Adam Hughes Pty Ltd v Penrith City Council - [2018] NSWLEC 1369 - NSWLEC 2018 case summary — Zoe

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Adam Hughes Pty Ltd v Penrith City Council

[2018] NSWLEC 1369

Land and Environment Court (NSW)|2018-05-24

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Court

Land and Environment Court (NSW)

Decision date

2018-05-24

Source

Original judgment source is linked above.

Judgment (20 paragraphs)

[1]

Judgment

COMMISSIONER: This is an appeal against the refusal by Penrith City Council of Development Application number DA/16/0521. The application seeks consent for the construction of a six storey residential flat building, comprising 43 apartments and two levels of basement parking. The development is proposed at 32-36 Lethbridge Street, Penrith.
Following the termination of the conciliation the applicant made amendments to the proposed development. The Court granted leave to the applicant to rely on amended plans and documentation in April 2018. The applicant argues that the amended plans "incorporate decreased scale, increased setbacks and revised design and landscaping. The number of apartments is reduced from 43 to 41 with reconfiguration of some apartments" (Affidavit dated 10 April 2018).
In response to these amended plans Council maintained the application should be refused on the following grounds: 1. the scale and design of the proposed development does not respond appropriately to the sites context; 2. the proposed development provides unsatisfactory residential amenity for future residents; 3. the density of the proposed development is excessive and is not consistent with the desired future character of the locality; 4. the variation to building height is not well founded and should not be upheld by the Court; 5. the proposed development fails to provide the required building separation to adjoining properties; and 6. the development will result in the isolation of 30 Lethbridge Street and prevent its redevelopment for high density housing.
Following the joint conferencing of the experts a further set of amended plans were produced by the applicant. These further amended plans entail the following main changes: 1. an increase in the depth of the street setback of the building; 2. a redesign of the street elevation to moderate the buildings scale and improve the articulation of the façade; 3. provision of roof top communal open space for the development at level five; 4. redesign of some apartments; and 5. amendments to the landscape design.

The supplementary joint planning report concludes that these amendments satisfy the Council's town planning and urban design concerns (at paragraph [3]). The report states the experts are agreed as follows: Height: Building height remains numerically non-compliant but that non-compliance has been justified in the appropriate manner: i Height exceeds the 18m maximum generally as outlined in the further-amended 15 clause 4.6 variation request. ii The further-amended variation request demonstrates that the further-amended development satisfies provisions under clause 4.6 of PLEP 2010: - Compliance with the 18m development standard is unnecessary or unreasonable in the circumstances of the case; - Details of the further-amended development provide sufficient environmental planning grounds to support the departure from the 18m standard; - Reasons provided by the variation request are valid and acceptable. … Setbacks: Building separation, measured in terms of setbacks from side and rear boundaries, remains numerically non-compliant, but potential impacts have been avoided or managed appropriately. … Solar access: Although there are differences of opinion in relation to solar access which raise the question of non-compliance with ADG metrics, the lesser estimate of solar access may be justified by reference to ADG design guidance: i Although likely shadow-impacts of the proposed atrium roof have not been agreed, the consequences are relatively minor: - At worst, the atrium roof would limit sunlight to two dwellings; - Otherwise, the experts have agreed that two hours of daily sunlight during midwinter would be available for 25 dwellings (or 66% of the proposed total); - If the atrium roof does not block sunlight to clerestory windows, 27 dwellings or 71% of the total would receive appropriate sunlight. ii Scope for non-compliance with the 70% target is provided by Design Guidance notes to element 4A-1 of the ADG: - Situations where greater residential amenity can be achieved by orienting windows away from sunlight; - Where design is affected by site constraints and orientation. iii Circumstances of the Site, together with design of the further-amended development, address the specified Design Guidance criteria: - Site dimensions can comfortably accommodate two rows of apartments per level; - Layout of the proposed apartments maximises the number of north-facing apartments than can be accommodated across the Site's frontage: typically four per storey; - Detailed design of apartments at the south-western corner of the building allow sunlight to penetrate living rooms and balconies (which are south-facing); - Re-orientation of the proposed clerestory roof-lights (per the further-amended architectural plans) would have two significant benefits: the rooftop communal open space would be linked and enlarged (noting that two separate spaces were proposed by the amended architectural plans). iv Consequently, the further-amended proposal is consistent with Objective 4A-1 of the ADG. … Communal Open Space and Landscape: The combined area of 'useable' communal open space is slightly less than specified by the ADG metrics, but merit assessment indicates that the proposed shortfall would not be inconsistent with the relevant ADG objectives … Further-amended landscape diagrams provide a satisfactory foundation for formal amendment of the current plans. … Building Form: Further-amendments to building forms and facades are satisfactory: i Scale of the further-amended form would be contextually-appropriate: reasonable transitions have been achieved in relation to residential neighbours to the east and west. ii Form and facades incorporate a degree of articulation together with light-weight and visually-recessive elements, which provide satisfactory responses to the desired character of traditional residential localities as nominated by the PDCP. iii In conjunction with further-amendments to proposed landscaping, the further-amended street elevation would contribute to satisfactory streetscape quality. … (Exhibit 5)

[4]

Public Submissions

The development application was notified by the Council and a submission was received from the adjoining owner at 30 Lethbridge Street. This resident also addressed the Court at the commencement of the hearing and expressed the following concerns in relation to the development:

the redevelopment of the subject site will restrict the potential for their property (30 Lethbridge Street) to be redeveloped in accordance with its R4 High Density Residential zoning. In particular the resident expressed concern that without the potential to combine their property with another site they would not be able to develop for a residential flat building.
they have engaged an independent valuer to assess the market value of their home. The valuer prepared two reports, one in July 2016 and one more recently in 2018.
they are open to sale of their property but are concerned that the offer they have received is below the amount identified by their valuer as the value of their home.
They have only received one formal offer to purchase from the adjoining development. That offer was by email in September 2016. It is the resident's view that this offer was $100,000 below the market value of their property.
That the applicant's valuation reports do not use relevant, equivalent properties. Mr Li informed the Court that in his view that the R3 Medium Density Residential properties referenced in the Applicant's valuation do not provide a proper basis for a valuation of his R4 High Density Residential property.
that based on the correspondence received from the developer he was not genuinely attempting to acquire their property and had a preference to progress the development over only three properties.
whilst the development proposed shows that 30 Lethbridge Street could be developed as a boarding house, it was the residents view that there is no market for such a use and it is not a viable option.
that the developer, and their valuation, place undue weight on the drainage easement and pipeline that traverses 30 Lethbridge Street. The resident argues that these factors should not affect the value of their land.

Following notification of the amended plans as directed by the Court, refer paragraph [1], a further submission was received from the owner of 30 Lethbridge Street. Attached to that submission is a letter from HDC Planning which, in summary, argues that the development ought to be refused and: 1. that the Court has previously rejected the argument that a site is 'not isolated' because the zoning permits a broader range of development than just residential flat buildings. In making this argument the submission relies on Melissa Grech v Auburn Council [2004] NSWLEC 40 ('Grech v Auburn Council'); 2. that the Applicant has not adequately considered the interface between the proposed development and a potential future development at 30 Lethbridge Street. The submission argues that importantly the separation distances shown between the proposal and a future boarding house at 30 Lethbridge Street are less than that required by the Apartment Design Guide (ADG); 3. that in assessing and determining the application consideration should be given to requiring easements over the subject site to facilitate vehicular access to a future basement carpark at 30 Lethbridge Street; 4. that the building envelope, as indicated for 30 Lethbridge Street in the amended plans, is incapable of accommodating a boarding house. In particular HDC Planning argue that the lack of feasibility for this use arises from the non-compliant separation distances, the configuration of the proposed floor plate and poor solar access to the proposed boarding rooms. 5. that the interpolated floor space ratio (FSR) proposed for the development at 30 Lethbridge Street is materially less than that proposed by the subject site. The submission argues that this demonstrates an unreasonable impact arising from the proposed development. 6. the development schematic proposed for 30 Lethbridge Street relies on building over the easement and the overland flow path.
The HDC Planning report concludes that in the subject development the "applicant has not discharged its responsibilities under Principle 3 of Cornerstone Property Group Pty Ltd v Warringah Council [2004] NSWLEC 189, specifically: The subject application may need to be amended, such as by a further setback than the minimum in the planning controls, or the development potential of both sites reduced to enable reasonable development of the isolated site to occur while maintaining the amenity of both developments" Objection of Zhi Li of 30 Lethbridge Street (14/6/18)

[5]

Planning Controls

In accordance with State Environmental Planning Policy (Building Sustainability Index: BASIX) 2004 a certificate had been submitted with the amended development application, and the relevant requirements incorporated in the proposal.
In accordance with the requirements of State Environmental Planning Policy 65: Design Quality of Residential Apartment Development ('SEPP 65'), a design verification statement was lodged by Mr Peter Morson, registered architect (8100) (Exhibit E).
Relevantly at cl. 28(2) of SEPP 65 the consent authority in determining the application is required to take into consideration: (a) the advice (if any) obtained from the design review panel, and (b) the design quality of the development when evaluated in accordance with the design quality principles, and (c) the Apartment Design Guide.
Provisions of the ADG are relevant to the proceedings and are now agreed by the experts to be addressed by the amended plans (Exhibit 5).
Pursuant to Penrith Local Environmental Plan 2010 (LEP 2010) the site is zoned R4: High Density Residential. Development for the purpose of 'residential accommodation" (and at (h) residential flat buildings) is permissible with consent in the zone.
The objectives of the R4: High Density Residential zone are: • To provide for the housing needs of the community within a high density residential environment; • To provide a variety of housing types within a high density residential environment; • To enable other land uses that provide facilities or services to meet the day to day needs of residents; • To ensure a high level of residential amenity is achieved and maintained; • To encourage the provision of affordable housing • To ensure that development reflects the desired future character and dwelling densities of the area.
Part 4 of LEP 2010 contains principal development standards with cl. 4.3 designating a maximum building height of 18 m. The proposed development exceeds this maximum height.
Clause 4.1A applies to the subject site. This clause designates minimum site areas for specific forms of development in the residential zones. It states: (1) The objective of this clause is to achieve planned residential density in certain zones. (2) Development consent may be granted to development on a lot in a zone shown in Column 2 of the Table to this clause for a purpose shown in Column 1 of the Table opposite that zone, if the area of the lot is equal to or greater than the area specified for that purpose and shown in Column 3 of the Table. Column 1 Column 2 Column 3 ... … … Multi dwelling housing Zone R3 Medium Density Residential; Zone R4 High Density Residential 800 square metres for a standard lot Multi dwelling housing Zone R3 Medium Density Residential; Zone R4 High Density Residential 900 square metres for a battle-axe lot Residential flat building Zone R4 High Density Residential 800 square metres for a standard lot Residential flat building Zone R4 High Density Residential 900 square metres for a battle-axe lot

[11]

Does the development meet the objectives of the height standard?

In relation to the height objectives the written request makes the following comments in relation to the consistency of the proposal with the objectives of the height standard: Given the precedent set by Council in approving several DA's within proximity of the site with maximum heights (RL's) above that proposed by this application, the proposed built form, which is modulated, varied and recessed appropriately from boundaries represents a compatible scale for the site. The area has recently been rezoned to R4 High Density Residential and accordingly the provision of high quality architectural residential flat developments should be encouraged on the site. The development will result in minimal visual impact and does not result in the disruption of views from adjoining premises to any item of significance. The development does not result in loss of solar access to a public park or place such as a school. The proposed heights (which vary across the site in respect of adjoining building interfaces) given the slope of the site have been strategically formulated to reduce associated impacts (views, privacy, solar). This includes stepped down forms, edge landscaping and building orientation to reduce privacy/solar impacts on surrounding properties. It is also important to understand that the finished ground floor levels of the site have been raised above the existing natural ground level to meet the flooding requirements for the site (1 in 100 + 500ml freeboard). … In terms of bulk of scale, there is no FSR control which applies to the site, however the building has been formulated to respond to key footprint controls (as identified in the Apartment Design Guidelines). The proposal generally meets the separation requirements of these controls and accordingly is considered to be appropriate for the site in terms of bulk and scale in an infill environment (given the surrounding land uses. The deletion of units 5.01 and 5.02 at the rear of the development has substantially improved the southern neighbouring development and minimises any adverse overshadowing impacts. … The proposed variation to the height control (15%) will not impact upon the fundamental detail of the building's design which proposes a high-quality development in a key growth area of Penrith. The proposal meets the objectives of Clause 4.3 of the PLEP2010 and has negligible impacts above that permissible within the height control . … The deletion .of units 5.01 and 5.02 has also provided the opportunity to create a substantial passive recreational space on the roof top level for the occupants of the building. … (Exhibit D)
The preceding arguments in support of the variation are not contended by the Council.

[13]

Is it established that compliance is unreasonable or unnecessary and there sufficient environmental planning grounds to justify the variation?

Wehbe v Pittwater Council [2007] NSWLEC 827 ('Wehbe') at [44]-[48] detailed a number of approaches which may establish that compliance with a development standard is unreasonable or unnecessary for the purposes of cl 4.6(3)(a). Namely that: the objectives of the standard are achieved notwithstanding non‐compliance with the standard (Wehbe test 1); the underlying objective or purpose of the standard is not relevant to the development (Wehbe test 2); that the objective would be thwarted if compliance was required (Wehbe test 3); that the development has virtually been abandoned or destroyed by Councils own actions in departing from the standard (Wehbe test 4); or that the zoning of the land is unreasonable or inappropriate.
In this appeal the applicant primarily relies on Wehbe test 1 and seeks to establish that the objectives of the standard are achieved notwithstanding the variation.
The written request argues that strict compliance with the building height control is unreasonable and unnecessary in the circumstances for the following reasons: The proposed residential flat development is compatible with the size and scale of the approved residential flat developments within the immediate precinct, all of which exceed the maximum 18m height requirement. The northern (front) building edge is fully compliant with the maximum 18 metre building height requirement and a number of design measures have been incorporated to minimise the upper-most level by increasing the front setback from Lethbridge Street and adopting a low profile skillion roof form which is compatible with the roof elements of the neighbouring buildings … Departure from the standard has negligible impacts, particularly when viewed contextually with the adjoining sites under construction. The proposal provides a compliant building envelope in accordance with the ADG and therefore floor space has been redistributed to upper levels as opposed to a larger lower floor plate. … (Exhibit D)
As noted at paragraph [5] the experts are agreed that the variation request should be upheld and that, in the circumstances of this application, strict compliance with the building height control is unreasonable and unnecessary.
The written request argues that there are sufficient environmental planning grounds to justify the variation as follows: From a planning perspective, there are sufficient grounds to justify the variation to the height development standard for the following reasons: - The highest RL of the site aligns with the approved roof level of adjoining sites. - The height variation does not result in significant overshadowing impacts to neighbouring properties. - The proposal aligns with the precedent for building heights approved and under construction within the adjoining precinct. - The proposal represents a building footprint which responds to the site context (within a flood plain) without significant impacts. - The desired future character of the locality is not jeopardised by the proposal and is consistent with Council's objective for this precinct being higher density residential development. - The visual bulk and scale of the development as a result of the exceedance to the building height will remain compatible with the immediate neighbouring buildings to the west and other buildings that are currently approved or under construction in this immediate locality. - As a result of the exceedance to the building height provision has been made for a communal rooftop garden which is a direct benefit to future occupants of this development. It provides a very attractive, passive open space are as opposed to a bland roof structure that would have been the result of a building with compliant height requirements. The rooftop open space has been interconnected in order to extend recreation potential and to encourage social interaction. - The area of non-compliance does not give rise to any adverse environmental impacts to the amenity of the neighbouring properties to the south. The area of non-compliance does not contribute to any adverse overshadowing impacts to adjoining developments. (Exhibit D)
The preceding arguments in support of the variation are not contended by the Council.
In his submission Mr Hemmings argues that: Compliance with the control is unreasonable in (the) circumstances because the control has been virtually abandoned by the Council's actions in approving a number of adjoining buildings at heights higher than 18 meters including 18-22 Colless Street, 20-28 Lethbridge Street and 25-31 Hope Street. Each of these buildings has been approved at six storeys and over 18 metres. The height of the neighbouring buildings, both built and approved, demonstrates that the height of the proposed development on the subject site reflects the current context of the area, embraces the desired future context of high density development in six storey buildings. It also demonstrates that the Respondent has not applied the control consistently. (Applicants submissions at paragraph [14])

[15]

Does the development result in the isolation of the adjoining property (30 Lethbridge Street)? Relevant Court principles on site amalgamation and isolation

The Court has developed planning principles in a number of areas to assist in making consistent planning decisions. Importantly, planning principles are not legally binding and they do not prevail over councils' plans and policies (refer http://www.lec.justice.nsw.gov.au/).
The adopted planning principle of the Court when a site is to be isolated through redevelopment is Karavellas v Sutherland Shire Council [2004] NSWLEC 251 ('Karavellas v Sutherland Shire Council') at [17]-[19] as follows: "17 The general questions to be answered when dealing with amalgamation of sites or when a site is to be isolated through redevelopment are:· Firstly, is amalgamation of the sites feasible? · Secondly, can orderly and economic use and development of the separate sites be achieved if amalgamation is not feasible? 18 The principles to be applied in determining the answer to the first question are set out by Brown C in Melissa Grech v Auburn Council [2004] NSWLEC 40. The Commissioner said: Firstly, where a property will be isolated by a proposed development and that property cannot satisfy the minimum lot requirements then negotiations between the owners of the properties should commence at an early stage and prior to the lodgement of the development application. Secondly, and where no satisfactory result is achieved from the negotiations, the development application should include details of the negotiations between the owners of the properties. These details should include offers to the owner of the isolated property. A reasonable offer, for the purposes of determining the development application and addressing the planning implications of an isolated lot, is to be based on at least one recent independent valuation and may include other reasonable expenses likely to be incurred by the owner of the isolated property in the sale of the property. Thirdly, the level of negotiation and any offers made for the isolated site are matters that can be given weight in the consideration of the development application. The amount of weight will depend on the level of negotiation, whether any offers are deemed reasonable or unreasonable, any relevant planning requirements and the provisions of s 79C of the Environmental Planning and Assessment Act 1979. 19 In the decision Cornerstone Property Group Pty Ltd v Warringah Council [2004] NSWLEC 189, I extended the principles of Brown C to deal with the second question and stated that: The key principle is whether both sites can achieve a development that is consistent with the planning controls. If variations to the planning controls would be required, such as noncompliance with a minimum allotment size, will both sites be able to achieve a development of appropriate urban form and with acceptable level of amenity. To assist in this assessment, an envelope for the isolated site may be prepared which indicates height, setbacks, resultant site coverage (both building and basement). This should be schematic but of sufficient detail to understand the relationship between the subject application and the isolated site and the likely impacts the developments will have on each other, particularly solar access and privacy impacts for residential development and the traffic impacts of separate driveways if the development is on a main road. The subject application may need to be amended, such as by a further setback than the minimum in the planning controls, or the development potential of both sites reduced to enable reasonable development of the isolated site to occur while maintaining the amenity of both developments."
In this case Council's DCP has no specific controls and objectives regarding site isolation, however the planning controls are a relevant consideration to the extent they influence the development potential of 30 Lethbridge Street. Is the adjoining site 'isolated'?
The experts have provided the following agreed evidence: '(i) The neighbouring property at 30 Lethbridge Street would be technically isolated by the proposed development: - However, according to the provisions of SEPP (Affordable Rental Housing) 2009, development of a boarding house would be permissible upon that property: plans of the amended development proposal illustrate a hypothetical boarding house layout that comprises 3m side boundary setbacks, and five levels of accommodation above at-grade parking; - Alternatively, any development proposal for a residential flat building would depend upon a variation to site area and frontage, side setbacks and building separations. (ii) Zoning of the site permits the proposed land use: - Within zone R4, residential flat buildings are a desired built form outcome that would contribute to the diversity of housing forms in Penrith City; - A residential flat building upon the site would provide additional housing in proximity to the Penrith CBD and the Kingswood Health and Education Precinct. (Exhibit 4)
The Council agues 30 Lethbridge Street is isolated by the development on the following grounds: 1. following the implementation of the proposed development 30 Lethbridge Street will be unable to be redeveloped for high density residential housing as the site will be below the minimum allotment size of 800 metres squared provided at cl. 4.1A of LEP 2010 (refer paragraph [26]); 2. as a single site 30 Lethbridge Street will be less than the minimum site frontage control of 20m provided by cl. 2.5.3 of DCP 2014.
In addition the Council argues that the 'the plans rely on the realignment of a drainage easement benefitting other properties that would necessitate agreement from benefitted properties. This demonstrates that the isolated site is unlikely to be developed for a residential flat building and would rely on dispensation to key planning controls in order to facilitate redevelopment.' (Exhibit 2)
Further Council argues that given the likely retention of the adjoining property as a lower density form of residential development into the future the proposed development should provide additional setbacks to the isolated site in order to enable appropriate levels of amenity to be retained for 30 Lethbridge Street. Is amalgamation of the sites feasible?
Mr Seymour submits that the planning experts report identifies that 'any higher and better use of 30 Lethbridge Street would be confined to a boarding house or residential flat building that would depend on a variation to controls concerning site area, frontage, side setbacks, and building separation'. (Respondent's written submissions at [2]).
In his submissions Mr Seymour emphasises that 'on one view of the Court's planning principles, it is a precondition for assessment of development that will isolate a neighbouring site that before the proponent of that development lodges an application it should have sought by formal process to acquire that land' (Respondent's written submissions at [16]).
Mr Seymour argues that the purpose of the Court understanding that there has been a proper process of negotiation is to ensure consistency with the object of the Act that land be developed in an orderly manner (s 1.3(c) of the Act).
Mr Seymour argues that the applicant has failed to meet the Court's planning principal in Karavellas v Sutherland Shire Council in the following ways: 1. On the evidence before the Court there was no direct approach to the owner of 30 Lethbridge Street with a clear offer to purchase prior to the lodgement of the development application with Council; 2. On the evidence of the affidavits filed by the applicant, there 'was only communication about and offer, there was no offer' (Respondent's written submissions at [9]). 3. There was no clarity in the offer of any terms other than price. 4. The process lacked formality and specificity to ensure the owner of 30 Lethbridge Street was 'properly engaged in "negotiation" between him as an owner and the proponent as a developer who may be about to engage the planning process in a way that would cause an accepted impact to be acted on his property' (Respondent's written submissions at [12])
Mr Seymour submits that the Court can accept, on the evidence, that after the application had been lodged there were opportunities for "negotiation" undertaken between the "owners".
Finally Mr Seymour concludes: … it is unclear on the state of the Court's analysis of its planning policies whether the requirement for there to be "negotiations" between "owners" before an application is lodged is fundamental or just one of a number of factors to balance in the overall "consideration" of "matters of relevance" in undertaking the task under s4.16 (though it is accepted that the latter is suggested by [20]-[23] in Karavellas which identified that early engagement in negotiation was beneficial to the finding of reasonableness; not that it was essential. (Respondent's written submissions at [16])
Mr Hemmings for the Applicant summaries the negotiations undertaken with the owner of 30 Lethbridge Street as follows: (Applicant's submissions at [20])
Mr Hemmings argues that the evidence of the three offers to purchase 30 Lethbridge Street is established as follows: (i) Darren Latty is the real estate (agent) representing Adam Hughes Pty Ltd in the negotiations. In his affidavit sworn 13 June 2018, Mr Latty states that on instructions of Adam Hughes and through the managing agent of 30 Lethbridge Street, he made offers to purchase the site for $650,000 and then $682,000. (ii) David Reeves was the managing agent for 30 Lethbridge Street at the relevant time. In his affidavit sworn 13 June 2018 he states that he received the two offers made in May 2016 were passed on by him to Mr Li, the owner of 30 Lethbridge Street, and that both were rejected. (iii) Adam Hughes is the development of the proposed development at 32-36 Lethbridge Street. In his affidavit sworn 13 June he provides evidence of a written offer to purchase the property for $800,000 on 16 September 2016. (Applicant's submissions at [21])
Mr Hemmings submits that the preceding, supported by the affidavits filed with the Court, demonstrates that negotiations were undertaken but that they were unsuccessful.
Further Mr Hemmings argues that given the offers to purchase were refused; amalgamation of the sites was not feasible. He notes that the applicant's offers were informed by an independent valuation and where made at an amount higher than the valuation provided.
Mr Hemmings argues that in these proceedings the desire for amalgamation needs to be balanced against the desire of the Applicant to develop their land in accordance with the zoning. He relies on the reasoning of Tuor C in Karavellas v Sutherland Shire Council at [23] as follows: 'Amalgamation of the sites to achieve a desirable outcome must be balanced against one property owner frustrating the overall development and the property interest of other owners'.
In response Mr Seymour arguments at [63] Mr Hemmings argues: 1. The planning principal details a "best case scenario" for negotiations. He draws support from Grech v Auburn Council at [50] which states: "For the purposes of these proceedings (it) is not necessary to delve too deeply into negotiations between the representatives of Mr Lam and Mr Yusofzai, particularly in terms of what constituted a reasonable offer" 1. The third principle in Grech v Auburn Council [at 51] identifies that "the level of negotiation and any offers made for the isolated site are matters that can be given weight in the consideration of the development application" . Therefore if weight is to given to this matter (the feasibility of amalgamation of sites), amongst the matters for consideration under s4.16 of the Act, then the principal itself envisages some negotiations will be more perfectly executed than others. 2. That Mr Seymour utilises a too literal interpretation on the reference in Grech v Auburn Council to "negotiation between the owners" and that, in Mr Hemmings submission, there are a number of circumstances where such negotiations may take place through an agent.
Finally Mr Hemmings submits that the Court can be satisfied that the process, as identified in the Courts Planning Principles, has been followed on basis of the details in paragraph [66] and [67] summarised as: 1. before the application was lodged, two offers were made to purchase 30 Lethbridge Street for $650,000 and $682,000 on the basis of an independent valuation of $620,000; 2. a third offer was made for $800,000, over thirty percent above the independent valuation during the assessment process of the development application.
Mr Hemmings argues that at the time of the third offer there "can be absolutely no question that Mr Li was aware of the identity of the prospective purchaser and the consequences of not accepting the offer" (Applicant's submissions in Reply at [10]).

[17]

The conclusion of the experts on the merits of the application:

The building separation concerns raised by the objector at paragraph [17] are discussed in the supplementary joint report of the experts. Their agreed evidence is as follows: 28. Building separation, measured in terms of setbacks from side and rear boundaries, remains numerically non-compliant, but potential impacts have been avoided or managed appropriately: i. Elements of the further-amended building have setbacks which are less than specified by design criteria in element 3F-1 of the ADG: - Required side and rear boundary setbacks for windows of habitable rooms and balustrades are 6m for the lower four storeys, and 9m for storeys above; -The further amended south facing balconies on level four have setbacks of 5.25m to the balustrades; - Facing east and west boundaries, 'splayed' bay windows have minimum setbacks of 4.39m; - East facing windows on level four have a boundary setback of 8m; - West facing windows on level four have a boundary setback of 6m. (Exhibit 5)
The experts conclude that the further amended plans now before the Court are acceptable despite the variation to the planning controls on the following grounds: … ii The following merit considerations indicate that the further amended development is acceptable: - Proposed 'encroachments' do not prevent effective canopy and screen plantings along side and rear setbacks; - Proposed 'encroachments' do not affect desired character of the surrounding locality, which, according to Park 2.5 of PDCP, requires deep soil and canopy landscaping along rear boundaries in particular; - Proposed 'encroachments' do not, per se, contribute to excessive overshadowing of neighbouring properties; - Visual privacy would be managed effectively by screens which have been added to the further amended plans: to the south facing balconies and to windows along the flanks of splayed bays that are located along the side elevations. iii Having regard to the preceding points, the further amended development is consistent with Objective 3F-1 of the ADG: - Reasonable external and internal privacy would be achieved by proposed screening and orientation of windows and balconies; and - Adequate building separation distances would be shared between neighbouring site. … (Exhibit 5)
The Council in its written submissions accepts that as a result of the amendments made to the application 'the experts had considered that, subject to a proper process of negotiation having been followed, the amendments to the design recorded in Exhibit 5 made the balancing of the potential impact against the now lesser non-compliance with controls open to be found to be reasonable' (Respondent's written submissions at [4]).

[18]

Findings

I have reviewed the evidence provided by experts to support the resolution of the contentions now agreed between the parties (refer paragraph [5]). I am satisfied that the experts have appropriately considered the issues raised by the contentions, the public, and the appropriate planning controls, and I accept their conclusion that on merit the application warrants approval.
I note that in reaching their conclusion on the assessment of the application, under s 4.16 if the Act, the experts have "balanced" the impacts of the development on the potentially isolated property at 30 Lethbridge Street, refer paragraph [81].
Following a review of the relevant Planning Principles and the submissions of the parties I find that it is not a fundamental matter in the determination of the application that negotiations with adjoining owners, with intent to amalgamate sites, occur prior to the lodgement of a development application. I have reached this conclusion on the following basis: 1. There is no specific provision in an environmental planning instrument, or proposed instrument, that mandates such a requirement or that provides development standards or controls applicable to site isolation or the amalgamation of sites; 2. Similarly the Penrith Development Control Plan contains no such controls; 3. I accept the submission of Mr Hemmings that the third principle in Grech v Auburn Council [at 51] identifies that the level of negotiation and any offers made for the isolated site are matters that can be given weight in the overall consideration of the development application under s4.16 of the Act. I am satisfied that such consideration is relevantly under: s 4.16(1)(b) the likely impacts of the development; and s4.16 (1)(e) the public interest.
I am satisfied on the evidence that the applicant has demonstrated that in this instance amalgamation of the sites is not feasible. I accept the submission of Mr Hemmings that at least at the time of the third offer Mr Li was aware of the implications of the offer and was provided an opportunity to weigh the offer and the impacts of the development as he perceives them.
On the evidence before the Court, I have formed the view that the owner(s) of 30 Lethbridge Street were aware of who the offers were from. I am satisfied if Mr Li or the owner(s) been interested in selling or concerned that their site would be isolated, the opportunity was provided for a counter offer to be made or negotiations entered into.
I agree with Mr Seymour that early negotiation is best practice, and most likely to be productive, but I am not satisfied that the timing of such negotiations, or in this case their reasonableness, is sufficient to warrant refusal of an otherwise meritorious application.
I accept the evidence of the experts (refer paragraph [80] and [81]) and the submission of Mr Hemmings that the orderly and economic development of 30 Lethbridge Street can occur in accordance with the objectives of the zone and its permissible uses, notwithstanding that the site on its own may not be able to accommodate a fully compliant residential flat building.
Whilst the objection filed by Mr Li (prepared by HDC Planning) raises concern about the delivery of a boarding house on 30 Lethbridge Street, these concerns are not supported by the evidence of the planning experts. I am satisfied that this site is capable of redevelopment for a permissible use in the R4 zone.
I am satisfied that the planning implications of an isolated lot have been adequately considered and I note the experts find that 'adequate building separation distances would be shared between neighbouring sites' (Exhibit 5).
Given the preceding I am satisfied that, following evaluation under s4.16 of the Act, the application warrants approval. I accept the agreement of the parties that the annexed conditions are appropriate and grant consent to the application, subject to the agreed conditions.