ‘post war’ apartment buildings, while the Potts Point Locality character statement retains a preference for ‘interwar’ alone, with no reference to ‘post war’ evident.

110. I consider it only reasonable that the Statement of Significance and other material comprising the Heritage Inventory should be given weight over a more general statement as to the local character, where the particular question before the Court goes to the relative significance of a particular style, period or type, or its contribution to a heritage conservation area in which it is located.

111. I accept that post war apartment buildings are an aspect of the Statement of Significance, albeit absent from any reference as to the strong urban form that comprises the streetscape in the Potts Point HCA. I also note that whether Elysee is properly characterised a Post War International style or functional style is not a relevant aspect given the reference in the Statement of Significance at [53] is to a general period, and not to a particular or preferred style.

112. Wylde Oak submits that it is open to the Court to find the Contributory designation of Elysee to be incorrect, by reason of the latitude described in C-Corp Nominees Pty Ltd v Inner West Council [2024] NSWLEC 65, at [56].

113. However, in the alternative, the Court may also find that notwithstanding the Contributory designation of Elysee, there are exceptional circumstances that justify the replacement of the building, consistent with Section 3.9.7(1) of the SDCP.

114. While there are obvious inconsistencies in the designation of buildings within the Potts Point HCA that lend support to Professor Mackay’s observation of an ‘erratic threshold’ at play, in my view, the Court does not have before it sufficient grounds that would be fatal to the designation of Elysee as a Contributory building. That said, I have genuine doubts as to whether the columns supporting Elysee may be properly referred to as pilotis, and I tend to agree with Professor Mackay that the stair is less an exercise in sculptural daring, and more a pragmatic response to the highly constrained, wedge-shaped geometry of the site.

115. It is that significant degree of constraint that gives rise to circumstances that are exceptional, in my view, and in terms similar to those advanced by Professor Mackay.

1. Firstly, access from the west of the site is precluded by the proximity of the west elevation to the sandstone cliff face. Scaffolding would, in my view, be highly complex given the steep fall and uneven terrain to the west of the site. It is more likely any façade work would be undertaken by crane from Embarkation Park. Ms Desgrand’s suggestion such work could be attempted by abseiling from anchor points on the rooftop is, in my assessment, unrealistic. This lends weight to the argument that reinstatement or restoration of original façade elements requiring access from outside of the building envelope is not without complexity and cost.

2. Secondly, the extent of non-compliances with contemporary access standards that would likely form part of any refurbishment are a severe constraint when the areas of non-compliance at Figures 227 and 228 of the SHI (pp 82-83) are properly understood. Such non-compliances are structural, and not cosmetic. For example, corridor widths throughout the building that are less than 1m wide requires wholesale demolition and relocation of walls that require the replanning of each apartment. It is also relevant to note the opinion in the Structural Report that Elysee is unlikely to comply with earthquake standards that might presumably require stiffening in the vicinity of the pilotis.

3. Relatedly, the schedule of works prepared by TZG depicting rectification of those non-compliances, and the construction of 5 x 2 bedroom apartments within the existing envelope of Green Gables informs an estimate of costs prepared by QPC Quantity Surveyors (Exhibit M, Tab 11) that attributes a cost of $4,056,773 to those works.

4. The apartments, and indeed each floorplate, within Green Gables and Elysee are unusually modest in size, that is not irrelevant to the question of return on investment. While not always an argument accepted by the Court, in this case it appears to suggest a ratio of complexity and cost likely to outweigh the amenity gained.

5. Next, the Court asks itself would Ms Desgrand’s proposal to combine apartments in Elysee into fewer, two-storey apartments change the likely return on investment? The answer must be no. Doing so would unquestionably tip the balance and constitute an extent of work to trigger s 64 of the EPA Regulation. It is likely that a version of the lift, stairs and lobby depicted in Option 2 cited at [66] would be required. Such is the size of apartments in Elysee that vertical circulation occupies around half the floorplate at each level, that does not achieve a reasonable or practical allocation of private versus common property.

116. For these reasons, I accept that there are exceptional circumstances that would permit the demolition of Elysee, and the partial demolition of Green Gables, in terms that are not inconsistent with section 3.9.7(1) of the SDCP.

117. Where both demolition and alterations and additions of Green Gables is proposed, section 3.9.7(2) of the SDCP provides that alterations and additions must not significantly alter the appearance of principal and significant facades of a contributory building, except to remove detracting elements.

118. I accept Professor Mackay’s opinion that the side and rear presentation of Green Gables is not of the same significance as the façade fronting Oak Lane, and which consists of those aspects or elements that characterise it as a building of the Interwar period. This façade is retained, as are the elements within in, and for a section of the return to the north and south.

119. The retention of that part of Green Gables retains the contribution it makes to streetscapes of strong urban form of Interwar character, as sought in the Potts Point HCA, and provides superior views to the harbour, which is integral to the character of the area.

120. Additionally, Wylde Oak proposes to interpret the history of the site. A Heritage interpretation Strategy, prepared by TZG dated June 2023 (Exhibit A, Tab 13) identifies 10 areas of opportunity (p 25), and the stories suited to such interpretation.

121. The suite of assessments, investigations, option analysis, costings and extent of fabric retained lead me to conclude that the proposal is considered and respectful of the heritage significance of the Potts Point HCA.

122. While the proposal is to demolish building fabric identified by the Council to have a degree of contributory value, I accept that the constraints presented by both Elysee and Green Gables are such that radical intervention would be required to so alter building fabric as to compromise any contribution they are said to make.

123. While the removal of a post war apartment building such as Elysee may have an impact on the Potts Point HCA, according to the terms of the Statement of Significance, I also consider the proposed development a well mannered and respectful addition to a corner of Potts Point that will benefit from the broader view corridor to the north east, and the removal of obstructing built form from a number of apartments surrounding the site.

124. The proposal satisfactorily achieves outcomes expressed in the Potts Point Locality statement and supporting principles by complementing heritage items and contributory buildings, including streetscapes and lanes, and by retaining that part of Green Gables that contributes most significantly, and within an improved landscape setting.

125. On the question of landscape setting, I find it relevant that the Landscape area calculations on drawing 724_DA_09 (Issue C) (Exhibit B, Tab 16) prepared by Myles Baldwin Design shows an increase or improvement in the landscape setting from a total of 56m2 of the existing landscape area on the site, to 62.6m2 as a result of the proposal. This excludes a further 22.7m2 of landscaped area that is below the cantilever of the proposed built form, and an additional 103.8m2 of landscape in planter beds across the building, including the rooftop.

126. The proposed development is also consistent, in my view, with the guidance on new development in the Potts Point HCA, set out in Section 3.9.6 of the SDCP, including general consistency with the Policy Recommendations in the Heritage Inventory.

127. As such, I accept Professor Mackay’s opinion that the proposed development will not have an adverse effect on the Potts Point HCA, or on the heritage significance of items in the vicinity of the site.

Affordable rental housing is reduced

128. The provisions within Chapter 2 of State Environmental Planning Policy (Housing) 2021 (Housing SEPP) deal with Affordable Housing.

129. The Council contends that the proposed partial demolition of Green Gables will unacceptably reduce the affordable housing available to renters. The proposal fails in three respects, according to the Council:

1. The proposal fails to demonstrate that existing apartments within Green Gables are not other than low-rental dwellings within a low-rental residential building.

2. Arrangements to assist displaced residents to find comparable accommodation are inadequate.

3. There are no work schedules provided that detail the cost of undertaking upgrade or refurbishment to achieve acceptable housing standards.

130. Section 45 of the Housing SEPP defines a low-rental dwelling in the following terms:

low-rental dwelling means a dwelling that was let at a rental level no greater than the median rental level during the relevant period in relation to a dwelling—

(a)  of the same type, and

(b)  with the same number of bedrooms, and

(c)  in the same local government area.

131. A low-rental residential building is defined as follows:

low-rental residential building means a building used, during the relevant period, as a residential flat building containing a low-rental dwelling or as a boarding house, and includes a building that—

(a)  is lawfully used as a residential flat building containing a low-rental dwelling or as a boarding house, irrespective of the purpose for which the building may have been erected, or

(b)  was used as a residential flat building containing a low-rental dwelling or as a boarding house, but the use has been changed unlawfully to another use, or

(c)  is vacant, but the last significant use of which was as a residential flat building containing a low-rental dwelling or as a boarding house.

132. The meaning of the term ‘comparable accommodation’ is as follows:

comparable accommodation means accommodation comparable with accommodation provided within an existing low-rental residential building the subject of a development application to which this Part applies (Part 3 accommodation) because—

(a)  it is in the same or a neighbouring suburb, and

(b) it is let at the same rental level as, or not more than 5% higher than the rental level of, the Part 3 accommodation, and

(c)  it is available for occupation on the day the development application is lodged, and

(d) for residential flat buildings—it comprises dwellings with the same number of bedrooms as the dwellings in the Part 3 accommodation.

133. On the basis of those definitions above, the experts agree that Green Gables is a residential flat building to which the provisions of Chapter 2 of the Housing SEPP apply.

134. The experts also relevantly agree the following:

1. At least five of the apartments in Green Gables are low-rental dwelling and that the building answers the description of a low-rental residential building.

2. As the vacancy rate for private rental accommodation is less than 3%, it follows that there is insufficient comparable accommodation available to satisfy demand for it. As such, the question to be asked by s 47(2)(b) of the Housing SEPP must be answered in the negative.

3. A condition of consent may be imposed, should the Court be so minded, to require arrangements to assist those residents being displaced to find comparable accommodation, in accordance with s 47(2)(d) of the Housing SEPP.

4. While the actual number of affordable dwellings lost in Potts Point or the City of Sydney in recent years is unknown, the number of affordable and community housing dwellings has increased since 2018 in the City of Sydney.

135. Mr Mead relies on a letter prepared by EG Property Group and dated 17 December 2024 (EG Advice) (Exhibit 4, Annexure E) that assesses those apartments as other than affordable because, in the case of apartment 9, it was either rented above the relevant threshold, or not rented at all. In the case of apartment 10, the evidence does not provide certainty as to whether it was rented in 2018 or 2019, but it would appear it was not rented in 2020.

136. Mr Reynolds queries the basis of the advice contained in the EG Letter as it is not more than verbal, and unverified by any other source. Absent such verification, both Apartments 9 and 10 should be assumed to be low-rental dwellings.

137. As for comparable accommodation in the area, Mr Mead distinguishes what he describes as the ‘test’ at s 47(2)(b) of the Housing SEPP from a search of rental properties on realestate.com.au with a maximum rental level of $525/week. Search results demonstrate a ‘disproportionate representation of affordable dwellings available in Potts Point when compared with other parts of the City of Sydney local government area’.

138. The experts agree that the average vacancy rates for private rental properties in Sydney for the 3 months prior to the DA being lodged was less than 3%. The Guidelines for Retention of Existing Affordable Rental Housing (the Guidelines) deem such a rate to be evidence that there is not sufficient comparable accommodation, and that loss of such accommodation is likely to cause social and economic effect in a community.

139. Mr Mead disputes the degree of cumulative impact likely to result from the loss of low-rental apartments when the real number of affordable rental dwellings in the area is properly understood. Evidence shows the number of affordable rental dwellings in the City of Sydney increased 53% between 2018 to 2023. Furthermore, the Rental Affordability Index prepared by SGS Economics Rental Affordability Dashboard shows Potts Point remains one of the most affordable areas within the City of Sydney LGA.

140. In summary, the experts agree that the proposal will reduce affordable housing on the site by at least 5 low-rental dwellings, and that the proposal will result in a cumulative loss of affordable housing in the City of Sydney LGA. However, the experts also agree that the quantum of dwellings lost is relatively minor and that Wylde Oak now proposes measures to assist displaced residents to find alternative accommodation that “goes above and beyond” the requirements of the Guidelines.

Structural and geotechnical

141. The Council contends that the excavation proposed on the site will have significantly adverse impacts on the structural integrity of the structures on the subject site and on surrounding sites.

142. The central issues are identified as both structural and geotechnical in nature. These topics are the subject a joint expert report prepared by Mr Rodney Pratt, structural expert for Wylde Oak, and Mr Mike Leung, Geotechnical expert for Wylde Oak, and Mr Hari Gohil, structural and geotechnical expert for Council (Exhibit 7).

143. The joint report is supported by Annexures, including Memoranda prepared by Northrop in respect of protection of the retained portion of Green Gables (Annexure 4), and the retention of a sandstone wall to the west of the site (Annexure 5).

144. The Memoranda also set out a method to assess the potential building damage to adjoining buildings at 11 and 13 Wylde Street, and 13 Grantham Street (Annexure 6), and the monitoring of excavation for movement and deflection, and vibration (Annexure 7).

145. The experts agree that the Memoranda set out a satisfactory solution to protect that portion of Green Gables proposed to be retained, and the sandstone wall. Likewise, the level of information provided in Annexure 6 for determining the impact on neighbouring buildings is satisfactory, and Annexure 7 provides the necessary criteria for geotechnical monitoring and guidance on construction noise.

146. Behind the Naval car park at [14] a number of rock anchors are evident. A rationale for the layout of the rock anchors is set out in Annexure 9 of the joint report, in an assessment prepared by Mr Leung dated 16 January 2025. In the absence of documentation from the Department of Defence, the rationale makes certain assumptions about the function, angle of inclination and depth of embedment, concluding that the removal of existing buildings and the construction of new development would result in a net neutral balance in the long term and so not pose an adverse impact on the existing rock anchors.

147. The experts also agree that the existing rock anchors and sandstone cliff face will not be adversely affected by the proposed development, and that it is not proposed or intended to encroach in the easements in place to protect the rock anchors, for which owners consent would be required.

148. While the Council also contends that as boreholes have not been sunk to the lowest proposed reduced level (RL), insufficient geotechnical investigation has been undertaken on the site, the experts agree that a borehole has been extended to a level below the lowest level of the proposed development and that additional boreholes should be undertaken once demolition is completed.

149. The site is mapped as part Class 2 and part Class 5 Acid Sulfate Soils on the relevant maps at cl 7.14 of the SLEP, however I accept the rationale set out in a letter prepared by Hayes Environmental Consulting dated 29 August 2024 (Exhibit B, Tab 13) that the site is predominantly sandstone in which ASS is unlikely to be present.

Stormwater

150. There are broad areas of agreement in the joint report prepared by the Stormwater experts (Exhibit 6), prepared by Mr James Gilligan, for Wylde Oak, and Ms Vesna Ristic, for the Council.

151. In general terms, the concept design for stormwater management involves the capture of stormwater, and detention in a 10,000L rainwater tank connected to storage to the west of the site, prior to a pumped discharge to Wylde Street, along Oak Lane.

152. In respect of Stormwater management, the experts initially agreed that the matter was capable of resolution, subject to the imposition of a deferred commencement condition requiring further investigation of the existing stormwater drainage network in Wylde Street to ascertain an appropriate discharge rate.

153. However, as the issues remaining in dispute were considered resolvable, the experts were directed to confer further. On the last day of the hearing, a supplementary joint report was filed (Exhibit 10) in which a discharge rate of 2.3L/s to Oak Lane was agreed. The discharge rate is supported by DRAINS modelling and amended Stormwater plans that show the addition of a flood relief tank on the site.

154. The amendments to the Stormwater Plans gave rise to consequential amendments to the Architectural plans at [6(9)]. The Court granted an adjournment so that the amended plans, and the supplementary joint report of the engineers could be fully understood. On resumption, the Council advised that it approved the amending of the development application by those amended plans in terms similar to those at [7].

155. Section 3.7.2 of the Sydney Development Control Plan 2012 (SDCP) provides that a connection to existing stormwater infrastructure is not to reduce the capacity of that infrastructure by more than 10%, and that the development proposal is to show the level of impact on the existing stormwater infrastructure as a result of the proposed new connection.

156. In respect of stormwater quality management, the experts agree that the provisions of Section 3.7.3 of the SDCP do not apply as the site is not greater than 1,000m2. That said, the experts also agree than the stormwater drainage system proposed will reduce pollutants in the post-development scenario through rainwater storage and trash rack screening proposed.

157. Those features are further described in the Water Quality Technical Memorandum prepared by Mr Gilligan dated 6 February 2025 (Quality Statement) (Exhibit M, Tab 16) that quantifies the reduction in post development pollutants at Table 2 and concludes that the result is a neutral or beneficial effect of stormwater entering the waterway, consistent with s 6.6 of State Environmental Planning Policy (Biodiversity and Conservation) 2021 (Biodiversity SEPP).

158. On the basis of the agreed position of the experts, and the Quality Statement, I am satisfied of those matters about which the Court must be satisfied at ss 6.6, 6.7, 6.8 and 6.9 of the Biodiversity SEPP.

159. I also note here that WaterNSW has provided general terms of approval that are incorporated into without prejudice conditions of consent.

The design of residential apartment development

160. As the proposed development is residential apartment development, the Court is required by s 147 of State Environmental Planning Policy (Housing) 2021 (Housing SEPP) to consider the quality of the design of the development, evaluated in accordance with the design principles at Sch 9.

161. I am assisted in so doing by a statement dated 10 February 2025 and prepared in accordance with s 29 of the Environmental Planning and Assessment Regulation 2021 (EPA Regulation) that attests Mr Tim Greer (Arch Reg No. 5603) directed the design of the proposal, and sets out the means by which the design principles have been applied in the proposed development, and how the objectives in Parts 3 and 4 of the Apartment Design Guide are addressed.

162. On the basis of the statement, I am satisfied the development as proposed meets the requirements set out in s 148 of the Housing SEPP.

Whether proposed development exhibits design excellence

163. While the Council contends the proposed development does not exhibit design excellence, I understand that contention to be confined to those issues at cl 6.21C of the SLEP in respect of heritage and streetscape issues, and bulk, massing and modulation of buildings.

164. For the reasons set out at [118]-[127], I find the proposal adequately addresses the heritage and streetscape constraints and heights (subcl (2)(d)(iii)(vi)), and the bulk, massing and modulation of the building (subcl(2)(d)(v)).

165. However, as shown by Preston CJ in Toga Penrith Developments Pty Limited v Penrith City Council [2022] NSWLEC 117 (Toga), the Court must have regard to the particular terms of, and answer the particular questions raised by, the matters in the design excellence provisions (Toga, at [75]).

166. Those questions include:

(a)  whether a high standard of architectural design, materials and detailing appropriate to the building type and location will be achieved,

(b)  whether the form and external appearance of the proposed development will improve the quality and amenity of the public domain,

(c)  whether the proposed development detrimentally impacts on view corridors,

167. For the reasons that follow, I conclude the answer is affirmative in respect of those questions:

1. Firstly, I accept and agree that the proposal is arranged as two building elements when viewed from the west, as stated at [98], while opening up a view corridor from Oak Lane to the north east.

2. Secondly, the choice of face brick adopts the predominant material in the area, except for that part of Green Gables that is retained which conserve a significant element of an interwar apartment building.

3. Thirdly, for the reasons stated at [125], the landscape setting is improved.

168. As to those matters at cl 6.21C(2)(d), I accept the proposal addresses those aspects for the reasons that follow:

1. The land is suitable for the proposed development as the proposal is for residential apartment development that is permitted in the R1 zone, and is in the northern residential pocket of Potts Point in which predominantly interwar apartment buildings should be maintained, as is proposed, in part, in this development application. As such the proposed uses are appropriate.(subcl (2)(d)(1)(ii))

2. To the extent the proposal may be characterised as a tower, the increased setback to the north east is an acceptable relationship to surrounding development that improves the outlook, setback and amenity to residents of adjoining property (subcl (2)(d)(iv))

3. I accept the statement at [36(7)], supported by shadow diagrams, and 3 dimensional images depicting views from the sun in the architectural plans, that environmental impacts such as overshadowing, visual and acoustic impacts are addressed (subcl (1)(d)(vii)). I also consider the Acoustic Report prepared by Pulse White Noise Acoustics dated 5 July 2023 (Exhibit A, Tab 22) to support this assertion.

4. While I consider the demonstration of the principles of environmentally sustainable development to be no more than adequate, I accept that cross ventilation and solar access are addressed in the statement prepared by Mr Greer at [161].(subcl (2)(d)(viii))

5. As bicycle and motorcycle parking is addressed in the proposal, and vehicular access is demonstrated by satisfactory swept paths, I consider those matters adequately addressed (subcl (2)(d)(ix)).

6. As stated at [123], it is my view that the public domain of Potts Point will benefit, and so be improved, from the broader view corridor to the north east (subcl (2)(d)(x)), will benefit from improved landscape setting (subcl (2)(d)(xiii)) and the reinstatement of the existing bridge and arch fronting Oak Lane at the entry to Green Gables achieves an appropriate interface between the proposal and the public domain (subcl (20(d)(xii).

169. For those reasons above I am satisfied that the proposed development exhibits design excellence in accordance with cl 6.21C of the SLEP.

State Environmental Planning Policy (Building Sustainability Index: BASIX) 2004

170. The application is accompanied by a BASIX certificate (Cert No. 1369405M_03 prepared by Aspire Sustainability Consulting Pty Ltd and dated 18 February 2025) in accordance with State Environmental Planning Policy (Sustainable Buildings) 2022 (Sustainable Buildings SEPP).

171. An embodied energy report is a part of the BASIX Certificate, such that the Court can be satisfied that the embodied emissions attributable to the proposed development have been quantified in accordance with s 2.1(5) of the Sustainable Buildings SEPP.

Public submissions

172. In addition to expert evidence on the heritage character of the existing buildings on the site, the Court is also asked to consider public submissions received by the Council from individuals and on behalf of strata bodies and other organizations in response to notification of the amended DA.

173. I note here the intense public interest in the proposal, evident from the high number of public submissions contained in the Council’s bundle, and received between 2023 and 2025 (Exhibit 2).

174. Council’s summary of those public submission is set out in the Amended Statement of Facts and Contentions in lengthy, and runs to around 4 pages in length.

175. I have considered those public submissions. In my view, a number of categories or classifications of concerns have been addressed by the reasons set out in this decision.

176. A submission from the Australian working party for the documentation and conservation of buildings, sites and neighbourhood of the modern movement, otherwise known as Docomomo, dated 17 September 2023 (Exhibit 2, folio 285-286) objects to the proposal, noting the proposed loss of buildings by modernist architects of note.

177. Docomomo’s submission queries the adequacy of the SHI, and notes the proposal results in loss of the view from Oak Lane to the Woolloomooloo Finger Wharf and Royal Botanic Gardens.

178. As stated previously, I consider the SHI to be well researched and completed with a high degree of rigour, and I accept that the view gained to the north east is superior and desirable to the narrow view afforded at present down the southern setback of Elysee, that is only obtained by a pedestrian making their way down Oak Lane, and is not a view that reveals itself from a location in Wylde Street.

Orders

179. The Court orders that:

1. The Applicant is to pay the Council’s costs thrown away as agreed or assessed as a result of the amending of the development application, pursuant to s 8.15(3) of the Environmental Planning and Assessment Act 1979.

2. The appeal is upheld.

3. Development application no D/2023/707 for demolition of the existing buildings at 11A and 13A Wylde Street, tree removal, excavation, and construction of a new 6 storey residential flat building with 5 apartments, 7 basement levels containing 6 car parking spaces, a roof top terrace and swimming pool, and associated landscaping works including new tree plantings at 11A and 13A Wylde Street Potts Point NSW 2011, is determined by the grant of consent, subject to conditions of consent at Annexure A.

1. All exhibits are returned except for exhibits A, B, C, M and 3.

T Horton

Commissioner of the Court

Annexure A

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Decision last updated: 19 March 2025