777 Trading Pty Ltd v City of Ryde Council

Land and Environment Court (NSW)|2019-10-17

Judgment

COMMISSIONER: This is an appeal under s 8.7 of the Environmental Planning and Assessment Act 1979 (the EPA Act) by 777 Trading Pty Ltd (the applicant), against the refusal by the City of Ryde Council (the Council) of Development Application LDA2018/0340 (the application).
The application, as amended with the leave of the Court, proposes the demolition of existing structures, consolidation of three lots (being Lots 1, 2 and 3 in DP 1096437), and subdivision of the consolidated lots into two new lots, referred to as proposed Lots A and B, at 68 Denistone Road, Denistone (the site). The proposal also includes an easement across the northern boundary of proposed Lot A to facilitate the drainage of proposed Lot B.
Whilst no development other than subdivision works is proposed in the application, the applicant provided indicative building footprints for future development on the proposed lots. These comprised an attached dual occupancy development on proposed Lot A and multi-dwelling housing, with three units, on proposed Lot B.
The site is generally rectangular, has an area of some 1600m², and is located on the north eastern corner of Denistone Road and Florence Avenue. It contains an Inter-War period 'Californian Bungalow' (dwelling house) in a landscaped garden setting traversing the three existing lots.
Proposed Lot A is an irregularly shaped corner allotment with an area of 588m², and frontages to Denistone Road of 25.5m and to Florence Avenue of 4.89m. Proposed Lot B is rectangular, with the exception of a cut out in the northern corner of the site following the existing subdivision pattern, with an area of 1014m² and a frontage to Florence Avenue of 33.44m.

The background heritage documents

The Planning Proposal was prepared based on the HSA contained in the Davies Report of November 2018 which concluded that the site warranted listing as a heritage item in the LEP with the summary statement of significance as follows (Exhibit 6, Tab 1 p 64): "The house Lanark Brae at 68 Denistone Road (corner Florence Avenue), Denistone is of local historical significance as evidence of the suburban subdivision of the 19th century Denistone Estate, specifically the development of the Denistone Estate subdivision No. 2, lots of which were offered for sale from December 1914, and of the operation of a building covenant on the land. The house and property are of local aesthetic significance, as the house is a finely detailed, substantial representative example of an Inter-war California Bungalow style house, built within the core period for this house style, on a large prominent corner site with a substantial garden setting which retains significant inter-war period garden features including three palm trees, brick and stone edging to paths and garden beds. The house is remarkably intact and features distinctive exterior elements of the style including leadlight timber-framed casement windows, bay windows, return verandah and a small eastern verandah, dark face brickwork, terracotta tiled hipped and gabled roof, gable ends featuring timber shingling and imitation half timbering, brick verandah balustrades with timber posts above, and distinctive internal elements of the style including timber fretwork frieze and timber pilasters between main hallway and lounge/dining area, tiled fireplaces with timber mantelpiece to formal rooms, timber paneled doors, timber floors and decorative plaster ceilings. The period garden setting which surrounds the house is a result of deliberate later land acquisitions to enlarge the site and enables the house to be viewed "in the round" which is a distinctive aesthetic value of the site, along with the prominent corner location which affords views, views which the house has also been designed to take advantage of. The house and property are rare at a local level as a substantial Inter-war California Bungalow style house on a prominent corner property retaining a substantial garden setting including inter-war period garden features. The property is rare as having been enlarged through later deliberate land acquisition to enable the garden to surround the house and enable the house to be viewed "in the round"..."
The applicant disputed this HSA and commissioned a separate HSA. This was undertaken by Urbis in a report titled 'Heritage Assessment 68 Denistone Road Denistone NSW 2114' and dated 18 March 2019 (the Urbis Report).
That Urbis Report (Exhibit 6, Tab 10, p i)) Executive Summary concludes: "…Overall the subject property is not considered to meet the threshold for individual heritage listing as assessed under the seven (7) criteria for assessing heritage significance provided for by the NSW Heritage Division. The subject property…is a good externally representative example of interwar Californian Bungalow typology. The building demonstrates the principal characteristics of its typology, however these are common throughout the Ryde LGA and Sydney more broadly, in more intact examples. It does not contain any rare, endangered or technically innovative features for the typology. The building was not designed by an important or well-known architect, and the property has no known significant historical associations. The dwelling is in a dilapidated state of repair and is structurally unsound. As a result, many internal architectural features have been lost, are damaged or are beyond repair. This has culminated in the degradation of the positive visual and aesthetic qualities of the place. The subject property is not considered to be a rare or endangered typology in the context of Ryde LGA or the broader Sydney region. The Californian Bungalow is a common building typology throughout Sydney, and there are more intact examples located throughout Sydney which are capable of demonstrating this typology and period of development. It is understood that no internal inspection was made of the property by Council's consultants in its investigation and this is unacceptable in terms of determining significance. The property has been occupied for residential purposes since its construction, and holds no particular significance to the community, and has no known significant social values."
As indicated, the DoP required that the Davies Report be updated prior to exhibition to have regard to the state of the dwelling, preferably following internal inspection. The Davies Report was subsequently updated with a revised date of May 2019 and states (Exhibit 6, Tab 2 p 39): "It is difficult to understand the current condition of the building when comparing photos from early 2018 to the present condition of the house. There is a separate structural report that draws a range of conclusions on the current state of the building, but it is rare and unusual to see such a dramatic change in the condition of a building in a 15-month period without some form of major intervention. This report does not attempt to determine how the house has fallen into such a sudden and dramatic state of disrepair, but it does conclude that the house is recoverable, and the damage is repairable. The condition of the house can be recovered with relative ease even though the deterioration is extensive. It is also clear that without remedial work the building is at risk of further deterioration and as a heritage item, even though not a state significant item, it requires urgent intervention. A close examination the building fabric reveals that the houses had considerable cracking and movement that is mostly evident in the interior but is also seen in a number of external locations. Interestingly the interior damage does not align in scale with the external damage… the extensive internal damage and plaster loss is clearly the result of other intervention... It is also clear that elements of the house that were extant when the house was advertised for sale are now removed, including nib walls, fire surrounds, plasterwork, ceilings etc. This damage has also not occurred naturally as a result of structural or other building failure. It is also noted that the house, despite notices warning of structural risk, is occupied, which suggests that to continue in occupation repair and conservation work needs to be undertaken.… Whilst the condition of the building has deteriorated since the first inspection for this report, it does not affect the assessment of significance, the IHO or the ability to reinstate damaged and missing fabric."
The applicant disputed this and also that the heritage listing was imminent and certain on the basis that the DoP had not given the plan-making power to the Council and had wanted more information with regard to the state of the existing dwelling prior to the Planning Proposal being advertised. If the DoP was advised of the condition of the dwelling, it is possible the listing would not occur.

The expert evidence on heritage contentions

The first expert evidence considered in the proceedings was that of the arborists outlined in their Joint Report (Exhibit 11).
The arborists agreed that the garden setting of the property extends from the dwelling outward to the site boundaries and includes the front fencing, boundary hedging, open lawn area, pathways, and specimen plantings both of trees and shrubs.
They also agreed that the site currently contains 46 trees, of which 21 are protected under Part 9.5 Tree Preservation of the Ryde Development Control Plan 2015 (the DCP). Also, that three trees adjoining the eastern boundary of the site appear to be locally native, possibly remnant, STIF. These trees should be retained albeit they were not proposed to be removed as part of the subdivision. Five trees are required to be removed to facilitate the subdivision. Of these, two should be removed in any event and the other three could potentially be relocated.
In oral evidence however, the arborists advised that one of the trees, a canary palm, identified as needing to be removed, but which could be relocated, had failed (snapped). Therefore only four trees would now be affected by the subdivision. Subject to an assessment of their health, these could potentially be relocated, including a cabbage tree palm (referenced as tree T6).
The arborists disagreed as to whether the garden setting is consistent with the landscape principles of an interwar Californian Bungalow garden. Mr Tesoriero argued that the majority of the garden was intrinsically linked to the dwelling, being established and planted at a similar time as the dwelling's construction and that it was a fair example of an interwar period garden. He therefore considered it to be of significance when considered in the context of the existing dwelling.
Further, while some plantings may have been carried out at different time periods, this was not considered to diminish their relationship with the dwelling or significance.
Mr McLoughlin disagreed. He considered the garden had evolved over time with the vegetation a mixture of planned, unplanned and natural elements. Whist some elements were concurrent with the construction of the dwelling, others were not. He noted many existing specimens were not visible in 1942 aerial footage.
Mr Tesoriero was also concerned that there was insufficient information provided to demonstrate that existing trees on site will be capable of retention during and following the proposed demolition works. There were no details of tree protection measures provided. Without this information, and a detailed Tree Management and Protection Plan or method statement in place, it is likely that the existing trees will suffer negative impacts during demolition due to the proximity of works taking place. This would include significant activity within the tree protection and structural root zones of a number of trees. Further, the net loss of, or negative impact to, existing mature vegetation across the site as a result of demolition works would negatively impact the landscape character of the site, streetscape and locality, as well as significantly reduce the level of amenity on the site.
Mr McLoughlin opined that methods could be applied to protect or move trees adjacent to the dwelling were it to be demolished. Tree protection could be a condition of consent prior to any works, particularly for the STIF trees. However, whilst the inherent value of the STIF trees was not questioned, a number of the other trees were old or on the Council's list of exempt species and could be removed. An outcome of the development of the site could therefore be rejuvenation of the site with new plant species which are more desirable in the long run.
Expert evidence was then provided by the structural engineers. They agreed in their expert Joint Report (Exhibit 8) as follows: 1. The dwelling has suffered considerable damage due to movement of foundations being on highly reactive clay and on unstable brick footings. 2. The dwelling is in need of either extensive underpinning or reconstruction. It cannot be underpinned without the presence of a continuous concrete footing which currently does not exist and would need to be installed. 3. The dwelling in its current condition is structurally unsound and unsafe for occupation. 4. The extent of remedial action required is extensive and, given the current condition of the dwelling, is not a reasonable extent of works compared with demolition. 5. The cost of works associated with retention and restoration will be substantially greater than that of reconstruction. It was estimated that this cost would be in excess of $1 million.
In oral evidence, Mr Demlakian estimated the cost of rectification could be as high as $1.3 to $1.5 million based on a schedule of works that he had prepared (Exhibit M) and could take up to 2 years to complete.
His schedule of works commenced with the removal of the roof, followed by removal of unstable or cracked walls and the flooring, laying of footings (externally and internally), underpinning of the building, removal of internal render, reconstruction of brick walls that were demolished and rectification of damaged brickwork not demolished, re-rendering or reconstruction of all impacted render, reconstruction of the roof frame and roof (including tiles), replacement of distorted windows and doors, reinstatement of the floor, relaying of services, plastering of walls, and reconstruction of ceilings. In his view, the damage to the building is increasing at an exponential rate and it is currently unsafe because of the prospect of imminent roof collapse.
Mr McMillan generally agreed with this scope of work although he argued that not all of the roof would necessarily need to be removed, and not all of the windows and doors, flooring, or rendering would need to be removed and replaced. However, these works were not the substantial cost items and would therefore make little difference to the total cost or extent of the remediation works.
In oral evidence, the structural engineers re-iterated that the cause of the instability requiring this extent of rectification works is the reactive soils and, in particular, the lack of moisture in the soils. This was the result of the current drought conditions which exacerbated the natural movement of the soil causing the damage to the dwelling, rather than the damage being the result of human intervention. Further, routine maintenance would not have saved the building given the damage to the footings.
Mr McMillan did note that this damage may have been obviated had the owner regularly watered the grass surrounding the dwelling (as likely occurred in the past). However, this was only ascertainable through hindsight and the owner could not have reasonably known such watering was necessary. He also advised that, in his 50 years of experience as a structural engineer, he had never recommended any underpinning exercise such as this given the prohibitive cost imposed on the owner, and he would not recommend it now.
Attached to the experts' Joint Report was a letter to the Council from consulting firm, Cardno, where Mr McMillan is a Senior Principal, in which he states: "The subject dwelling appears to be founded on high-level brick foundations bearing on reactive clay soils, and as such, would have suffered foundation movements and hence wall damage virtually since day one. Complete underpinning … could stop foundation movements. However, on a dwelling as large as the subject dwelling, complete underpinning would cost many hundreds of thousands of dollars. Complete underpinning of dwellings is accordingly rarely attempted.… I have over my many years in the consulting engineering profession, specified localised underpinning of over one hundred dwellings. However, I am yet to recommend full underpinning of any dwelling, as the prohibitive costs usually involved do not result in a favourable cost benefit analysis..."
The structural engineers also agreed that there was no guarantee that, even with underpinning, the dwelling could be retained or the extent of its intactness.
Expert evidence was then provided by the heritage experts in the knowledge of the evidence provided by the structural engineers. The initial Joint Report of the heritage experts (Exhibit 4) was required not to address demolition. However, their Supplementary Joint Report (Exhibit 9) did, given the leave of the Court for the applicant to amend the application to include demolition. It also responded to the expert Joint Report of the structural engineers.
In this regard, much of Mr Phillips' evidence went to the poor physical condition of the dwelling and the impact this had on its heritage significance whilst Mr Edwards argued that that physical condition was not determinative of significance.
In the first Joint Report (Exhibit 4), Mr Phillips noted that this is an example of a house where a nuanced debate as to its significance is possible and the two reports, being the Davies Report and the Urbis Report, demonstrate this.
In his opinion, the Davies Report is thorough in terms of the history, but tends to overstate certain characteristics of the house, particularly that it is visible "in the round" and that additional land was purchased to affect this. He noted the additional land purchased was away from the two street frontages and was possibly to provide for a vegetable garden. He claimed that being evidence of the development of the Denistone estate subdivision could be readily applied to every house in the estate. Both HSAs agreed there was no particular historical association with the house and he disputed that it was aesthetically distinctive as suggested by the Davies Report.
Mr Phillips opined that the dwelling was typical of many Californian bungalows in the Ryde Local Government Area, being so typical that it was overlooked in two previous heritage studies undertaken by the Council. The characteristics listed in the Davies Report apply to a large range of Californian bungalows and do not necessarily meet criteria for listing. He agreed that the dwelling is a slightly grander example of this style but that, in itself, was not sufficient to warrant listing. Whilst its setting and size gave it some distinction over its neighbours, that was not sufficient, apparently, for listing when previous heritage surveys were undertaken.
Mr Phillips disagreed that the trees on the site contributed in any substantive way to the visual character or setting of nearby heritage items. The only part of Denistone Park that directly relates to the site is a slim slither of land containing a footpath and turf on the opposite side of the intersection, with the bulk of the park lower down the hill. It also does not contribute to the setting of the Ryde Hospital as a significant part of the hospital is some distance from the site and the heritage buildings it contains are blocked from view by more modern buildings.
Further, much of the planting of the site was recent including the front hedge. In any event, conditions of consent could be imposed requiring relocation or retention of trees. He noted that the area was not a heritage conservation area and therefore contemporary development was not precluded.
Finally, neither HSA says the site has social significance or research potential. Mr Phillips therefore agreed with the assessment of Urbis that the site did not meet the guidelines for inclusion as a heritage item in Schedule 5 to the LEP.
In contrast, Mr Edwards argued that the property satisfied a number of assessment criteria for listing, namely: criterion (a) historical significance, (c) aesthetic significance, (f) rarity, and (g) representative significance.
He argued this demonstrates historical significance at the local level and that the majority of locally listed heritage items are assessed as having historical significance to the local area in which they are situated, not the broader Sydney area. The dwelling is situated on a prominent street corner and, whilst existing vegetation conceals direct and full views of the dwelling from the public domain, the roof form and landscaped features remain highly visible and visually prominent in the streetscape.
Further, the majority of other extant examples of Californian bungalows are conventionally situated on lots of a smaller size and do not benefit from dual street frontage and corner orientation. This is enhanced by the generously proportioned landscaped garden setting. The dwelling was designed "in the round" taking advantage of its hilltop position and site characteristics.
Mr Edwards advised that the fact that the property had not been identified in previous heritage studies did not suggest that it had been overlooked. Heritage listings are not static and many councils undertake periodic heritage studies. He considered the dwelling to be good representative sample of an early 20th century bungalow. Irrespective of whether it was attributable to a notable designer or architect, it still demonstrated aesthetic significance for its design integrity.
In this regard, the comparative analysis undertaken of other bungalows within the surrounding area in the Davies Report demonstrated the dwelling was uncommon and rare at the local level as: it occupies an uncharacteristically large allotment; benefited from a corner orientation; and was significantly enhanced by its established landscape garden setting which had a reasonable degree of design integrity. The established garden has a number of extant mature plantings and expensive lawn areas and is intrinsically associated with the landscaped gardens of the time. These planting significantly enhance the setting and curtilage of the dwelling itself. Any relocation of trees is likely to impact their health and vigour.
Further, regardless of physical condition, the dwelling had been assessed against the significance assessment criteria required by the Heritage Council and the physical condition of the building is not a determining factor in that assessment. Demolition would not accord with Article 2 of the Burra Charter (ICOMOS) 2013 for a dwelling of cultural heritage significance. It also contravenes cl 5.10 of the LEP as it would not conserve the environmental heritage of the area.
Mr Edwards argued the dwelling and its landscaped setting contributed to and reinforced the prevailing established pattern and character of the area directly opposite a heritage item of bushland, being Denistone Park. That close visual and physical proximity formed an important visual backdrop to the setting of the item and demolition of the dwelling, and removal of its landscaped setting, would significantly reduce the established character and setting of other heritage items.
Finally, in the first Joint Report (Exhibit 4), Mr Edwards considered that there would likely be more than sufficient surviving physical and documentary evidence to allow the reinstatement of missing fabric and restorative works to remediate the present cosmetic and structural defects, without compromising the overall integrity and significance of the dwelling.
In the Supplementary Joint Report (Exhibit 9), which responded to the structural engineers' Joint Report (Exhibit 8), Mr Phillips noted that the structural engineers suggested two possible methods of remediation through underpinning of the dwelling, both of which were extremely difficult and required adverse intervention to the building.
In his view, irrespective of heritage significance, this is a local item with little or no potential for additional development on the site to defray the remediation costs. These costs place a major cost burden on the owner to make the dwelling habitable. Further, the proposed methods of remediation would have a substantial impact on the integrity of the dwelling with major removal of original fabric and subsequent reconstruction required, ultimately detrimentally impacting its heritage significance.
In oral evidence, Mr Phillips also stated that the scope of works outlined by the structural engineers was optimistic and that, once works started, the outcome could be worse than suggested with removal of a lot more fabric than cited by the engineers.
Mr Phillips concluded that, in situations where such remedial work is required for a local item at such a huge cost in proportion to the value of the property, demolition is a viable and acceptable option. In relation to the overall conservation of the cultural heritage of NSW, the loss is acceptable. In this regard, it is rare that houses are so damaged by reactive soil, and demolition in this instance will not provide a precedent except on the narrowest grounds, being substantial structural failure due to insufficient footings set in reactive soil.
Mr Edwards reiterated his evidence that the condition of a building or item is not a relevant factor for consideration in determining its cultural heritage significance. He noted that the engineers' Joint Report did not contain details of how remediation might be undertaken (albeit this was subsequently provided during oral evidence). Whilst he accepted that reasonable consideration must be given to the financial costs associated with remediation, consideration must also be given to the impact undertaking such works would have on the heritage significance and value of the property.
Mr Edwards opined that remediation of structural defects by deconstruction of walls would have an adverse impact on the integrity of surviving fabric and the dwelling as a whole. However, underpinning without deconstruction of walls would generally be acceptable as low impact and would not adversely diminish the integrity or identified heritage significance of the dwelling.
In oral evidence, Mr Edwards accepted that the Heritage Council guidelines found in the document titled 'Assessing Heritage Significance' released by the NSW Heritage Office in 2001 (the Heritage Guidelines - Exhibit C) do in fact state that 'loss of integrity or condition may diminish significance' (pp 6, 11). Further that, in undertaken a HSA, consideration is required of whether a proposed item has been altered so much that it fails to meet the relevant assessment criterion (p 6).
Having heard the evidence of the structural engineers, Mr Edwards accepted that it was possible that there would not be much original fabric left following remediation works. However, he still applied the Burra Charter principle of "do as much as necessary and as little as possible".

The applicant's submissions

Submissions made by Mr Lazarus, counsel for the applicant, in summary, were: that the building and its curtilage did not meet the criteria for heritage listing; demolition of the dwelling would not have any detrimental impact on nearby heritage items, being Denistone Park and the hospital; and the dwelling is structurally unsound with the cost of remedial works excessive and unreasonable in light of the dwelling's condition and scale of rectification work required.
In this regard, the applicant's position and evidence was that the physical condition of the dwelling is relevant and can be considered in the assessment of heritage significance. Therefore, the intactness of the dwelling and associated remedial costs are relevant factors to consider when assessing the application to demolish the dwelling. The evidence showed that the cost of remedial rectification works required to bring the dwelling back to a habitable condition is excessive and an unreasonable burden on the applicant/owner.
It was the applicant's evidence that the site did not exhibit characteristics which satisfy any of the criteria or reach the relevant threshold for listing as a heritage item when assessed against the Heritage Guidelines. The issue of intactness is expressly identified as a guideline for exclusion in relation to many of the criteria of significance including that loss of integrity or condition may diminish significance.
Therefore, even if the dwelling did satisfy one of the criteria for listing, the state of dilapidation and extent of rectification works required would of itself exclude the dwelling from satisfying the criteria for listing. In this regard, the structural assessment and evidence from both the applicant and the Council's structural engineers is that the dwelling is in an extremely poor condition, is likely to collapse, and requires rectification work in excess of $1 million. Such works are clearly unreasonable and of themselves would require so much interference with the existing dwelling that they would not reasonably be undertaken.
It was also submitted that the Council's assessment of the dwelling's heritage significance was flawed as it had not identified the qualities of the dwelling and its surrounds which elevated it above the numerous similar examples of this housing form within the locality and in proximity to the site, including both listed and non-listed heritage items. Whilst the dwelling is a good example of an Inter-war Californian Bungalow, and has representative elements of buildings of that period, it is otherwise typical of the period. Further, there are no external features that are rare or unusual and which are not represented in other dwellings of the period in the vicinity. It was not built by a well-known or significant architect, had no historical event or person associated with it, there was nothing exceptional about the history or the type or form of subdivision, and is not a rare or endangered type of building in Ryde or in the Sydney region more generally.
Therefore, the property was of low heritage significance as a result of its common style and presentation, absence of any distinguishing features or associations, and current state of repair including structural inadequacy and extremely poor physical condition both internally and externally.
Mr Lazarus also noted that the dwelling was not listed or mentioned in any of the Council's three previous comprehensive heritage studies carried out in 1988, 2003 or 2010 despite claims of a prominent location.
He submitted that the question of whether the cost of rectification work would be unreasonable had been the subject of consideration by the Court previously and is a matter about which planning principles have been adopted.
In Helou v Strathfield Municipal Council (2006) 144 LGERA 322; [2006] NSWLEC 66 (Helou) then Moore C articulated these principles to assist in the assessment of the impact of a proposal on the heritage significance of a contributory item in a conservation area. Pearson C in Norm Fletcher & Associates Pty Ltd v Strathfield Municipal Council [2013] NSWLEC 1118 (Norm Fletcher) concluded that the same principles would assist by analogy when dealing with a heritage item at [63]: "63 The planning principle in Helou was expressed to apply only to contributory items in a conservation area, and not to demolition of listed heritage items, as is the case in this appeal. While acknowledging that distinction, I agree with the parties that the principles are of assistance by analogy, in particular in identifying that the reasonableness of the costs of remediation or rectification is a relevant factor in determining whether remediation or rectification should be preferred to demolition."
Noting that the site is neither within a conservation area nor is a heritage item but cognisant of the Planning Proposal to list the property as a heritage item, it was relevant to consider and address these planning principles, as follows. 1. What is the heritage significance of the conservation area? 2. What contribution does the individual building make to the significance of the conservation area? 3. Is the building structurally unsafe? 4. If the building is or can be rendered structurally safe, is there any scope for extending or altering it to achieve the development aspirations of the applicant in a way that would have a lesser effect on the integrity of the conservation area than demolition? 5. Are these costs so high that they impose an unacceptable burden on the owner of the building? Is the cost of altering or extending or incorporating the contributory building into a development of the site (that is within the reasonable expectations for the use of the site under the applicable statutes and controls) so unreasonable that demolition should be permitted? 6. Is the replacement of such quality that it will fit into the conservation area?
In responding to these principles: the existing building does not satisfy the relevant criteria for listing as a heritage item and the level of deterioration and interference required to rectify the dwelling excludes it from any criteria should they be met; the dwelling is not located within a conservation area and there are numerous other examples of Californian bungalows in the locality; and both structural engineering experts' agree that the building is structurally unsafe, should be vacated and requires rectification or demolition (principles 1-3).
Further, in terms of principle 4, the application seeks to demolish the building and subdivide the land. Any interference with the building to render it structurally safe would remove its heritage integrity which does not provide any realistic scope for extension or alteration to achieve the indicative development outcomes which could result from subdivision. It would also not meet the development aspirations of the applicant.
In terms of principle 5, the structural engineers agreed that the damage to the building is extensive and the cost of rectification is unreasonable requiring a wholesale rebuilding of the structure and removal of the roof. This level of work to a building which is not in a conservation area nor listed as a heritage item is manifestly unreasonable and militates strongly in favour of demolition.
Finally, in terms of principle 6, a development on each of the proposed lots could be designed and constructed so as to comply with the relevant planning controls and fit the character of the locality, which is not a conservation area.
In terms of the status of the Planning Proposal, whilst it has been notified and so is a relevant matter for consideration under s 4.15(1)(a) of the EPA Act, the imminence and uncertainty of the LEP being amended as sought is far from clear. This is due to conflicting heritage assessments, the fact that the DoP has retained the plan-making power, and the structural assessment provided which clearly identifies the dwelling at being at risk and noting that the Gateway determination expressly required consideration of the current condition of the dwelling. Further, it is not just the applicant who opposes the heritage listing: the majority of submissions lodged when the Planning Proposal was exhibited (40 out of 66) also opposed the listing.
Given this, and the clear uncertainty which surrounds the assessment of significance of the property and its ability to be retained in its current form, the Court could not attribute any meaningful weight to the amendment to the LEP and could not allocate it determinative weight having regard to the Court's findings in Terrace Tower.
To require retention of the dwelling with the required remediation works would impose an unreasonable economic burden on the owner. In Norm Fletcher, the Court found that this is a relevant consideration when considering demolition versus retention of heritage items. In this regard, and unlike Norm Fletcher, no development of the site can occur at all without demolition, so such development could not defray the cost to the owner, and the heritage listing of the site was not known to the owner at the time of purchase. This was not a case where the owner had deliberately neglected the building over many years with the evidence from the structural engineers indicating that, even if not neglected, the destruction of the dwelling was inevitable given the drought conditions. Further, all four relevant experts agreed that the remediation costs were an unreasonable burden on the owner which is itself determinative of the heritage issue.
Even the Council's heritage expert had agreed that, if the scope of remediation works argued to be required by the applicant's structural engineer was undertaken, there would not be enough original fabric left to warrant heritage protection.
Finally, it would not be in the public interest to retain a dwelling found to be structurally unsound, unsafe for occupation and requiring rectification works exceeding $1 million. On the contrary, it would be in the public interest to demolish such a building.

The Council's submissions

In submissions, Dr Berveling, counsel for the Council, confirmed that the heritage contentions were the major focus of the appeal.
He accepted that the Heritage Guidelines state that assessments should note the loss of the integrity or condition of an item and that this may diminish significance. However, they also state that care should be taken not to let the condition determine an item's significance.
The Council had resolved to proceed with the heritage listing of the site notwithstanding the physical condition of the dwelling as noted in the updated Davies Report and as advised in documentation provided by the applicant.
Further, whilst the structural engineers proffer an opinion on the extent of work that may be required to stabilise the dwelling, their assessment does not take into consideration the assessment of cultural heritage significance of the building and it is but one factor in determination of significance.
The Council maintained that the amendment to the LEP to list the item was imminent and certain noting the verbal advice of the DoP that the amendment would be finalised by January 2020, if not earlier.
In summary, it was the Council submission that the significance and appropriateness of listing the site as a heritage item under the LEP had been determined taking into account its physical condition, that listing was certain and imminent, and that remediating the dwelling remained feasible and appropriate with the impact of that remediation on the integrity of the dwelling and of the site acceptable.

Planning considerations

The site is located in the R2 Low Density Residential zone where subdivision is permissible but requires consent pursuant to cl 2.6 of the LEP. Demolition also requires consent: cl 2.7 of the LEP.
At cl 4.1B of the LEP, the minimum lot size for a dual occupancy in the R2 zone is 580m² and, for multi-dwelling housing, 900m². For either of these forms of development, the minimum street frontage required is 20m. Proposed Lots A and B respectively meet these minimum sizes and both have street frontages of at least 20m.
The planners disagreed that what was proposed would facilitate development that met the required objectives for the R2 zone but did agree that, with the retention of the boundary hedging, transplanting of the palm trees and retention of the existing trees, the landscape setting would at least be achieved in part.
In their joint Expert Report (Exhibit 3), the planners considered the proposed configuration of the two lots in terms of their capacity to accommodate future development.
No issues were raised in terms of proposed Lot B. However, Ms Thomas had a concern with proposed Lot A in that the lot's configuration and frontage were such that setbacks consistent with those prevailing in the area could not be achieved.
Mr Betros argued that both of the proposed lots achieve the minimum area and frontages required by the LEP including proposed Lot A. They must therefore be consistent with the size of lots and lot frontages envisaged by the LEP and with the objectives of the zone. The DCP could not impose more stringent requirements. Neither the LEP nor the DCP require lot sizes to be consistent with the prevailing subdivision pattern in the area. In any event, the area has a variety of lot sizes with lots occupied by both residential and non-residential uses such as Ryde Hospital and child care centres. There are also mixed housing types including multi-unit housing. The proposed lot configuration would therefore not be incompatible in this context.
Mr Betros did not rely on the indicative development plans submitted with the application as indicating the future development outcome on each lot. He accepted that it may be difficult to achieve a dual occupancy on proposed Lot A but believed the DCP requirements for a dwelling house could readily be achieved. In this regard, he produced an indicative building envelope for development of proposed Lot A (Exhibit J). He claimed this envelope complied with DCP setback requirements for dwelling houses and showed a 6m setback to Denistone Road. It also provided for flexible design responses for future residential development including in setbacks and driveway location.
Ms Thomas largely accepted the envelope for proposed Lot A comprising Exhibit J save for the front setback. She referenced the provisions of the DCP in terms of the desired characteristics of development within the R2 zone. These include dwellings being in a landscaped setting which includes a clearly defined front setback and large rear yard. In her view, with a frontage of only 4.89m to Florence Avenue, proposed Lot A would not be capable of development that would be compatible with this desired future character. It had insufficient dimensions and shape to accommodate a dwelling or dual occupancy without adverse impacts on the streetscape and on the amenity of future occupants and neighbours because of the inadequate building envelope.
In this regard, the envelope had a front setback significantly forward of the front setbacks of adjoining properties in Denistone Road, which range between 7.5m and 10m. Further, most front setbacks in the area generally exceed 6m. Should the front setback be increased to be consistent with these setbacks, there would be an inadequate rear setback and backyard. Proposed Lot A is on a prominent street corner which would result in a built form dominating the streetscape and incompatible with the desired future character of the area.
Mr Betros argued that the existing hedging and remnant trees could be retained to obtain a landscaped setting. In any event, any future development application would need to be assessed against the relevant provisions for whatever form of development was proposed which was permitted in the R2 zone.
Mr Lazarus submitted that: proposed Lot A is readily capable of complying with DCP controls for development; there is no requirement to mirror or comply with adjoining setbacks; there is no consistency in front setbacks in the area; the lot is on a corner offering a variety of design outcomes; and the application does not seek consent to a future development form which will be subject to a separate assessment process.
Dr Berveling submitted that the configuration of proposed Lot A, and the existence of the STIF (trees) on proposed Lot B, could have significant ramifications for the ability to develop the lots in the future, particularly in accordance with the indicative development forms submitted with the application.

Conditions of consent

Following completion of the hearing, the parties filed final proposed conditions of any consent. These conditions were agreed between the parties save for condition 12 which the Council proposed should read as follows: "12. Photographic Archival Recording. Prior to the commencement of any works, including the dismantling of fabric or demolition, a basic Photographic Archival Recording shall be undertaken and submitted to Council. Written confirmation must also be obtained from Council's Heritage Advisor, confirming that the Photographic Archival Recording is of an acceptable quality that satisfies the requirements of this condition. Council will provide a response to any submission within 21 days which either confirms that the recording is satisfactory, or if not satisfactory, clearly states what aspects of the recording are deficient and require rectification. Works are not to commence until such time as Council has issued confirmation that the Photographic Archival Recording is satisfactory. The Photographic Archival Recording shall be prepared in accordance with the guidelines "Archival Recording of Heritage Items Using Film or Digital Capture" published by the Heritage Division of the Office of Environment and Heritage. One complete copy of the Photographic Archival Recording shall be submitted to Council and shall contain (for digital projects): • A brief report or introduction which explains the purposes of the Photographic Archival Recording and gives a brief description of the subject site, as well as details of the sequence in which images were taken. The report may also address the limitations of the photographic record and may make recommendations for future work; • A site plan, marked up to indicate where the photographs were taken and the direction of the photograph; • The report should include all technical details including camera and lenses, image file size and format, technical metadata associated with the images, and colour information; • Catalogue sheets, photographic plan, supplementary maps; • Colour thumbnail image sheets (e.g. A4 page with six images by six images) showing images and reference numbers. The thumbnail sheets should be processed with archivally stable inks on archivally acceptable photographic paper and cross referenced to catalogue sheets; • One full set of 10.5x14.8cm (A6) colour prints, with at least one (1) image of each complete elevation externally and rooms internally, processed with archivally stable inks on archivally acceptable photographic paper. • A CD or DVD containing electronic image files saved as TIFF and RAW files with associated metadata, and cross-referenced to catalogue sheets. The report should be presented on archival quality paper in a suitable archival binder and slipcase, and all storage of individual components must be in archival quality packaging suitable for long term storage."
The applicant sought that the condition be amended to delete the requirement that works are not to commence until such time as the Council has issued confirmation that the Recording is satisfactory. Instead the condition should include a requirement that, if there is no response to the submitted Recording within the specified 21 days, the Recording is deemed to be approved.
The agreed conditions of consent include a condition requiring all trees on the site and adjoining to be retained and protected other than the 4 trees required to be removed to facilitate the demolition of the dwelling (condition 22). However, the wording of condition 22 is confusing as it then states that no trees are approved for removal. This could be inferred as requiring the 4 removed trees to be relocated on the site but neither condition 22 nor any other condition specifically requires this. Other conditions specify the protection requirements for the retained trees, including the STIF trees, as well as preparation of a Tree Management and Protection Plan (TMPP), at condition 23, and engagement of a project arborist to ensure this protection (condition 24).

Findings

The key contention in the proceedings, following amendment to the application, was the demolition of the dwelling and its heritage significance, including its landscaped (garden) setting. This was also the primary concern of objecting neighbours.
Based on the evidence of the heritage studies and the state of the property at the time that the Planning Proposal was instigated, I consider that the site, including the dwelling and its generous landscaped garden and corner setting, would have had sufficient heritage value to warrant listing the site as a local heritage item in the LEP.
This is on the basis of a number of factors.
Firstly, both HSAs included an analysis of other listings of Californian Bungalows in the vicinity. From that material, there appears to be listings of dwellings of a similar typology with no more distinctive features than the dwelling on the site but without the benefit of relatively intact surrounding gardens and an elevated corner location. Secondly, this is a local listing and I therefore accept the existence of similar styles elsewhere in the Sydney region is of lesser weight. Finally, the dwelling is on a substantially larger site than prevailing in the subdivision, at least in the vicinity of the site, and also enjoys a prominent location and outlook.
I therefore generally accept the findings of the original Davies Report in terms of the statement of significance for the site summarised at [34], excluding the commentary on the intactness of the dwelling. In terms of intactness, I agree with the criticism in the Urbis Report that the assessment of, and conclusions on, intactness, particularly of the interiors, should not have been solely based on the photos provided with the sale of the property.
Notwithstanding my findings that the site warranted the Planning Proposal and potential heritage listing at the time the Planning Proposal commenced, based on the expert evidence at the hearing, from the structural engineers in particular, given the state of the dwelling and the reasons given for this, when considered in conjunction with the costs and impacts associated with remediation of the dwelling, the site no longer warrants that listing.
However, as it has been publicly exhibited, the Planning Proposal is a draft environmental planning instrument (EPI) to which I must have regard under s 4.15(1)(a)(ii) of the EPA Act. It is then a matter of how much weight or significance I should give to the draft EPI given the Court's finding in Terrace Tower.
On the basis of the condition of the dwelling, and the consequences of this, and notwithstanding the status of the heritage listing of the site, I am of the view that the demolition of the dwelling is warranted and is therefore not a basis to refuse the application.
Further, and notwithstanding verbal advice to the Council from the DoP to the contrary, and albeit the Planning Proposal has the status of a draft EPI under s 4.15 of the EPA Act, I do not necessarily accept that the heritage listing of the site in the LEP is certain and imminent, for several reasons.
Firstly, the Council is not the plan-making authority as the DoP acknowledges the difference between the parties as to the site's heritage significance. Secondly, and more relevantly, there is expert advice now in evidence of the extent of physical deterioration of the dwelling, the reason for this, and the consequence for remediation. Such remediation would not only be at a cost not reasonable to impose on the owner but involve significant removal of original fabric such as to destroy the heritage significance of the proposed item. In this regard, the DoP were specifically concerned to ensure the physical condition of the dwelling was considered. Finally, the majority, or some 61%, of the submissions on the Planning Proposal opposed the listing.
Even if it is the case that the listing of the site as a heritage item in the LEP is certain and imminent, and I consider and have regard to the provisions of cl 5.10 of the LEP accordingly, refusal of the application on the basis of the demolition of the dwelling is not justified even with such a listing given the state of the dwelling, the cost and consequence to original fabric associated with remediation works, and the expert advice that such works may not in any event result in the dwelling's retention.
Clause 5.10 does not preclude demolition of a heritage item, even were the site listed, providing I first consider the effect of the development on the heritage significance of the item. I have considered that effect and concluded that the current state of the dwelling, and the cost and impact of remediating it, reduces the heritage significance to such an extent that demolition, as proposed in the application, is justified.
My findings are largely based on the evidence of the structural engineering experts for both parties. That is, and albeit objectors may disagree, that the deterioration in the condition of the dwelling, now occurring at an exponentially fast rate, is not the consequence of human intervention (by the applicant or otherwise) but largely a consequence of drought conditions and the lack of water to the reactive clays on which the dwelling is situated.
Whilst this deterioration in the structural condition of the dwelling may have been exacerbated by the lack of watering, or conversely continuous watering of the garden as likely occurred in the past may have slowed the deterioration, the lack of water in the soils has resulted in the extensive damage to the dwelling now in evidence. The applicant could not have reasonably known of such an outcome.
Further, the extent of work required to remediate the damage is not of a scale that has previously been overseen by the experienced structural engineering experts who gave evidence and therefore they could not guarantee that such works would indeed 'save' the dwelling.
I therefore accept the applicant's submission that such works are clearly unreasonable and would require so much interference with the existing dwelling that they would not reasonably be undertaken.
As with Helou at [5] "the issue which was determinative in this appeal was not as to the heritage value of the dwelling but whether the cost of necessary repairs to rectify present and future damage (caused by cracking as a result of movement in the footings of the dwelling) was so uneconomic that the demolition should be permitted".
Court Planning Principles were established in Helou as an appropriate approach to determine development applications for demolition of a contributory building in a conservation area, being a series of questions which should be considered when assessing such applications. These Planning Principles, or questions, were then analogously applied in Norm Fletcher as a basis to assess an application involving demolition of a heritage listed item.
I have considered those questions in this instance and find the answers are such that demolition should be permitted.
This is because, unlike in Helou, there is an indication that the building "is so structurally unsound as to pose risks to any inhabitants' and therefore 'an immediate or foreseeable safety or health imperative arising from the movement in the footings which would warrant demolition" (Helou at [49]). Accordingly, this would lead to a presumption in favour of demolition having regard to Helou at [51].
In Norm Fletcher, the central issue was also whether the cost of doing remediation work to a heritage item would impose an unreasonable burden in the circumstances, such that demolition should be approved (at [4]). At [24], Commissioner Pearson noted that: "-…In considering whether demolition should be approved, it is necessary to consider whether the building retains heritage significance in its present state, or would if reconstructed. If it does, the cost of doing the work required is a relevant factor in what the parties agreed is a balancing exercise, which requires consideration of the heritage value of an item that requires considerable repair and reconstruction and the reasonableness of the financial impost on the private owners of that heritage item."
In that instance, demolition was not approved. However there are key differences in terms of that appeal and the one now before me, including that there was a dispute between the parties as to whether underpinning would be required, it was not in dispute that the building had heritage significance before it deteriorated, and it was found that undertaking identified remediation work at the time it was required would not have diminished the heritage significance of the building. Further, that the heritage item could be retained whilst still leaving substantial potential for additional development on the site, thus assisting in defraying the cost of conserving the building. Finally, the owner had purchased a listed heritage item and then allowed its condition to deteriorate over several years.
None of those circumstances apply to this appeal. In this regard, I accept the applicant's submissions that the grounds given to require the building's retention considering the Planning Principles in Norm Fletcher do not apply here. In particular, no development of the site can occur at all without demolition so such development could not defray the cost to the owner, the heritage listing of the site was not known to the owner at the time of purchase, and this is not a case where the owner has deliberately neglected a listed heritage building over several years.
In Norm Fletcher, Commissioner Pearson stated in conclusion at [71] that, in terms of the listed heritage item in that instance: "71… Demolition would destroy its heritage significance. In circumstances where the building can be repaired and reconstructed so as to retain its heritage significance, and the costs of doing that work do not impose an unacceptable burden on the owner, demolition should not be permitted".
The converse must therefore be true. That is, in circumstances where a building cannot be repaired and reconstructed so as to retain its heritage significance, and the costs of doing that work imposes an unacceptable burden on the owner, demolition should be permitted.
As the dwelling is agreed to be structurally unsound and prohibitively expensive to (potentially) retain in any meaningful heritage form, I must accept that its demolition should be permitted and is in the public interest.
Put another way, whilst the demolition of the dwelling house is regrettable given its heritage attributes, I accept that, without undisputed expert evidence and conclusions that it can reasonably and feasibly be restored, it would not be in the public interest to require such actions. To the contrary, it would be unreasonable to refuse the application on the basis of requiring the retention and restoration of the dwelling.
However, what can be reasonably and seemingly feasibly retained in any approval to the subdivision are the dominant landscape features of the site, being the perimeter trees, and the STIF trees in particular. Other than the 4 trees required to be removed to facilitate the demolition, all remaining trees are required by conditions of consent to be retained and protected as part of any consent to the subdivision works.
The agreed trees required to be removed are not proposed to be relocated in the conditions of consent. This is notwithstanding that the arborists agreed that they could be relocated if sufficiently healthy, and they add to the landscape feature of the site. Based on the evidence of what these 4 trees are, it is my view that any consent granted to the application should require the cabbage tree palm (tree T6), which is some 40 years old and a landscape feature of the site, to be relocated if it is found to be healthy and able to survive relocation to an agreed location elsewhere on the site which will not be affected by the subdivision works.
The issue then turns to whether configuration of proposed Lot A is a sufficient ground to refuse the application.
In this regard, I accept the contention of the Council that the configuration of proposed Lot A, and its limited frontage to Florence Avenue in particular, restricts how that lot could be developed in the future in a manner that adequately addresses the streetscape and would achieve amenity for future occupants and neighbours. However, on the evidence, I cannot conclude that proposed Lot A's configuration precludes such a development being designed to achieve these requirements, albeit it may not be a dual occupancy development. That is a risk borne by the applicant.
Therefore, whilst ideally proposed Lot A would be reconfigured, it is not the role of the Court to require ideal development. Both proposed lots achieve the minimum frontage width and lot area required by the LEP and these cannot therefore be reasonable grounds for refusal, particularly given no built form development is sought by the application.
Applications for future development will need to address the landscaped setting of the site, retention of the STIF and other significant trees, and the ability to provide safe access, noting the concerns raised by objectors in terms of such access. However, there was no evidence that these issues could not be addressed and they are not matters required to be addressed in the subdivision beyond the retention of existing trees, which the conditions of consent address.
Therefore the configuration of the lots is not a basis to grant refusal.
Consent is granted to the (amended) application accordingly. This is to be in accordance with the conditions of consent filed by the Council subject to the following qualifications or amendments.
In terms of condition 12, I impose the condition as sought by the Council. It requires a response within 21 days from the Council on the Archival Recording submitted and the condition contains the details of what that Recording is to comprise. If it is unsatisfactory in that regard, and the Council identifies this as the condition requires within 21 days, the condition needs to ensure works do not commence until a satisfactory Recording is submitted. I do not therefore consider it reasonable to provide default satisfaction should a response not be provided by the Council within 21 days as sought by the applicant. The Council, like the applicant, is required to comply with any imposed requirements of the consent.
Having said that, the agreed unsafe current structural condition of the dwelling as identified in these proceedings is such that it would be the Court's expectation that the applicant would submit a Recording in accordance with the requirement of the condition, and that the Council would confirm its approval to that Recording, in a timely manner, and that this approval would not be unreasonably withheld.
In terms of condition 22 which approves removal of 4 trees, I have amended this condition to require that tree T6 (referred to as Tree 6 in that condition), the cabbage tree palm, is to be relocated, rather than simply removed, if the TMPP required by condition 23 identifies that such relocation is feasible in terms of the health of the tree. If such relocation is found to be feasible, the TMPP is therefore to identify how Tree 6 is to be relocated prior to demolition being undertaken and its alternative location on the site where it will not be affected by the subdivision works. If the TMPP identifies that the health of the tree is such that relocation is not feasible, the tree can be removed and not relocated. Conditions 22 and 23 have been amended accordingly.
I accept that the other 3 trees to be removed are not so significant in the landscape as to warrant their relocation albeit this does not preclude the applicant from seeking approval to relocate them and this being dealt with and shown in the TMPP required by condition 23 accordingly.

Orders

The orders of the Court are: 1. The appeal is upheld. 2. Development Application LDA2018/0340 for demolition of existing structures, consolidation of 3 lots, and subdivision of the consolidated lots into 2 new lots is approved subject to the conditions in Annexure "A". 3. The exhibits are returned except for Exhibits B, G, H and 1.

Jenny Smithson Commissioner of the Court Annexure A (1.71 MB)

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 16 December 2019

(2006) 144 LGERA 322

(2003) 129 LGERA 195

At a glance

Court

Decision date

Source

Judgment (11 paragraphs)

Parties

Cases Cited (5)

Cited By (1)