Aldi Foods Pty Limited v Holroyd City Council

The proposal 8 The applicant proposes to demolish the existing awning and erect a single-storey masonry and corrugated iron building of 1,500m2 for a supermarket, with associated parking for 79 cars. The carpark and building are proposed to be on a suspended concrete slab that will cover the entire site. The carpark will be at RL18.1, while the building will be at RL 18.4. There are to be three illuminated advertising signs. The application includes the removal of the existing trees and the planting of new trees on the concrete deck.

Relevant planning instruments and policies 9 The Holroyd Local Environmental Plan 1991 ("LEP 1991") zones the site 3(a) Business General Zone, a zone in which shops and commercial premises (but not residential flat buildings) are permissible. As previously noted in the introduction, the draft LEP was exhibited in November and December 2003. It relates only to the Merrylands Neil Street Precinct, which is part of the Merrylands Town Centre and includes the subject site. The draft LEP proposes to rezone the site 2(d) Residential "D" zone, a zone in which residential flat buildings; commercial premises and shops are all permissible. In cl 37(1) the draft Amendment states as follows:- The consent authority must not consent to the carrying out of any development within the Neil Street Precinct (the Precinct) unless it is satisfied that the proposed development is consistent with all of the following objectives for the redevelopment of the precinct that are of relevance to the development:

a) Provision for drainage or stormwater and overland flow paths to manage and improve existing flooding constraints within the Precinct,

b) Provision of residential development that is adjacent to the train station and supports revitalisation of the Merrylands Town Centre,

(i) Improved circulation throughout the precinct and Merrylands,

(ii) Direct and efficient vehicular access and pedestrian connectivity, which provides a high level of amenity and links Holroyd Gardens, Merrylands Town Centre and the railway station,

(iii) An integrated cycleway network from the railway station to Parramatta, Auburn and Liverpool, and

(iv) An overland flow path to provide an opportunity to reduce flood levels in the Precinct,

d) The extension of regional cycleway and pedestrian networks connecting Parramatta and Merrylands town centres

e) The provision of a variety of dwelling sizes within apartment buildings to encourage community diversity,

(ii) The need for high quality urban design outcomes for all developments, to be generally in accordance with the principles in State Environmental Planning Policy No 65 - Design of Residential Flat Buildings, regardless of whether or not the building contains a residential component, and

(i) Detract from the future economic development of land within the Precinct or of adjoining land, and

(ii) Hinder the attainment of a mixed residential and commercial Precinct,

h) The redevelopment of the Precinct in a way that promotes the principles of ecologically sustainable development.

10 The draft DCP was exhibited at the same time as the draft LEP. Among other things, the draft DCP establishes objectives, development controls and detailed design guidelines for the Neil Street Precinct. It removes any FSR constraints from the Precinct. It proposes a new precinct-wide integrated drainage system, manifested in wide landscaped swales following the line of roads. The drainage system will reduce the 1:100 flood level at the site by 1metre from its current level. 11 The draft DCP includes a Proposed Master Plan that indicates street layout, drainage arrangements, building footprints and heights of buildings. The Master Plan reproduced below provides a graphic illustration of what the draft LEP and DCP intend to achieve. 12 The Master Plan places the following constraints on the development of the subject site:- · It places an eight-storey building that straddles the site and the Rositano site, thus requiring amalgamation. · It places a deep-soil strip along the boundaries. · In effect, it requires the drainage system to be in place before the site can be developed. 13 In general, the Master Plan significantly changes the existing street pattern of the Neil Street precinct and relies on several sites being amalgamated (or at least redeveloped in co-operation between different ownerships).

The issues 14 The council submitted a Statement of Issues containing 14 issues, most of which were subdivided into sub-issues. During the hearing it became clear that there was only one important issue, namely whether the granting of consent to the proposed development would undermine the planned orderly and economic development of land in the proposed Neil Street Precinct within the Merrylands Town Centre. The other issues in the statement were resolved by agreement between the experts or through amendments suggested by them.

The experts 15 Nigel Dickson, an architect and urban designer, prepared a report in support of the applicant's case. Lynn Hancock, who had worked on the Neil Street Master Plan and is also an architect and urban designer, prepared a report in the council's case. 16 In addition, the council relied on the evidence of Robert Chambers, a consultant town planner, and Richard Beers, a town planner employed by the council. The applicant further relied on the evidence of Nick Juradowitch, a consultant town planner.

17 The Court received the joint reports of the traffic and drainage experts, who had reached agreement.

Summary of the expert evidence 18 Ms Hancock, Mr Chambers, Mr Beers, Mr Juradowitch, Mr Dickson and Mr Chesterman gave concurrent evidence as an expert panel. The Court presented to the panel the set of questions, which is annexed to this judgment. All experts, including Mr Chesterman, were given an opportunity to respond to all questions.

Weight to be given to the draft LEP and DCP 19 It was common ground between the parties that the draft LEP and DCP would be made within three to six months. 20 Mr Beers thought that major weight should be given to the draft LEP and DCP, which he called a "visionary plan". He drew the Court's attention to the extent of public consultation that the council undertook with landowners, community members and interested stakeholders, including Aldi, advising and updating them on the preparation of the draft LEP and DCP. In his view, the draft plans represent years of collaboration between landowners, the community, the State government and the council. 21 Ms Hancock told the Court that the draft DCP and its Master Plan were based on a thorough and considered analysis of Merrylands' and the Precinct's existing character within the context of the government's objective for urban consolidation. The DCP was preceded by geotechnical, flooding, traffic and economic analyses. The purpose of economic testing was to ensure that the building envelopes of the Master Plan provide a yield that makes redevelopment to the desired urban form viable. 22 Mr Chambers listed eight reasons why the draft LEP and DCP/Master Plan should be given major weight. First, because the draft LEP and DCP facilitated each other. Second, because they were exhibited together. Third, because the draft DCP is not a generic plan but specific to the Neil Street Precinct. Fourth, because development consistent with the DCP will transform the Neil Street Precinct into a mixed use precinct that will deliver major infrastructure improvements to the town centre. Fifth, because the draft DCP was prepared with State government funding by a professional unit of the Department of Infrastructure Planning and Natural Resources. Sixth, because of the comprehensiveness of the planning considerations, including the integration of land use and transport, inherent in the making of the draft DCP. Seventh, because implementation of the urban design initiatives contained in draft LEP and DCP would be in the interest of orderly and economic development. Eighth, because implementation of this urban vision would be in the public interest. 23 While Mr Juradowitch and Mr Dickson expressed themselves in less glowing terms, they accepted that the draft DCP and its Master Plan were based on sound planning principles. Nevertheless, they thought that the draft LEP and DCP should be given minor weight for two reasons. First, because the plans were in draft form and the comments following their exhibition have not yet been processed. Second, because in effect they killed any development potential of the site until the new street pattern and drainage system were in place. 24 The joint report of the six experts states that the intent and key principles of the DCP are sound but that there are likely to be some departures to the building forms proposed. The Court-appointed expert, Mr Chesterman, supports the draft DCP. He states in his report as follows:- There has been considerable effort on the part of the council, with financial support from the State government, to prepare this comprehensive redevelopment strategy for amalgamation and redevelopment to densities that are appropriate to its highly accessible location and proximity to the town centre. It advocates and describes in considerable detail a broadly based urban design proposal for mixed-use development that is consistent with current metropolitan planning and with urban design principles that are widely accepted. The redevelopment would be of great benefit to Merrylands. The Neil Street Precinct Master Plan is based on sound urban design principles and, if implemented, would bring substantial benefit to the Merrylands town centre.

Implementation of the draft DCP/Master Plan 25 Mr Beers told the Court that the Master Plan does not involve major rearrangement of land ownership, though it requires drainage and road works on private land. It has inbuilt into it economic incentives, for example the eight-storey limit on the subject site without any FSR limit. Where necessary, the council would acquire land needed for infrastructure. Mr Beers agreed that the implementation of the drainage system depended on the making of a s 94 plan and said that the plan would be finished in July 2004 and likely to be adopted in September 2004. Ms Hancock added that, in her opinion, the economic testing of the proposed building envelopes proved that the plan provides sufficient economic incentives. Mr Chambers pointed out that in the southern half of the Neil Street Precinct just two ownerships (the subject site and the adjoining Rositano site) comprised 80 per cent of the land. 26 Mr Juradowitch was not convinced that the Master Plan could be readily implemented. He cast doubt on the soundness of the economic analysis, which was based on a nearby residential development, Holroyd Gardens, that, in his view, was not comparable. He believed that in the southern part of the precinct the Master Plan did not provide sufficient economic incentive. He was more optimistic for the implementation of the northern part. He considered a timeframe of 10 to 20 years realistic for implementation. Mr Dickson pointed out that the costs of co-ordinating the project would include the relocation of services. He added that most major urban projects were implemented by a development authority, which was not the case here. In his view this project was "many years away from eventuation". 27 Mr Chesterman said that he had no basis for commenting on the likelihood of implementing the Master Plan. Can the site be developed before the drainage system is operational? 28 Mr Beers said that the council's preferred position was not to approve development until the drainage system is implemented. In response to a question about how the site could be developed now, he said the following:- We would have to have discussions to see how best we can achieve the objectives of the DCP. Certainly, it is a permissible development, we may be obliged to approve it, but it would be 1m above the intended future levels and would have to accommodate the future drainage works and road pattern. 29 Mr Juradowitch pointed out that the council had required the applicant to build 500mm above the current 1:100 flood level.

What development on the site would be consistent with the draft DCP? 30 Ms Hancock provided a drawing showing two options for developing the site without amalgamating it with the Rositano site. She said that the drawing demonstrated that, by pulling back the building envelope at the northern end, it was possible to develop a building on the site that would essentially retain the urban form envisaged in the Master Plan. She thought that the key question was access because the Master Plan envisages that the site would be amalgamated in order to provide access to it. However, in the absence of amalgamation it would be possible to provide access from Terminal Place, along the northern side where the existing right-of-way is and then across the proposed swale area into the building. While this is not entirely consistent with the draft DCP, it would deliver an outcome consistent with the urban design principle that buildings define the edges of streets. There would also be an opportunity for a mainly residential building to have a retail or commercial component accommodated in the footprint of the podium. 31 Mr Juradowitch questioned the practicality of the building shape on Ms Hancock's drawing. Mr Dickson pointed out that the site is difficult to access. Impact on the draft DCP of approving the application 32 Ms Hancock said that the approval of the application would have significant impact on the rest of the Neil Street Precinct Master Plan. It would require revisiting the street structure and hierarchy, the public spaces and building envelopes as well as their interrelationships. Making changes to the Master Plan would only mitigate the negative impacts of this proposal rather than coming up with a solution that is high on urban amenity. 33 Mr Chambers added that the replacement of an eight-storey building for mixed use with a single-storey supermarket would reduce the residential yield in the Precinct. This would be an unfortunate outcome and an opportunity lost with such excellent access close to the railway station. It would also impact on s 94 contributions and the council's ability to implement the roads and drainage system. The proposed carpark cuts across the swale and its landscaping, which would have to be drastically altered.

34 Mr Dickson agreed that approval of the application would necessitate a rethinking of the Master Plan. He pointed out that the Master Plan's controls are directed towards residential development and that, in his opinion, the introduction of retail use would be a positive outcome. He submitted a drawing illustrating the impact and how the Master Plan could be adjusted to cope with it. Mr Juradowitch thought that the Aldi proposal might have advantages in that it would provide a landscaped buffer between the railway station and eight-storey residential buildings to the north.

The application considered as if the draft LEP and DCP did not exist 35 It was common ground between the experts that the proposal would not achieve the strategic and land use objectives of the draft DCP to develop this site for high-density residential or mixed use. They also agreed that, even in the absence of any Master Plan for the Neil Street Precinct, the proposal could be considerably improved by the following changes:-

(i). Relocation of the vehicle access adjacent to the Rositano driveway that could in the future connect to the proposed new road.

(ii). Provision of direct pedestrian access from Terminal Place that is legible from Pitt Street to a relocated entrance to the store and from the new road.

(iii). Relocation of the entrance to the store to the present position of the loading bay.

(iv). Relocation of the loading bay to the eastern edge of the site adjacent to the railway.

(v). Setting back the parking deck from Terminal Place and along the northern edge of the site to allow deep soil planting within the perimeter of the site. (vi). Provision of structure for future residential development above the proposed store.

(viii). Facilitating the infrastructure improvements required for implementation of the DCP proposals, being the drainage swale and the new road.

(ix). Mr Chesterman added a ninth change to the above, namely the provision of a coffee shop. The others agreed. 36 Although Mr Juradowitch was a signatory to the joint report advocating the above changes, in oral evidence he resiled from (vi) above, saying that, if the site were redeveloped in the future to include residential development, it would be cheaper to demolish the supermarket and start again. The applicant's counsel, Mr Austin QC, submitted that the applicant would accept a consent limited to 10 years. In a letter to the Court dated 13 May 2004, he amended the submission to a consent limited to 15 years. 37 As a consequence of the above evidence the applicant requested an opportunity to submit amended plans to the Court.

Findings 38 It was common ground between the experts that the proposal should be assessed in the existing context as well as in the context of the draft DCP. Since the experts also agreed that the application is unsatisfactory in the existing context and should be redesigned, the only finding open to the Court is that the application in its present form should be refused. There is therefore no utility in assessing it in the context of the draft LEP and draft DCP/Master Plan. 39 However, since the relationship of the proposal to the Master Plan was the major issue in the proceedings, and since the issue is likely to be relevant to the assessment of any amended application, I shall deal with the matter. Planning principle: conflict between development and Master Plan 40 Numerous judgments have dealt with the weight to be given to draft planning instruments. The generally accepted legal principle is that the weight depends on the imminence and certainty with which the draft is likely to be made. In Mathers v North Sydney Council [2000] NSWLEC 84 I held that:- It is appropriate, given the history of the development of the draft instrument to give draft LEP 2000 significant weight to the extent the Court is satisfied that approving the development will not detract from its objectives as expressly stated or reflected in the proposed controls…

Although temporally it (the draft LEP) is not imminent (having just come off exhibition), nevertheless the period during which its aims, objectives and individual provisions have been under consideration is an important factor in assessing the weight to be given to it. 41 In most cases, the inconsistency between a proposal and a draft-planning instrument relates to objectives, permissibility or a development standard such as height or floor space ratio. The inconsistency between the subject application and the draft LEP is only in relation to objectives as the proposed land use is permissible under the draft LEP and there is no breach of a draft development standard. 42 The most palpable inconsistency, however, is between the proposal and the long-term planning vision of the Neil Street Precinct Master Plan contained in the draft DCP. For this site the Master Plan shows the footprint of an eight-storey building following the line of a new road and swale. This is about as different from a single-storey supermarket as it is possible to be. While a draft DCP is not among the matters to be considered under s 79C(1) of the Environmental Planing and Assessment Act 1979, in this case it is an adjunct to the draft LEP and it is appropriate to take it into account as a matter of public interest. The question that arises is what planning principles the Court should apply to assessing a proposal, which is a permissible use, but which is antipathetic to the urban structure and built form envisaged in a Master Plan. 43 In my opinion, the Court should have regard to the following matters:-

· The quality of the Master Plan. Is it based on sound planning and urban design principles? Will it lead to a better outcome for the environment and the local community?

· The public exposure that the Master Plan has received. Have the relevant landowners, stakeholders and the wider community been consulted?

· The time frame for and likelihood of implementing the Master Plan. How long will implementation take? Is it likely that it can be implemented?

· The impact of the Master Plan on the development potential of the site. Does the Master Plan unreasonably delay the development of the site?

· The extent of inconsistency between the proposal and the Master Plan. Would approval of the proposal frustrate the implementation of the Master Plan? 44 It was common ground between the experts that the intent and key principles of the Neil Street Precinct Master Plan were sound. The Court-appointed urban design expert, Mr Chesterman, said that the Master Plan was consistent with current metropolitan planning and with urban design principles that are widely accepted, and would bring substantial benefits to the Merrylands Town Centre. The Court therefore accepts that the Master Plan is based on sound urban design principles. 45 In relation to the second consideration, I accept the council's evidence that there was ample consultation with landowners, stakeholders and the general community over a considerable period. 46 In relation to the third consideration, the experts were divided on how likely the Master Plan was to be implemented, though Mr Beers, Mr Chambers, Mr Juradowitch and Mr Dickson agreed that, if it is implemented, the time frame would be in the order of 10 to 20 years. As I have already pointed out at [27] above, Mr Chesterman said that he had no basis for commenting on implementation. I accept the council's experts' evidence that there is a reasonable likelihood that the Master Plan can be implemented. It contains economic incentives (in particular an unlimited FSR) that have been tested for viability and found to be sufficient to facilitate the site amalgamation and new infrastructure envisioned in the plan. I note Mr Dickson's comments that there is no intention to establish a special-purpose body in charge of implementing the plan. However, this is the normal process by which urban redevelopment occurs in Australia. The establishment of special-purpose bodies, such as development corporations, is the exception. 47 In relation to the fourth consideration, it is clear from the evidence that the development of the site in harmony with the Master Plan requires not only amalgamation with the Rositano site, but also a new drainage system. It is for this reason that the applicant's experts believe that the Master Plan frustrates any development proposal for the site. Mr Beers agrees that the council would prefer to delay the development until the drainage system is operational and he was unwilling to commit himself to a time. Development of the subject site in the next few years would therefore have to be consistent with the current 1:100 year flood level rather than the proposed level. As regards amalgamation with the Rositano site, the Court had no evidence before it to suggest whether this was possible or likely.

48 The drawing that Ms Hancock put into evidence suggests that an eight-storey apartment building is possible on the site without amalgamation. It would have a different footprint from that shown in the Master Plan. It would receive access from Terminal Place, and would allow the future development of the new road and swale. While it would not fully comply with the Master Plan, it would be much closer to it than a single-storey supermarket.

49 With respect to the fifth consideration, according to the council's experts, if the Aldi supermarket were built, it would necessitate a significant revisiting of the urban structure, drainage system, public spaces and building envelopes of the Master Plan. Mr Dickson submitted a drawing showing a modified plan that included the Aldi supermarket. It shows that the building footprints to the north must be altered, and the wide sweep of the landscaped swale in front of the site is truncated. 50 It remains to be seen how any amended proposal that the Court accepts into evidence will fare when subjected to an assessment similar to the above. Conclusion 51 It is now apparent to the Court that the original proposal is inconsistent with the vision the council has for the Neil Street Precinct. Furthermore, if the joint opinion of the experts is accepted, which it should be, the development application in its present form must be determined by refusal of consent.

52 The following two matters remain to be decided:-

(a) whether the applicant be granted a final opportunity to rely on amended plans; and

(b) whether the Court can take account of the applicant's change of position to accommodate a time limited consent. 53 Ms Jagot strongly opposes either course generally or on the ground that the applicant and its consultants have heretofore been involved in the ongoing process of preparation for a hearing and case management conducted by Commissioner Watts that at all times provided a liberal opportunity to address the issues that motivate the present application. Expert witnesses attended the issues conferences with Commissioner Watts. It is claimed by the council that nothing has evolved in the course of the formal hearing that can be regarded as novel or new material. Unfortunately there is no formal or reliable record of what occurred in Chambers with Commissioner Watts. However, the experts been involved in the joint conferencing process, including the Court-appointed expert, Mr Chesterman. At all relevant times the applicant has steadfastly maintained its position and made no attempt to modify the proposed development to meet the criticisms raised on behalf of the council until a report of the six experts was submitted preparatory to giving evidence concurrently. The experts jointly provided a number of suggestions for improving the prospect of acceptability. Mr Chesterman made one further independent suggestion. Neither party appears to have considered a limited time approval until it was raised by the Court.

54 Historically, merit appeals to this Court have been conducted in an adversarial manner. More recently, following the adoption of the new rules and practice directions, the Court is moving towards a situation wherein the principal objective is to achieve an acceptable outcome.

55 The effect of this progression is that expert witnesses have already been placed in a position of confidence whereby they can comfortably give their evidence and opinions on a non-partisan basis for the sole purpose of assisting the Court to reach the right decision.

56 In my opinion, the state of the evidence in this case affords an ideal opportunity for the Court to take advantage of the information already provided to it in an attempt to resolve the dispute in a way that is fair and just. Considerable expense has already been incurred. I believe it is imperative to formulate the parameters for the development of the site, taking advantage of the material already presented to the Court.

57 In my view, it is not in that interest to reject the application for development consent without further exploring the prospect of achieving a result compatible with the council's vision, provided that the proposal can remain essentially the same development as originally proposed in the development application.

58 Arguably, the amendments jointly proposed by the experts could be implemented by conditions of consent if the Court is otherwise satisfied that consent should be granted. The suggestions made are on their face positive. On balance, it is preferable for the Court to be fully informed of the consequences of taking the advice proffered by the experts.

59 I do not accept the submissions made on behalf of the council that it would be more appropriate to reject the application and allow the parties to negotiate independently. The Court is fully apprised of the issues and has the benefit of significant professional opinion and advice that will enable it to make an informed decision.

60 Accordingly, I propose to grant leave for the applicant to rely on the revised plan. Technically, any change amounts to an amendment. In this case the underlying proposal remains the same.

61 The plan submitted will be accepted into evidence and the Court will give consideration to it after hearing further evidence, if necessary, and submissions. It is unlikely that further evidence will be of any assistance to the Court. Some submissions have already been filed.

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