ABAX Contracting Pty Limited v The Hills Shire Council

The appeal to the Court

1. ABAX has appealed to the Court pursuant to s 97 of the Environmental Planning and Assessment Act 1979 (the Act) against the deemed refusal of its development proposal.
2. After abandonment by the Council of the contention that the development was prohibited, the Council pressed a number of contentions which it said, individually (and certainly cumulatively), warranted refusal of the development. Although pleaded in a deal of particularity, these grounds may be summarised conveniently as: The proximity of the proposed development to the Treatment Plant means that the vast majority of the site (encompassing virtually all - but not the entirety - of the proposed development on it) was within what should be regarded as the appropriate buffer area for the Treatment Plant. The buffer area was required to ensure that relevant odour guidelines published by the Environment Protection Authority (the EPA) were not breached; The proposed floor area for the proposed commercial/retail component of the proposed development was of such a scale that it would constitute an attractor economic centre of activity at a location not contemplated in the broad planning framework for the sector and, as a consequence, it was contrary to the Council's policy on such matters and in breach of one of the objectives for the zone within which the site is located; The design of the proposal was inappropriate in that it did not address its primary frontage to Withers Road in a fashion that satisfied the relevant provisions of the Apartment Design Guidelines; and As portion of the site was zoned SP2, along the Annangrove Road frontage (with this zoning being for the purpose of permitting future widening of Annangrove Road), the setback of the proposed development from that zone boundary did not comply with the Council's planning control requirements for that purpose.
3. There were also several detailed aspects of the design of the central two apartment buildings that were said to be deficient. These design aspects were, however, able to be resolved with minor design changes were I to be satisfied that the development otherwise warranted approval but that these matters required rectification. Given the outcome of the general matter, it is not necessary to address these matters of detail.

The planning controls

1. The relevant planning controls and Council policies that require consideration in these proceedings are: The Hills Shire Council Local Environmental Plan 2012 (the LEP); The Hills Shire Development Control Plan 2012 (the DCP); The Council's Centres Direction (the Policy); The Apartment Design Guidelines; The Odour Impact Guidelines published by the EPA; and A planning proposal adopted by the Council, which planning proposal seeks to amend the LEP to remove from land zoned B6 under the LEP the possibility of incorporating shop top housing as part of any development proposal for land so zoned.
2. The planning proposal adopted by the Council and forwarded to the Minister to be made (the proposal being that "shop top housing" be prohibited in the B6 zone) was both imminent and certain and should be given determinative weight warranting refusal of ABAX's proposed development.

The site inspection

1. As is customary in Class 1 appeals, I attended the site at the commencement of the first day of the hearing. The site is a largely cleared, open, grass rectangular space with a frontage of 93 metres to Annangrove Road and a frontage of 220 metres to Withers Road. It has an area of 26,940 square metres. Although there are a small number of substantial remnant trees in the north-western quadrant of the site, and these are proposed to be removed if ABAX's development is approved, no issue concerning this arises in these proceedings.
2. Whilst on site, I inspected a model of the proposed development, a model that was subsequently tendered. Although the model was a representation of an earlier iteration of the plans for the proposed development, the changes were matters of detail so that it provided a sufficient representation of the proposal in its site context for the purposes of these proceedings.
3. Although screened from the point on the site where we inspected the model and heard evidence from three lay witnesses, it is as earlier noted that the Treatment Plant is located to the north-east of the site. The extent to which the Treatment Plant might impose restrictions on the development of the site is a matter of significant contest in the proceedings and is discussed in more detail later.
4. The three lay witnesses who gave evidence during the course of the site inspection were: 1. Ms Vorreiter, an employee of Sydney Water. She spoke in objection to the proposal and it will be necessary to return to her evidence in more detail. She read from a written statement, a document which was subsequently tendered and from which an extract is reproduced later; 2. Mr Madill, a resident of a property on the eastern side of Annangrove Road, near to the site to its north but not adjacent to it, gave evidence in support of the proposal. Relevantly to the matters requiring determination, he indicated that he had lived there since before the Treatment Plant had been constructed and had not experienced, at any time since the Treatment Plant had become operational, any detectable odour from the Treatment Plant at his home. 3. Mr Messina also gave evidence in support of the proposal. His residence was on the western side of Annangrove Road, a little offset from the intersection of Annangrove Road and Withers Road. His evidence was that he had lived there for 35 years and had never experienced any odour from the Treatment Plant. With respect to his evidence, it is to be noted, however, that the modelled odour contours of emissions from the Treatment Plant (later requiring detailed consideration) show that his residence is outside the 2 odour unit contour and thus, on the uncontested expert evidence of Mr Roddis (ABAX's odour expert), there was never any prospect of Mr Messina experiencing any detectable odour at his residence.
5. A photograph of the model of the development proposal was tendered and a copy is reproduced below:

The zoning of the site

1. The site is zoned B6 Enterprise Corridor under the LEP. The relevant portion of the land use table for this zone is in the conventional four-part structure adopted for local environmental plans prepared utilising the Standard Instrument template. The relevant portion of the land use table in the LEP for the B6 zone is in the following terms: Zone B6 Enterprise Corridor 1 Objectives of zone To promote businesses along main roads and to encourage a mix of compatible uses. To provide a range of employment uses (including business, office, retail and light industrial uses). To maintain the economic strength of centres by limiting retailing activity. To provide for residential uses, but only as part of a mixed use development. 2 Permitted without consent Nil 3 Permitted with consent Building identification signs; Business identification signs; Business premises; Community facilities; Food and drink premises; Garden centres; Hardware and building supplies; Hotel or motel accommodation; Landscaping material supplies; Light industries; Neighbourhood shops; Office premises; Passenger transport facilities; Plant nurseries; Roads; Self-storage units; Serviced apartments; Shop top housing; Timber yards; Vehicle sales or hire premises; Warehouse or distribution centres; Any other development not specified in item 2 or 4 4 Prohibited Agriculture; Air transport facilities; Airstrips; Amusement centres; Animal boarding or training establishments; Boat building and repair facilities; Boat launching ramps; Boat sheds; Camping grounds; Caravan parks; Cemeteries; Charter and tourism boating facilities; Commercial premises; Correctional centres; Crematoria; Depots; Eco-tourist facilities; Electricity generating works; Entertainment facilities; Environmental facilities; Exhibition homes; Exhibition villages; Farm buildings; Forestry; Freight transport facilities; Function centres; Heavy industrial storage establishments; Helipads; Highway service centres; Home-based child care; Home businesses; Home occupations; Home occupations (sex services); Industrial training facilities; Industries; Jetties; Marinas; Mooring pens; Moorings; Mortuaries; Open cut mining; Port facilities; Recreation facilities (major); Research stations; Residential accommodation; Resource recovery facilities; Restricted premises; Rural industries; Sewerage systems; Sex services premises; Signage; Storage premises; Tourist and visitor accommodation; Transport depots; Waste disposal facilities; Water recreation structures; Water supply systems; Wharf or boating facilities
2. For the purposes of these proceedings, matters arise for consideration concerning the extent to which ABAX's proposed development satisfies the various zone objectives set out above. In this context, it is to be observed that the requirement of the LEP for assessment of development proposals utilising the framework of a zone's objectives is contained in cl 2.3(2) of the LEP, a provision in the following terms: 2.3 Zone objectives and Land Use Table (1) ... (2) The consent authority must have regard to the objectives for development in a zone when determining a development application in respect of land within the zone.

Matters for determination

1. As a consequence, as I understood the way the Council's case was advanced, there are two questions of broad generality that I am required to consider and, depending on whether either or both of those find favour or not, a residual question of greater specificity. The questions of generality can be put as: is it appropriate to contemplate any residential development being permitted on this site; and is commercial/retail development at the scale proposed appropriate to be considered for this site?
2. If either or both of those questions are determined in the fashion proposed by the Council (that such development is not appropriate for the site, in each instance), then I do not need to proceed to consider the more specific question of whether or not ABAX's proposed development is appropriate to be approved for the site.
3. However, as I have concluded that the first two questions should be answered contrary to the position advocated by Mr Staunton, barrister for the Council, it is necessary to move to consider the more specific proposition.
4. I therefore turn to an analysis of the first two propositions to explain why I have reached a conclusion against the Council's position on each of them before turning to consider the merits of the specific development proposal.

Odour emissions from the Treatment Plant

1. Mr Roddis had provided a detailed statement of evidence on odour emissions from the Treatment Plant and had taken part in a joint expert conference with Mr Swan, the Council's town planning expert. At the commencement of their joint concurrent evidence, Mr Galasso SC, counsel for ABAX, questioned Mr Swan about his qualifications to engage at an expert level, with Mr Roddis, on odour issues. It is unnecessary to detail the nature of this cross-examination; it is simply appropriate to record that I was satisfied that Mr Swan could appropriately give evidence on planning impacts relating to odour emissions but that there was no basis to consider he had relevant expertise in technical aspects of odour monitoring, modelling or analysis. As a consequence, the relevant oral evidence on this point was given solely by Mr Roddis.
2. Mr Roddis' written and oral evidence relevantly dealt with three aspects of current or potential future odour emissions from the Treatment Plant. In summary, they were: The basis for, and outcome of, modelling of the present emissions from the Treatment Plant (taking into account emission levels, emission source locations within the Treatment Plant and relevant wind and other meteorological data (including seasonal variation factors)) to produce an odour contour diagram reproduced by superimposition on an air photo of the plan. This present odour modelling outcome and its interrelationship with the site requires more detailed consideration, to be dealt with later; His expectations of emission outcomes from the Treatment Plant if the plant was to have its capacity expanded significantly; and Qualitative matters of odour detectability and how that interacted with EPA odour criteria based on population density. This latter point also arises in the context of the town planning issues.

The odour modelling

1. Mr Roddis, in his individual expert report, explained the nature of the odour modelling that had been undertaken to draw a series of contours around the Treatment Plant plotted at various odour unit intervals. The basis upon which these intervals are calculated, in general terms, has earlier been described. A copy of the relevant odour interval plotting diagram from his expert report is reproduced below:
2. From this diagram, it can be seen that the site of the proposed development is shaded orange and located toward the lower left-hand corner of the diagram. It can be seen that the 2 odour unit contour passes through the site and has approximately 70% of the site falling between the 2 odour unit contour and the 3 odour unit contour. The significance of this requires, in my assessment, being considered on three separate bases. First, the EPA has produced guidelines that propose what is the appropriate density of development appropriate to be permitted by reference to an odour unit contour diagram of the nature that has been produced by Mr Roddis for this Treatment Plant.
3. Mr Roddis reproduced a table that set out the EPA guideline elements. That table is also reproduced below: Table 2.2 Odour assessment performance criteria Population of affected community Odour Units (OU) Rural single residence (≤ ~2) 7 ~10 6 ~30 5 ~125 4 ~500 3 Urban (~2000) and/or schools and hospitals 2 Sources: DEC, 2005, p.38, OEH, 2006a, p.21

1. Although there was a degree of imprecision in the planning evidence on this point, I am satisfied that the overall result of the evidence given by Mr Haskew, town planner for ABAX, and Mr Swan, in his town planning capacity for the Council, was that the final category of the EPA guideline table was applicable.
2. Although, as I understood it, Mr Haskew and Mr Swan came to such a conclusion by differing paths and with differing degrees of certainty, there was sufficient broad coincidence in consideration of how one might derive a population density for these purposes that such a density would, for the future, reasonably probably engage the highest category within the EPA guideline table.
3. I make this observation in the context that I specifically reject the proposition initially advanced by Mr Haskew that the appropriate basis for calculating the relevant population density might be to do it on some shire-wide calculation. I reject that proposition because it is clearly appropriate to address the concerns of this particular Treatment Plant in the context of its location and how that location might impact on expected and known activity in the vicinity.

Future expansion of the Treatment Plant

1. I earlier noted that, during the course of the site inspection, a representative of Sydney Water had attended and given evidence, informally, as to why that public authority objected to the proposed development. A copy of the statement from which she had read was later tendered. An important aspect of that, which was also dealt with by Mr Roddis during the course of his oral evidence, concerned the need for Sydney Water to expand the capacity of its Treatment Plant in order to accommodate future development in the north-west sector. In that regard, the evidence for Sydney Water was: 7 Sydney Water's position is that residential development (including hotels, motels and serviced apartments) are not compatible land uses within the compatible land use zone next to Rouse Hill Water Recycling Plant. Compatible land use in the context of Sydney Water's buffer policy and the Department of Planning's E3 circular includes open space, industrial, agriculture and public road uses. EPA guidelines also suggest that land use close to existing Treatment Plants should be those least sensitive to odour such as car parks or certain commercial areas. This is due to the high risk of odour impacts that would make residential living uncomfortable or require very costly works at the plants to mitigate this. 8 Sydney Water's other objection to the development application is based on the potential odour, noise and visual impact to the residents. The location of the proposed development is approximately 150m from the boundary of the Rouse Hill WRP and approximately 400m from current odour sources. Odour dispersion modelling is a tool used to assess the extent and area of potential impact of odours from a facility. The EPA has a range of acceptable odour criteria. These range between 2 to 7 OU and is related to population density. The reason for this is that with higher population, the likelihood of having sensitive people in the area increases. Odour Dispersion Modelling undertaken according to EPA guidelines by Pacific Environment Limited shows that the development lies between the 2OU and 3OU contours. Even though the EPA's odour assessment criteria suggest that this is acceptable for the number of residents proposed for this development, Sydney Water from experience considers the risk of odour impacts in not acceptable. It is widely recognised that sensitivity to odours within the community is variable and in particular the climatic conditions and extended periods of low winds in this area pose an unacceptable risk to both the residents and Sydney Water. 9 Population growth currently occurring in the North West sector and the North West Rail corridor means that the Rouse Hill WRP will need to be amplified within three to four years. Planning for this amplification will commence this year and is likely to require expansion of the Plant footprint. A larger footprint will potentially increase the visual and odour impact risk as it may bring the process units closer to the plants' southern boundary and the proposed development.
2. Mr Roddis was asked, during the course of his oral evidence, about odour potential increase when the Treatment Plant was eventually expanded. It was his suggestion, contrary to a response given by Sydney Water's representative during the course of the oral evidence on site, that he expected that the Treatment Plant would expand to the north (that is, away from the site). The Sydney Water representative had indicated that there were potential restrictions on expansion in that direction as a consequence of the presence of Cumberland Plain Woodland on that portion of the Sydney Water site.
3. Mr Roddis said that he expected that it would be possible to expand the capacity of the Treatment Plant without altering its odour contour footprint. He did not, however, suggest that any expansion of the Treatment Plant could be done in a fashion that in any way mitigated the extent of the present odour contour footprint.
4. The approach to be taken, therefore I conclude, is to assume that the potential for development on this site must be assessed in the context of the present odour footprint and the EPA guidelines. It would, in this context, be appropriate, I consider, to adopt a precautionary approach about the extent of the development that might be contemplated on the site.
5. Proceeding on this basis, the position is that, ideally, the 2 odour unit contour would act as a barrier to development of the site. Indeed, that is the basis for the submission made on behalf of the Council that development of the nature here proposed could not be acceptable on this site.
6. If the position requiring to be assessed was one as simple as that, this might well be the resultant conclusion to be drawn. However, the position is not as simplistic and a more nuanced approach would appear to me to be appropriate. This arises for several reasons.
7. First, Mr Roddis explained that, as there are differing sensitivities to odour within any population group, an odour contour is drawn in a fashion that responds to this population odour sensitivity diversity by adopting a risk management approach. An odour contour is drawn based on, as I understood his evidence, a 1% sensitivity probability. It was his evidence that, in the ordinary course of events, it was probable that an odour increment between the 2 odour unit contour and the 3 odour unit contour would not ordinarily be detectable to the human nose.
8. Second, Mr Roddis indicated that it was not ordinarily the case that there would be any analysis undertaken of odour calculations on an incremental basis between whole integer odour unit contours. He indicated that, ordinarily, there would be a rounding-up/rounding-down process undertaken for consideration of impacts within the band between odour unit contours (as would here be the case between the 2 odour unit and 3 odour unit contours).
9. However, Mr Roddis produced a detailed diagram showing 10 potential receptor locations on the perimeter of the site for which he had undertaken detailed calculations. It is appropriate at this point, before moving to the next detailed odour aspect requiring consideration, to reproduce a copy of the diagram he produced showing the location of each of these receptor locations for which he had undertaken an odour impact calculation. That diagram is reproduced below:
10. The final matter to be observed before considering what broad planning approach should be taken to these issues is the fact that it was Mr Roddis' expert evidence that the odour contour diagram earlier produced shows the odour contour intervals at ground level. It was his evidence that odour intensity diminished in vertical section. To illustrate this, he produced a table showing the odour intensity at each of the 10 identified receptors at ranges of height from ground level to 16 metres above ground level. It is unnecessary to reproduce the totality of this table but I have extracted, to enable an understanding of my subsequent analysis, his vertical odour impact analysis for receptors 1, 2, 9 and 10, receptors which can be seen to be, from the earlier receptor location plan, located immediately on either side of the 2 odour unit ground level contour as it crosses the site boundaries. The extracted values are: Table 5.2: Modelled 99th percentile odour concentrations at discrete receptors Receptor 99th percentile 1 - second average odour concentration (OU) Number Ground-level 5 m above ground-level 6 m above ground-level 9 m above ground-level 10 m above ground-level 12 m above ground-level 16 m above ground-level 1 2.0 1.8 1.7 1.5 1.4 1.2 1.0 2 2.2 2.0 1.9 1.6 1.5 1.3 1.1 … 9 2.1 1.9 1.8 1.5 1.4 1.2 1.0 10 2.0 1.8 1.7 1.5 1.4 1.2 0.9

1. These values provide, self-evidently it seems to me, a proper basis to conclude that, if there were to be multi-level development permitted on the site, the greatest possibility for compliance with the EPA odour guideline criterion engaged from the earlier set out table would be to have as much of the development outside the 2 odour unit contour and, to the extent that that would not be possible, to have the development located as far away from the 3 odour contour as practicable in order to ensure that the upper levels of the development fell outside the 2 odour unit contour as it receded toward the Treatment Plant the higher the development was erected.
2. Such a design approach would reflect, in a proper precautionary fashion, the desirability of maximising compliance with a receding 2 odour unit contour when considering design options in a vertical odour unit assessment framework.
3. Unfortunately, the design for which ABAX seeks approval does not reflect such a design philosophy; indeed, the development toward the north-eastern corner of the site (the corner most proximate to the Treatment Plant) is the location where are proposed the highest built form elements. From an examination of the full version of the height/odour contour calculations undertaken by Mr Roddis, and reproduced in his report, it is likely that the odour level at the uppermost levels of the north-eastern ends of buildings C and D might be close to the order of 3 odour units. This clearly represents an inappropriate design approach, in an odour impact context.
4. However, it is to be observed that an odour impact context is not the sole framework within which this assessment is to be undertaken.
5. However, in that odour impact context, it seems to me that, for this element of my analysis, the broad conclusion to be drawn is not that, on such a basis, development of the intensity sought by ABAX is inappropriate but merely that, on that odour basis, it might be regarded as inappropriately located within the site.

The planning proposal

1. On 9 December 2014, the Council resolved to proceed with a planning proposal that would amend the LEP. The planning proposal was entitled "North Rocks Industrial Precinct Review and Planning Proposal". Although the title implied that the proposed amendments to the LEP related to issues in the North Rocks Precinct, in fact the planning proposal, in addition to dealing with the specific identified parcels of land in the North Rocks Precinct, also proposed to remove from the B6 zone, the permissibility of shop top housing and transfer that land use to the list of prohibited uses in that zone.
2. To the extent that there is any general discussion in the planning proposal document adopted by the Council of this aspect of the proposal, it is contained in three places in the document adopted by the Council. The first is in the executive summary, where the following appears: To facilitate future investment and employment diversity, it is proposed to rezone the precinct from IN1 - General Industrial to B6 - Enterprise Corridor and reduce the minimum lot size from 8,000 square metres to 4,000 square metres. It is also proposed to remove shop top housing from the permitted land uses within the B6 zone to reduce potential for land use conflict which may inhibit future employment development.
3. The second place is almost immediately underneath the diagrammatic depiction of the proposed zoning changes within the North Rocks Precinct. This comment (emphasis added by me) forms part of a paragraph in the wider commentary. That paragraph is in the following terms: In order to retain an employment focus, the planning proposal also seeks to prohibit shop top housing within the B6 - Enterprise Corridor zone. Associated amendments are proposed to setbacks within the Development Control Plan and a Public Domain Plan has been prepared to provide the precinct with a sense of identity and to improve its amenity.
4. The final comment is under the heading "Shop Top Housing" where the planning proposal deals with submissions that had been made in opposition to this proposed broadly impacting amendment to the LEP. It is appropriate, to give the relevant contextual understanding, to reproduce the total of the commentary in the planning proposal on this topic, although only the second of the two paragraphs is relevant to the issue in these proceedings. This element of the planning proposal read: Shop top housing In order to ensure the viability of North Rocks as an employment area, it is necessary to limit potential land use conflicts. Whilst residential and industrial uses currently exist alongside one another in North Rocks, substantial setbacks in the buffer of Excelsior Reserve minimise conflicts. It is not desirable to introduce residential uses within the precinct itself since it may deter business investment and restrict operations. Shop top housing on B6 zoned land is not required to meet dwelling targets. There is sufficient residential and mixed use zoned land in the shire to cater for medium and high density development. The proposed deletion is consistent with a proposed change to State Environmental Planning Policy (Sydney Region Growth Centres) 2006 for the Box Hill industrial area.
5. The progression of this planning proposal has been complicated by the fact that the Governor's proclamation on 12 May 2016, Local Government (City of Parramatta and Cumberland) Proclamation 2016, effected a local government area boundary adjustment impacting on the planning proposal. This local government area boundary adjustment had the effect of transferring to Parramatta City Council the relevant precinct within which the site-specific elements of the planning proposal are located. It is the agreed position of the parties to these proceedings that Parramatta City Council no longer supports the site-specific element of this planning proposal.
6. Nonetheless, the position adopted by the Council in these proceedings is that I should regard the residual relevant element of the planning proposal (the transfer of "shop top housing" from a permitted to a prohibited use in the B6 zone, together with the removal of the fourth of the zone objectives for the B6 zone earlier set out) as being imminent and certain.
7. If I were to accept this proposition, Mr Staunton submitted that I should give significant (if not determinative) weight to this proposed prohibition.
8. In support of this submission, the Council tendered a statement of evidence by Ms Munari, the Principal Forward Planner employed by the Council. Ms Munari was cross-examined by Mr Galasso on the matters contained in her statement.
9. In brief, her oral evidence was to the following effect: Although the Council had not reconsidered the planning proposal in circumstances where the site-specific element was no longer a matter within the jurisdiction of the Council as a consequence of the precinct's excision, she was of the view that the Council remained supportive of the other elements of the planning proposal; and The broader amendments proposed for the objectives and permitted/prohibited uses in the B6 zone remained relevant and appropriate.
10. Ms Munari's statement dealt with the most recent conversation she had had with an officer of the Department of Planning concerning this planning proposal. This was described by her in her statement in the following terms: 14 On Tuesday 2 August 2016 I had further discussions with the Department of Planning (Chris Browne). Chris Browne informed me that the Department's current position with regard to the draft LEP (in relation to the prohibition of shop top housing in the B6 zone) was as follows: a) The Department is seeking legal advice with respect to the making of the plan and in particular about the following issues: i) the potential need for a new Gateway Determination; ii) the potential to re-exhibit the proposal; iii) the planning proposal being seven months' overdue to be finalised; and iv) the prohibition of shop top housing not being listed in Part 1 of the Planning Proposal document when it was placed on exhibition; b) The legal a dvice is unlikely to be available until mid-next week (11 August 2016 approximately but this is not a guarantee).
11. She also said, in her oral evidence, that she had been unable to have a further, current conversation with the relevant officer of the Department of Planning as he was absent on leave during the week of the hearing of this matter.
12. Mr Galasso submitted that a proper understanding of the present position of the Department of Planning should lead me to the conclusion that the remaining elements of the planning proposal were neither imminent nor certain and that, as a consequence, the proposed changes to the B6 zoning should be given no (or, in the alternative, very little) weight.

The Council's Centres Direction Policy

1. The Council's Centres Direction (the Policy) is a document that was adopted by the Council in June 2009. It is a document which describes itself, relevant to these proceedings, as: The Centres Direction will provide an overall strategic context for the planning and management of the Shire's centres and their development and growth to 2031. It supports the commitments contained in Hills 2026 Community Strategic Direction, in particular the development of vibrant communities.
2. The 2010 proposed LEP was the proposed local environmental plan based on the Standard Instrument template that became the LEP made in 2012 and applicable to ABAX's development proposal. There are, as Mr Galasso submitted, two aspects of the document that warrant consideration in the circumstances of this development proposal. The first is the discussion of what might be the appropriate distinguishing feature between the two lower levels of the Centre's hierarchy discussed in the Policy and the fact that that which was so discussed had, in fact, not been reflected in the final, adopted version of the LEP. Second, as a consequence of this, the Policy should be regarded as being without further functional utility as a consequence of the making of the now applicable LEP in 2012.
3. On the first aspect, it is to be observed that the Policy says: The Standard Template provides for a hierarchy of centres, including zone B1 'Neighbourhood Centre'. The mandated objective of zone B1 is "To provide a range of small-scale retail, business and community uses that serve the needs of people who live or work in the surrounding neighbourhood." Under the Standard Template, neighbourhood shops are to be permitted with consent in the B1 zone, however retail premises (which includes supermarkets) are not mandated as a permissible use in this zone. Therefore the zone provides an opportunity to identify those centres designated in the hierarchy as neighbourhood centres and rural centres and distinguish such smaller scale centres from other local centres.
4. However, contrary to this discussion, the finalised version of the LEP, as made, does not embody this differentiation. The LEP, as made, does permit the incorporation of a supermarket (such a commercial purpose falling within the nominated use of "shop" within the LEP) within the B1 Neighbourhood Centre zone - such incorporation being, as Mr Galasso pointed out, at fundamental variance with that which had been set out in the Policy.
5. As to the present functional utility (or otherwise) of the Policy, Brown C observed, in Starby Pty Limited v The Hills Shire Council [2016] NSWLEC 1140, at paragraphs [91] and [94], as follows: 91 I am also satisfied that the Councils Centre's Direction is not a document that should be given any significant weight in determining the application. While the Court may have regard to a range of documents in the public interest (Terrace Tower Holdings Pty Ltd v Sutherland Shire Council (2003) NSWCA 289), Centre's Direction cannot be a document that displaces LEP 2012 and DCP 2012. … 94. While Centre's Direction provides a range of findings and recommendations; the role in the context of this application is to inform the preparation councils planning controls. The Centre's Direction predates LEP 2012 and (at p28) states that it "provides guidance for the preparation of LEP 2010" which I understand was the precursor to LEP 2012. Presumably, the Centre's Direction informed LEP 2012 to the extent that was possible.
6. When exercising the jurisdiction of the Court in Class I merit appeals, there is no hierarchical distinction between Judges and Commissioners. Expressions of opinion, by Commissioners, are, when relevant and appropriate, to be accorded the same weight as expressions and opinions on a topic by a Judge of the Court. In broad terms, comity suggests that I should have regard to the views expressed by Brown C unless I were to consider that there was good reason to disagree with them.
7. In this instance, it seems clear to me that the views expressed by the Commissioner are entirely accurate and reflect the view that I should take of the Policy in these proceedings.
8. The position advanced by the Council in reliance on the Policy finds, in its present context, foundation in one of the zone objectives for the B6 zone, an objective in the following terms: To maintain the economic strength of centres by limiting retailing activity
9. Although the Policy, itself, should not be given any weight in these proceedings for the reasons earlier set out, nonetheless it is appropriate for me to consider whether the extent of the commercial/retail floor area proposed to be incorporated in this development is contrary to that zone objective and, if I were to conclude that this was the case, what role such conclusion might play in my assessment of this proposed development in light of cl 2.3(2) of the LEP.
10. The position advanced by Mr Swan on behalf the Council was that the extent of the commercial/retail floor space proposed for this development was such that it would act as some form of centre (albeit not one categorised in the LEP) and that that would act as attractor to the detriment of neighbourhood centres already anticipated to be incorporated in the development of the Box Hill and Box Hill Industrial Precinct to be developed to the west and north-west across Annangrove Road from the site. An anticipatory precinct plan for this precinct was in evidence. It discloses an expected neighbourhood centre at some 842 metres along Annangrove Road to the north from this site.
11. Amongst material that had been submitted to the Council in objection to ABAX's development proposal, there was a submission from a town planning consultancy on behalf of a putative developer of this neighbourhood centre. It is long-settled that the potential impact of economic competition is not a relevant matter for planning consideration (see Kentucky Fried Chicken Pty Ltd v Gantidis [1979] HCA 20; 140 CLR 675). However, to the extent that matters such as the planning for the location of, and timing for development of, neighbourhood centres is comprehended within Council planning documents, the matters so arising do require to be considered. The town planner for the putative developer said, relevantly: Given the above it is considered a strong possibility that the establishment of 21 specialist retail shops on a site less than 850m from a proposed village centre could undermine or significantly delay the construction timeframe of the village centre. It may also delay the timing for the provision of a full service supermarket, which is not able to be provided under the current planning controls within the development site at 332 Annangrove Road. This would have wider planning implications for the Box Hill Precinct and require residents to travel further to access an appropriately sized supermarket. … This development is likely to preclude or at best delay the construction of a neighbourhood shopping centre that is located beside an existing community hub that is likely to be expanded and has the opportunity to become a focal hub within the release area that promotes community interaction. This site in proximity to a sewage treatment plant and a proposed ground floor layout that limits the potential for interaction between patrons does not provide for the appropriate development of a retail centre in a node or community hub as it is likely to preclude the orderly and economic development of a planned local retail centre.
12. Evidence on this issue was given by Mr Leyshon, a retail development and town planning consultant for ABAX, and Mr Swan for the Council. The position advanced through Mr Leyshon's evidence and Mr Galasso's submissions on this topic was, in summary:

• The uses permitted in the B6 zone for a development such as is here proposed do not permit development for a supermarket;
• The nature of the smaller neighbourhood shop tenancies (required not to exceed 100 square metres in size) would permit specific specialist retailing or a small convenience store only;
• To the extent that there were envisaged to be larger tenancies, they would need to fall within the range of activities permitted within the B6 zone and that that range of activities could not act as an attractor for regular, repeat business of the "weekly shop" nature that would be attracted by a supermarket; any attractor in a centre such as is here proposed, for example, an RMS registry, would not be an attractor in the same sense as a supermarket, as the attraction would act for a specific and occasional purpose only; the ability to have a supermarket in a neighbourhood centre, as now provided for in the LEP but contrary to that which had been envisaged in the policy, meant that this proposed development could not be regarded as in competition with a neighbourhood centre that incorporated a supermarket; and
• It was reasonable to expect that, given that supermarkets were permitted in neighbourhood centres by the LEP, a supermarket of some size would be incorporated in such a centre.

1. With respect to this final proposition, I am assisted in accepting it by the submission from the putative neighbourhood centre developer earlier quoted.
2. Although Mr Swan's evidence sought to support the position that the combination of the policy and the zone objective meant that the proposed ABAX development was inconsistent with the zone objective, I am unable to conclude that this is the case. I have reached this conclusion not only because neighbourhood shops are a permitted use in the zone but also because another of the zone objectives, that reading:

• to provide a range of employment uses (including business, office, retail and light industrial uses) also, self-evidently, seeks to promote economic activity within the zone in a fashion that incorporates retailing economic activity. The incorporation in the LEP of the ability to site a supermarket in a neighbourhood centre means that the lowest identified level of centre in the LEP's economic hierarchy can incorporate a supermarket contrary to the Council's policy that had been developed in order to inform preparation of the environmental planning instrument that has become the LEP. This has, effectively, created a position where, using the permitted uses in the B6 zone, it is now possible (as is here proposed) to create an even lower level economic centre, but one without a supermarket and which, consequently, would not be expected to operate in the same fashion as a centre which did incorporate such a facility.

1. In saying this, I am not to be taken to be criticising the Council for adopting an LEP that did not reflect the entirety of the Policy. I am merely observing that the consequence of the departure from the Policy by the final form of the LEP has created the opportunity for development such as is here proposed and to do so in a fashion adopting uses permitted in the zone and in a fashion broadly consistent with the objectives of the B6 zone.
2. This aspect of the Council's opposition to ABAX'S proposed development cannot be supported.

Design issues

1. Town planning evidence was given by Mr Haskew, a consultant town planner, on behalf of ABAX and by Mr Swan on behalf of the Council. They had conference and had prepared a lengthy Joint Expert Town Planning Report.
2. As a consequence of my examination of the model during the course of the site inspection, I concluded, during the course of my return to the Court, that I should indicate to the parties that it might be appropriate to explore the desirability of an alternative design outcome, one which, in simplistic terms, might be regarded as flipping the design so that the setback residential elements more proximately addressed the Withers Road frontage. Although Mr Swan had expressed a broad opinion consistent with this in the joint report, I was concerned that exploration of such an approach might not be appropriate as such a change could not be accommodated as an amber light outcome from the present proceedings.
3. This position arose, necessarily, in my view, because the changes necessary for such a development approach to the site were so substantial that a fresh development application would be required.
4. However, given the nature of the odour material that I had read in preparation for the hearing (the odour issue is discussed later in this decision), I concluded that it would be appropriate to raise the matter with the parties and permit its exploration. It is in this context that the town planning evidence was considered.

Town planning design issues

1. The broader position taken by the Council is that the design of the proposed development has two significant defects. The two defects are both aspects of the same design feature of the ABAX proposal. First, the Council says that the extent of the "at grade" car parking in the open portion of the broad view of the proposed development creates an inappropriate presentation of the development to Withers Road. Second, the location of the residential elements, particularly buildings B and C, being on top of the podium of the proposed commercial/retail space, represents an inappropriate design response to street frontage-addressing elements considered desirable by the Apartment Design Guidelines and by the DCP.
2. Before turning to consider these concerns, it is to be noted that the Council raises no concern, in this context, about:

• The number of car parking spaces proposed for the "at grade" parking area to serve the commercial/retail space proposed in the development;
• The provision of this parking at grade is acceptable; and
• The separation of parking provision with the residential parking being in a basement area and the loading dock and staff parking for the commercial/retail space being separated from the customer parking space (with access to these separated parking and loading facilities from the access to the customer parking area) is appropriate.

1. Mr Haskew and Mr Swan, in addition to having provided a Joint Town Planning Report, also gave evidence in Court on the matters in contention between the parties on town planning issues. I have earlier noted what is appropriate to be drawn from this evidence concerning how the EPA's Odour Intensity Guidelines might be applied on a population density basis. It is unnecessary to revisit that aspect of the town planning evidence in the context of the design matters noted above.
2. Mr Galasso questioned Mr Swan on the appropriateness of the location of the "at grade" car parking and the appropriateness of its position to service the commercial/retail space proposed. Mr Swan agreed that, if the proposed development were to have been simply a form of local centre with no shop top housing component using the commercial/retail space as a podium, the open U-shape and its presentation to Withers Road would have been appropriate. However, he maintained his opinion that, in the context of the extent of the residential development proposed, the desirability of having a more activated street frontage and, in broad effect, flipping the orientation of the proposed development so that it more closely addressed the Withers Road frontage was the appropriate and desirable design response for such a development on the site.
3. The second of the contentions raised by the Council as a basis for refusal of the proposed development was that the proposed development should be refused because it is not suitable for the site on which it is proposed to be located. In support of this contention, the Council pressed a number of particulars of which (j) was in the following terms: The proposal does not satisfy Design Quality Principle 1: Context and Neighbourhood Character, 2: Built Form and Scale and 3: Density in SEPP 65.
4. The Joint Town Planning Report recorded the discussion of Mr Swan and Mr Haskew on these matters at some length. For the purposes of this consideration, I am satisfied that the first and second of the principles warrant specific consideration. In this context, the element of the joint report is reproduced in the next section
5. I have set out this extract from the joint report, in full, because it summarises the nature of the oral evidence that was given, primarily by Mr Haskew, during the course of the hearing. I am satisfied that, in the context of this site (separate from the odour constraints earlier discussed), the opinion put by Mr Swan is to be preferred for the reasons discussed below.

Streetscape issues

1. Design outcomes for the Edwards Road Precinct (the precinct within which the site is located) are set out in Part B, Section 7, Appendix C of the DCP. The objectives for Appendix C are in the following terms:

• Improve the visual connection between development and the public realm by encouraging a visually attractive streetscape.
• To promote safe and efficient vehicular movement within the Edwards Road Precinct.
• Facilitate safe and convenient pedestrian movement.

1. The appendix also contains objectives for development sites, the third of which is: To ensure development on a particular site has due regard to adjoining developments.
2. As this site is at the southern end of the Edwards Road Precinct, in the context of the present proceedings, this objective needs to be considered having regard to the IN2 zoning on the southern side of Withers Road. This is discussed later. There is no development proposed adjoining the site to the north and, to the east, there is an SP2 drainage/riparian zone corridor. To the north-east is the Treatment Plant discussed earlier in the odour contour considerations. To the east are playing fields, a form of development not requiring any detailed consideration in the context of this development site objective.
3. The relevant setback objective is contained in cl 2.2(i), being to create a visually attractive and consistent streetscape. In the context of this objective, the development controls deal with front setbacks from the primary street frontage.
4. The relevant front setbacks, depending on how one views the primary street frontage, from Annangrove Road and Withers Road are both 10 metres. In this context, given the length of the Withers Road frontage; the proposed orientation of the development being considered; and the access points for parking for both the commercial/retail space and the residential space, it is appropriate to regard Withers Road as being the primary street frontage. As a consequence, the control for the front setback for a proposed development on this site arising out of this portion of the DCP is 10 metres. It is to be noted that it is not expressed as being a minimum of 10 metres, merely that the front setback should be 10 metres.
5. In the Joint Town Planning Report, Mr Haskew said: 91 It seems to be that the primary issue in dispute between the parties is the suitability of the proposed site planning. The proposal provides an open car parking area for the majority of the site's frontage to Withers Road, albeit that the car park includes landscaping and is also setback behind a 10m landscape setback. The weight of proposed built form is then located behind and around that car parking area. 92 I note Mr Swan's preferred site planning solution which would be to reverse the design and align proposed buildings to the street, thereby creating a defined street edge and minimising the visibility of off-street parking. Both of these are generally speaking, desirable and sensible design objectives. 93 However, the functionality of that alternative design arrangement is dependent on the site context supporting it. Specifically, Mr Swan's preferred site planning arrangement is in my opinion, appropriate for a locality carrying a significant amount of retail floor space and hence high pedestrian traffic. Typically, this would be the sort of design outcome one would expect in a B2 - Local Centre, B3 - Commercial Core or B4 Mixed Use zone. The common feature of all of those zones is that they permit retail development. In turn, the presence of a large volume of retail floor space creates a strong pedestrian presence in a locality. It is entirely appropriate in those situations that the design actively embrace and support that pedestrian presence. 94 However, in the case of the B6 - Enterprise Corridor zone, the amount of retail floor space is limited and there is an absence of an anchor tenant such as a supermarket or discount department store. What this means in design terms, is that non-residential floor space which is provided in the B6 - Enterprise Corridor zone, must cater to motor vehicle movements and must respond to the business needs of non-retail businesses. These needs make at grade and convenient parking an essential design feature. Unlike retail areas, where customers return to the same place on frequent basis for supermarket shopping, customers of these non-retail businesses in the B6 - Enterprise Corridor zone, should not be expected to attain the same high levels of site familiarity from their customers. This in turn makes it extremely important for the success of ground floor business, that car parking is clearly visible from the public road and that it is conveniently located relative to the business entrances. The parking arrangement for the proposed development is very similar for example, to what we typically see in bulky goods areas, that is, central, at grade and clearly visible parking areas. 95 Given the B6 - Enterprise Corridor zoning, it should be expected that adjoining sites will develop in a similar fashion. 96 From this starting point it is then worthwhile noting that exactly the same site planning outcome as that which is proposed, would be an entirely expected and appropriate design if the residential levels were instead proposed as say service offices. I make this point because one of the points of difference between Mr Swan and myself, is that Mr Swan opines that it is the operation of SEPP 65 which results in different site planning outcomes being appropriate. His opinion that the proposed site planning should be reversed is primarily based on SEPP 65 considerations. 97 In my opinion, the inclusion of residential floor space into the development mix for the site should not invalidate or override fundamental site planning principles which apply to the ground floor non-residential floor space. If the design is to ignore the fundamental business needs of the ground floor non-residential uses, the consequential, and in my opinion untenable risk, is that those ground floor businesses will not thrive. 98 I agree and acknowledge that Mr Swan's preferred site planning solution would be preferable from an urban design standpoint if the subject site were located in a zone where significant retail floor space and hence pedestrian activity was to be expected (eg a B2, B3 or B4 zone). However in the circumstances of a site which is zoned B6 - Enterprise Corridor, it is imperative that the motor orientated needs of ground floor businesses be accommodated. For this reason I have a very strong preference for the current site planning configuration and would have severe reservations about the alternative arrangement preferred by Mr Swan. 99 I clarify that I do not say that the proposed site planning is an inferior design outcome which is justified by, or acceptable because of the B6 - Enterprise Corridor zone. Rather, I say that the design must respond to the commercial needs of the B6 zone and that response results in a difference design to what would be appropriate in a B2, B3 or B4 zone where there is a much higher retail and hence pedestrian presence. In my opinion what is proposed is an exceptionally good design which accommodates for the needs of each of the component uses.
6. Mr Swan's brief response was: I am of the opinion that the site should be better planned having regard to the mixed use nature of the development, and I rely on the Apartment Design Guide to guide good development outcomes. See the section on SEPP 65 for further discussion.
7. There is, at least by inference, an element in Mr Haskew's analysis of criticising the setback objective and its associated control in a general sense rather than in a specific sense relating to this site. To the extent that such criticism is to be read in this element of Mr Haskew's written evidence, it is to be rejected (see Botany Bay City Council v Premier Customs Services Pty Ltd [2009] NSWCA 226; 172 LGERA 338). However, to the extent that there are specific objections to this proposed development raised by Mr Swan, and responded to by Mr Haskew, they appropriately arise in the context of the application of SEPP 65 and the Apartment Design Guidelines to this specific development proposal.
8. I have noted above why some elements of Mr Haskew's evidence might be regarded as being a general criticism of some DCP elements and, therefore, to be disregarded. However, to the extent that those earlier comments and the material set out above relate to the ABAX site, I am satisfied that they do not provide a basis for setting aside the setback requirement of 10 metres along the Withers Road frontage. First, it is to be observed that Zhang v Canterbury City Council [2001] NSWCA 167; 51 NSWLR 589 requires that consideration of this control should be the starting or focal point of my consideration. Although the DCP is not binding, there needs to be some cogent reason why that control should be departed from.
9. Although, in this context, it is reasonable to expect that there will not be significant pedestrian traffic to the site and, if the present design were to be approved, such public transport-arriving pedestrian traffic could be expected to enter the proposed residential development from Annangrove Road, that does not provide a basis for setting aside the broad philosophic approach to be derived from SEPP 65 and the Apartment Design Guidelines. Although it may be that the Council's planning proposal, to the extent that, at least in its residual form, might be implemented, it is certainly not imminent and certain for the reasons earlier discussed.
10. As a consequence, to the extent that Mr Haskew proposes a radically different setback from the Withers Road frontage for this proposed development, nonetheless any further mixed use development in the Edwards Road Precinct, to the extent that it might, in design philosophy, rely on the proposed development for this site, would nonetheless be expected to comply with the setbacks set out in the specific precinct controls in the DCP.

Zone interface

1. On the other side of Withers Road from the ABAX site, the land is zoned IN2 Light Industrial. It was Mr Haskew's evidence that the corner site in that zone, opposite the ABAX site, had been granted development consent for the establishment of a bus depot. He expressed concern that, as a result of the zone interface, potential issues of noise arose if there were to be residential development on the ABAX site proximate to the Withers Road boundary in the fashion suggested by Mr Swan as being desirable. Whilst the Court has established the planning principle in Seaside Property Developments Pty Ltd v Wyong Shire Council [2004] NSWLEC 117; 136 LGERA 111, a planning principle that states: As a matter of principle, at a zone interface as exists here, any development proposal in one zone needs to recognise and take into account the form of existing development and/or development likely to occur in an adjoining different zone. This planning principle was confirmed as remaining relevant in Doolan v Strathfield Municipal Council [2014] NSWLEC 1212.
2. In these proceedings, I have no evidence of the detailed conditions attaching to the approved bus depot development and, specifically, no information as to its permitted hours of operation or any acoustic conditions that may have been applied to the development consent. In Class 1 proceedings such as these, an applicant bears what has been described as a persuasive burden. Although not to be taken to be a formal burden of proof, nonetheless, for me to draw any inference that Mr Haskew proposes (that residential development at the Withers Road frontage would be inappropriate), any relevant, detailed material in the development consent for the bus depot would have needed to have been provided as part of ABAX's case and it was not.
3. As a consequence, if there were to be residential development close to the zone boundary by adoption of the broad design philosophy proposed by Mr Swan as the Council's preferred position (if I were to conclude that mixed use development was appropriate for the site contrary to the Council's broader position that the site was not suitable for such development), the industrial noise policy's application would require consideration of whether acoustic design treatments would be necessary for the apartments that addressed Withers Road.
4. This zone interface circumstance, although providing some support for the present proposed design does not outweigh the broader considerations I have earlier discussed of the desirability for having the shop top housing in any development on this site address in Withers Road.
5. As a consequence, there is established no good reason to depart from the setback control and the reasons that have been advanced by Mr Swan for the provision of an active street frontage to Withers Road and a positive built form contribution to the Withers Road streetscape provide sufficient and valid reasons to reject this proposed design.

The SP2 zone setback at the Annangrove Road frontage

1. Two elements of the proposed development would encroach within the 10‑metre setback that the Council's planning controls require be effected from the SP2-zoned land along the Annangrove Road frontage of the site. These two elements comprise minor portions of the basement parking to serve the proposed residential development and, above this basement parking but nonetheless below ground level along this frontage, staff parking designed to serve the commercial/retail space.
2. This area, forming part of the podium for the north-western of the four proposed apartment blocks appears, from the relevant section in the plans before the Court, to be virtually entirely (if not, in fact, completely) below the proposed finished ground level of the development along the Annangrove Road frontage.
3. The extent of the incursion, at each of the underground levels, into the mandated 10-metre setback from the SP2 boundary is minor and a plan showing how it could be satisfied by deletion of a small number of car parking spaces at each level was in evidence.
4. Mr Galasso submitted that, if I were to conclude that compliance was required, this could be dealt with by a minor adjustment to the plans, an adjustment that I could mandate adopting the "amber light approach" now frequently taken by the Court in determining merit appeal such as this.
5. It is clear that the purpose for which such a setback is required is to ensure that there is an appropriate streetscape presentation to that frontage in the event that the road widening does occur, the functional impact in these circumstances of the setback is only engaged at ground level. As ABAX has provided a landscape concept plan showing the proposed landscaping along this frontage, and as the Council has not taken issue with that proposed landscaping, Mr Staunton conceded that the absence of a deep soil planting zone along that frontage (such a planting zone not being a requirement of the Council) and the fact that the above ground built form of the proposed development was compliant with the setback from the zone boundary meant that the non-compliance at the underground levels was a technical breach only.
6. Given this position, and the fact that the setback control is contained in the DCP, the appropriate approach to take, consistent with the guidance given by the Court of Appeal in Zhang is to conclude that, in these circumstances, requiring compliance with the setback requirements would not be appropriate.

Conclusion

1. I have concluded, for the reasons earlier set out, that the present development proposal is unacceptable. I have reached this conclusion primarily on the basis of the design of the proposal when assessed against two significant factors. These are the odour contours from the Treatment Plant and the desirability of having a development which more effectively addresses its Withers Road frontage.
2. However, I have not concluded that a significant mixed use development, appropriately designed, might not be possible on the site. Although there might be some constraints as to the extent to which development in a northerly direction along the eastern edge of the site might extend, it is not appropriate for me to be prescriptive in this regard.
3. I have considered the appropriate extent to which it might be possible to engage with design issues relating to the potentiality for future development but am not prepared, consistent with the approach taken by Bignold J in Manzie v Willoughby Council [1996] NSWLEC 26, to go further than I have done. The question of how the development potential of the site might be capable of being realised is a design issue for ABAX and the Council now to consider.
4. As a result, it is necessary that this particular development application be rejected but that it be done in circumstances when I am not to be regarded as holding that an acceptable mixed use development is necessarily incapable of being accommodated on the site.

Orders

1. As a consequence, the orders of the Court are: 1. The appeal is dismissed; 2. Development Application 959/2015/JP for a mixed use development on the corner of Annangrove Road and Withers Road, Rouse Hill is determined by the refusal of development consent; and 3. The exhibits are returned, other than the applicant's exhibits C, D, G, H, J, K, L, M and Q and the respondent's exhibits 1, 3, 4 and 5.

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: 19 August 2016