Victorian Civil and Administrative Tribunal|2005-12-21|Before: Australand Holdings P, Mr J

Australand Holdings P L v Yarra CC (Red Dot) [2005] VCAT 2716 (21 December 2005)

S 81 Planning and Environment Act 1987 - Yarra Planning Scheme - Business 5 Zone - Design and Development Overlay Schedule 1 - refusal to extend time for completion of development - change to planning controls since grant of the permit - development substantially commenced.

The responsible authority's decision to refuse an extension of time for the completion of the development allowed under permit no. 990578 is set aside. The time for the completion of the development allowed under permit no. 990578 is extended to 2 September 2008.

1 This matter involves an application by Australand Holdings Ltd [Australand] pursuant to Section 81(1)(a) of the Planning and Environment Act 1987 to review the Yarra City Council's [the council] decision to refuse an extension of time for the completion of the development allowed by planning permit No. 990578. The permit allows the use and development of 149 dwellings, associated car parking and landscaping at 80-110 Trenerry Crescent Abbotsford [the site].

2 At the hearing Mr Pitt and Mr Rantino tabled and spoke to written submissions to which they added further oral argument. I heard from 2 expert town planning consultants; Mr M Scott called by Mr Rantino on behalf of the council and Ms R Hansen called by Mr Pitt on behalf of Australand. I also heard from Mr F Watt, a consultant with expertise in the remediation of contaminated sites and Mr R Pradolin, National General Manager of Apartments for Australand.

3 The site is located on the east side of Trenerry Crescent and had been used for industrial purposes since early last century. It comprises an irregular shaped parcel of land that extends to the west bank of the Yarra River near Dights Falls. The site has an overall area of about 1.235 hectares. At the time the permit was granted the site was occupied by several vacant industrial buildings, including one that stretches along the site's east boundary facing toward the Yarra River.

4 After the time for objectors to appeal lapsed, on the 2 September 1999 the council issued the permit in question. Under the permit, the dwellings were to be provided within 7 buildings; some of which were existing former industrial buildings to be converted into apartments with the balance of the dwellings in several new buildings. In particular, the scheme involved the conversion of the industrial building facing the river into apartments as well as the construction of 2 new multi-level apartment modules to its north and south.

5 The permit was originally subject to 23 conditions. The applicant at the time, Walker Corporation, filed an application under Section 80 of the Planning and Environment Act 1987 against several conditions including those requiring the north and south apartment modules to be reconfigured so as to not encroach on the river's 1:100 flood level line and the height not to exceed that of the existing building to be retained.[1]

6 By order dated 23 December 1999 the tribunal comprised of His Honour Judge Wood and I varied the council's decision by, amongst other things, deleting conditions requiring the reconfiguration of the north and south apartment blocks and the reduction in height.[2]

7 Condition 22 on the permit sets time limits for both the commencement and completion of the development. The initial time for completion under condition 22 would have been 2 September 2001. The council has, however, been willing to grant 2 extensions of time for completion. The second was granted in March 2004 and extended the time for completion to 2 September 2005.

8 There have been a number of modifications to the originally approved development, some approved by the council and one other involving changes to the car park layout approved by the tribunal. These modifications are of no real significance to the consideration of the issues in this case.

9 Australand, which took over the original applicant company Walker Corporation in 2001, subsequently proceeded with the development. Of the 149 dwellings approved, 112 have now been constructed within 5 buildings that cover what I would describe as the southern two-thirds of the site. The development completed thus far includes the conversion of the former industrial building facing the river into apartments; the construction of apartments comprising the multi-level building module to the south of this building as well as dwellings immediately to the rear of these buildings up to the site's Trenerry Crescent frontage.

10 The remaining 37 dwellings were to be located on the northern third of the site; with 10 of these in the multi-level module [known a Building 3] to the north of the former industrial building facing the river. The other 27 dwellings were to be provided in a new 3 storey building [known as Building 2] which would extend between the site's Trenerry Crescent frontage and the rear of Building 3. Buildings 2 and 3 have not been constructed.

11 The northern part of the site remains largely "vacant" and unused, save that a 33 metre high red brick chimney associated with the previous industrial use remains. This chimney is of heritage value and is proposed to be retained as part of the total redevelopment of the site. Further, whilst Buildings 2 and 3 have not been constructed, works to prepare this part of the site for development, including the removal of redundant buildings, excavation of soil and subsurface material, construction of foundations and embankment remediation have been undertaken.

12 As a former industrial site, it was necessary for investigations to be carried out to determine whether the environmental conditions were suitable for the proposed residential use. Mr Watt became involved with the development of the site after it was discovered that the initial environmental audit process had failed to identify what would seem to be extensive contamination over the northern part of the site.

13 Mr Watt advised that in October 1999, an EPA appointed auditor was prepared to issue a Statement of Environmental Audit [the SEA] attesting to the site's suitability for the intended residential use. He went on to say that as construction activity recommenced and progressed, several discoveries were made which put into question the site's environmental condition.

14 Mr Watt said that in March 2000 a number of underground storage tanks were found on the site and it was determined that some leakage had occurred. This resulted in the SEA being retracted; however, the auditor indicated that upon this matter being rectified, the SEA would be re-issued.

15 Subsequent to this the presence of substantial amounts of asbestos not picked up in the initial audit processes were progressively discovered over the northern part of the site. It was initially thought that the asbestos was restricted to a discreet area and remediation works were carried out. However, when works resumed further contamination was found. Substantial remediation works involving a combination of the removal of soils and encapsulating other areas where no residential development is proposed were subsequently undertaken to bring about a situation whereby the environmental condition of the site is suitable for residential use. Mr Watt also explained that it was also necessary for an Environmental Management Plan for the entire site to be prepared and implemented to satisfy the auditor. It was Mr Watt's evidence that the discovery of contamination, the difficulties associated with remediation works to remove asbestos in this type of environment and the need to prepare an Environmental Management Plan have all contributed to delays of over 4 years.

16 There have also been other problems on this site associated with the condition of the retained chimney. In February 2002, the council's building surveyor issued an emergency order requiring works to make safe the upper part of the chimney structure. According to Mr Pradolin, over $700,000 was spent on restoring the chimney.

17 Whilst there were problems with the northern part of the site, development occurred over the southern part where there were little or no contamination issues. Given the delays with the development of the area to be covered by Buildings 2 and 3, the site was re-subdivided to facilitate the sale of the completed dwellings on the southern two-thirds. I understand that the northern third of the site remained in what is often described as a "balance" lot.

18 There is no dispute that the works thus far carried out on the site were commenced within the time limit. However, the time for the completion of the works has expired and as such Australand, is unable to complete the approved development; that is the construction of Buildings 2 and 3, without a further extension.

19 In anticipation that the development would not be completed within the time allowed under the second extension of time, on 7 April 2005, Australand's consultants applied for a further extension of time to allow for the completion of Buildings 2 and 3. On the 10 June 2005, the council refused to grant permission for the extension of time. Mr Rantino advised that the council's reasons for the refusal were ".........on the basis that there has been a material change in council policy relevant to the proposed development; that an excessive total amount of time had lapsed since the permit was granted and the reasons advanced by the Applicant for the extension had not been substantiated".

20 Given the reasons relied on by the council in refusing the request for an extension of time, it is appropriate that I briefly set out the nature of the planning scheme controls that are applicable.

21 Under the Yarra Planning Scheme, the site is located within the Business 5 zone and is affected by the following overlay controls:

•

Design and Development Overlay - Schedule 1 [DDO1]

•

Heritage Overlay [HO 337 - Victoria Park Precinct Abbotsford]

•

Environmental Significance Overlay - Schedule 1 [ESO1]

•

Land Subject to Inundation Overlay [LSIO]

•

Environmental Audit Overlay [EAO]

22 The same controls largely applied at the time that the permit was granted; however, there have some changes to the provisions of clause 21.05-6 of the MSS which relates to the Yarra River Corridor as well as the requirements set out in schedule 1 to the DDO.

23 At the time the permit was granted, Schedule 1 to the DDO stated that buildings and works "shall be constructed or carried out in accordance with Urban Design Guidelines for the Yarra River Corridor [1998]". These guidelines set out various requirements including that new development be setback a minimum of 12 metres from the Main Yarra Trail to provide for a landscaped buffer; and for building heights "up to 20 metres or 6 storeys above flood level" provided that significant view lines within the river corridor would not be compromised and there would be no negative shadow impacts.

24 In June 2005, Amendment C66 to the Yarra Planning Scheme was approved. Amongst other things, the amendment modified schedule 1 to the DDO to include design objectives to be achieved for the river corridor as a whole as well as specific objectives for the 4 sub-area identified in the City of Yarra Built Form Review. The site lies within the sub-area known as the "Current and Ex Industrial River Edge".

25 The current schedule also sets out specific provisions relating to buildings and works that are different to those set out in the 1998 guidelines. These provisions state that the height of buildings should not exceed 11 metres save that the height can be increased if the building is setback further; buildings should be setback 10 metres from a crest line identified in the schedule; buildings massing should allow for separation to allow views of the river and landscaping amongst buildings and buildings should avoid obscuring views of the river corridor from roads and bridges.

26 It is clear that Building 3, as approved, would not meet the requirement for the 10 metre setback to the crest line.

27 In making their submissions, Mr Pitt and Mr Rantino agreed that the principles set out by Ashley J in Kantor and Murrindindi [1997] AATR 285 (esp. at pages 314-315) are appropriate to the consideration of this request for an extension of time. I accept this; however, what also needs to be taken into account is that Kantor involved a request to extend the time for commencement of the development and not for the completion of development. In Juric v Banyule CC [2002] VCAT 396, the tribunal commented on the principles set out in Kantor; however, it went on to make the following remarks with respect the consideration of extensions of time for completion of development:

16. ..............................................However, as mentioned above, the circumstance of a substantial commencement has also to be taken into consideration. It appears that the principles in relation to imposing limitations on time for completion are either different from those for a commencement case, or overlap them but include some other considerations.

17. Limitations of time in relation to commencement prevent someone sitting on a permit for many years or decades until circumstances have changed so that the proposal has become inappropriate. Limitations on time for completion prevent or constrain someone who has made a substantial start from ceasing work, or proceeding very slowly so as to impose a part completed "folly" on the community for a substantial or indefinite period of time. A similar precaution against this difficulty that is sometimes employed is a permit condition requiring that a development that has been commenced must be completed. I think that the evil against which a completion limitation is directed is remedied where someone in fact proceeds with expedition to completion. It is more a matter of getting it finished, rather than preventing it from starting. As said previously, I recognise a substantial commencement and commitment by the Applicant. In these circumstances the Responsible Authority, as well as the permit holder, has already committed to the proposal, by granting the permit in the first place, and the problem can be seen more as getting it completed.

28 Whilst I agree that the principles set out in Kantor provide appropriate guidance for the consideration of this request, as pointed out by the tribunal in Juric, it is also appropriate and important that it be recognised that this case involves a request for an extension of time in circumstances where the development has been commenced and the request is to extend the time for completion.

29 In relation to the commencement issue Mr Rantino submitted that whilst stage 1 of the proposed development has been largely completed, there has been no substantial commencement of stage 2 which involves the area covered by Buildings 2 and 3. As such, Mr Rantino submitted that the circumstances can be considered more akin to those presented to the tribunal in First Watusi v Port Phillip CC [1998] VCAT 509, a case where the tribunal declined to grant an extension of time. In that case, the tribunal found that the permit was:

"......stale insofar as to what it allows, stale because such a considerable amount of time has elapsed since it was first granted, stale because of the changes to the planning scheme and policies that have occurred since and stale because it is so long since the application was made and notice of it was given.".

30 Further, in coming to terms with what works were commenced, the tribunal said that:

"No one really knows what works were commenced and the Applicant is in doubt as to what completion would involve."

31 I see the circumstances of this case to be somewhat different to those before the tribunal in First Watusi. In particular, there is no question in this case that there has been a substantial commencement of the development. In particular, about 75 per cent of the apartments have been constructed over the southern two-thirds of the site. Further, there is no doubt as to the works required to complete the development. I am unable to come to the view that the permit is stale simply because of the amount of time that has elapsed and the changes to the planning scheme; rather, it is a permit that the applicant has relied on heavily not only in terms of completing the construction of 75 per cent of the dwellings, but also to actively pursue the completion of the remaining dwellings over the northern part of the site.

32 Mr Rantino sought to divide the project into stages, as shown on the site plan diagram forming part of Ms Hansen's report, and submitted that weight should be given to the limited progress toward the commencement of development on the northern part of the site.

33 I have 2 observations to make about this submission. The first is that whilst the proposed development has been constructed in stages, the permit was approved on the basis of the whole redevelopment of the site. It is not uncommon for a large project like this to be constructed in stages; however, this does not mean that these stages ought to be considered independently from one another. The permit was sought for the development of the site as a whole and the applicant is entitled to rely on what the permit allows.

34 Second, whilst I accept that the construction of the buildings themselves over the northern part of the site has not progressed beyond the installation of footings, I do not accept that there has been little progress towards facilitating the development approved by the permit. Indeed it is a requirement under condition 19 of the permit that before buildings and works are constructed or commenced an SEA must be issued to attest to the site's suitability for a sensitive use, in this case, residential. The evidence before me was that substantial funds and a considerable amount of works have been undertaken to prepare the northern part of the site for development. In this regard Mr Pradolin's evidence was that about $6.7 million has been spent on remediation works. Further, about a further $1.1 million was spent on construction related items such as footings that are now in the ground; precast flooring system and other building items.

35 I do not think that there is any doubt that the applicant has been actively pursuing the development allowed by the permit as a whole and that there has been substantial commencement. In my view, this is a significant factor that supports the grant of the extension of time.

36 Turning specifically to the principles set out in Kantor, the relevant extracts were set out in some detail in the written submissions presented by both Mr Pitt and Mr Rantino. I do not propose to set out the relevant passages from the decision as they are lengthy; rather, I set out my views with respect to each of those principles as appropriate.

37 The first matter identified in Kantor case is whether the applicant has advanced a reason and material in support of the grant of the extension.

38 It seems that in this regard, the information submitted to the council when the request to extend the time for completion was made was not as detailed as the evidence presented at the hearing. In particular I note that the officer's report to the council states:

It is clear that the site has a history of industrial use resulting in its contamination. Remediation works have been required to make the site suitable for residential use. The precise nature of the works has not been disclosed by the applicant. Therefore it is difficult to establish how much time was devoted to remediation works and whether the works were a significant hurdle to completing the development.......

39 In my view, the evidence presented at the hearing was quite compelling in support of the proposition that the discovery of the underground storage tanks and asbestos has been a significant hurdle for the applicant. There was nothing presented to contradict or put into great doubt Mr Watt's evidence that these discoveries caused substantial delays that could not have been reasonably foreseen by the applicant given that an SEA had been issued for the site. I consider that the reasons and evidence provided by the applicant weigh in favour of the grant of the extension of time.

40 The second matter raised in Kantor is whether there has been a change in planning policy and how the interests of third parties may be affected. In this regard, it is clear that the main change relied on by the council is the amendment to the schedule in the DDO with its modified design objectives and buildings and works requirements.

41 Mr Scott's evidence was that the changes to the schedule to the DDO would bring about a different outcome, namely, Building 3 would be pushed back further away from the river. This was largely based on the introduction of the notion that new development should be setback not less than 10 metres behind a "crest line" that has been determined and shown for the Current and Ex - Industrial River Edge on a diagram 2. Mr Scott expressed the view that maintaining an appropriate setback to the crest line would work towards achieving the design objective for this precinct that seeks:

"To strengthen the apparent scale of the river and the topography of its banks, and allow vegetation to dominate views from and across the river corridor."

42 Without wanting to do injustice to the comprehensive nature of his evidence, the bottom line of Mr Scott's evidence was that Building 3, as approved, is too close to the river and that it would overwhelm the topographic character of the river bank and detract from the feeling of visual seclusion that is highly valued in this part of the river corridor. Mr Scott also expressed the view that the proximity of Building 3 to the river would also be heightened by the lack of opportunity for the installation of landscaping that would result in vegetation dominating views of the corridor.

43 Ms Hansen's view was that the modified objectives set out in the schedule of the DDO really amount to a re-working and update of those that previously existed. Ms Hansen agreed that Building 3 as approved would not meet the current setback requirement set out in the schedule to the DDO; however, she went on to say that the requirements set out in clause 2.0 of the schedule were not intended to be mandatory. In this regard Ms Hansen referred to comments made by the Amendment C66 panel when it stated:

"The Panel notes concern raised by some submittors that Council is likely to enforce the height controls and setback provisions in a prescriptive fashion irrespective of how the provisions are couched in the planning scheme. In this regard the Panel can only re-iterate that its support for the amendment is on the basis that the heights and setbacks identified in the schedules to the DDO's are neither maximum heights nor mandatory....."

44 Ms Hansen went on to say that in the circumstances of this case, it would not be reasonable to refuse the extension of time because Building 3 does not meet prescriptive standards that are now set out in the schedule. In support of her view Ms Hansen put forward that Building 3 had been designed as an integral part of a development that is now 75 per cent complete; the existing buildings on the land, the former industrial building and the southern building module, both extend beyond the crest line; Building 3 is to be positioned where the river bends and as such, is setback further away from its banks than the buildings to its south, and the height of the building represents a suitable transition between the Teachers Union building to the north and the industrial buildings to the south. Ms Hansen acknowledged that the site's location and the need for remediation and stabilisation of the bank has resulted in the loss of vegetation and limited opportunities for new landscaping; however, she considered that changing the development concept would result in an awkward outcome.

45 I think that the observations made by Ms Hansen that the objectives set out in the DDO amount to a reworking of the objectives set out in the previous schedule are largely correct. The previous objectives have commonality with those in the current schedule. For example, the previous objectives sought outcomes such as ensuring that the scenic qualities and visual character of the river corridor are not compromised by inappropriate siting and appearance of buildings and works; to prevent overshadowing of the river corridor and to protect and to enhance the bushland setting. I see these outcomes as being reflective of outcomes that are sought by the current objectives.

46 The main change really relates to the difference in the height and setback requirements set out in the previous guidelines compared to the current schedule to the DDO. I accept that the requirements set out in the schedule to the DDO are couched in the terms of what "should" be achieved and that they are not mandatory. Nonetheless, the requirements set out in the schedule do serve a purpose; that is, they help to understand the type of outcome that is envisaged by the design objectives. Further, whilst Mr Pitt queried the rationale behind how the definition of the crest line was arrived at, the situation is that it now forms part of the schedule to the DDO, it is a relevant consideration and must be taken into account.

47 In deciding whether the differences between what previously existed in the scheme and the current provisions are enough to warrant the refusal of the extension of time, I think it relevant to note the following.

48 It is fair to say that the council's concerns lie largely with Building 3, not Building 2.

49 Although Mr Scott considers that Building 3 is too close to the river, nonetheless, he does not take issue with the design of the building, its height or the way that it would sit at an angle compared to the building to its south.

50 Mr Scott agreed that the height of Building 3 was acceptable given that it has an appropriate relationship with the former industrial building; in conjunction with the southern apartment module, it would work in a positive way to creating the northern "bookend" to the former industrial building; and that it provides a suitable transition in height with the former industrial building further north.

51 Mr Scott agreed that the architectural detailing of Building 3 is acceptable. Mr Scott also agreed that the way the building has been "cranked" in a clockwise direction to reinforce the bend in the river is also appropriate.

52 Further, whilst Mr Scott expressed the view that Building 3 should be setback further from the river, he also agreed that given the circumstances of this case, an appropriate outcome could still be achieved even if the requirements set out in clause 2.0 of the schedule are not met in total. In this regard, Mr Scott put forward the view that whilst the northeast corner of Building 3 should be positioned 10 metres behind the crest line, it would be acceptable to run the building's façade parallel to the approved alignment to meet the northeast corner of the former industrial building. This would mean that although Building 3 would be sited 10 metres behind the crest line at its northern end, it would intrude into this area at its southern point. It seems to me that Mr Scott has not sought to apply the requirements of the DDO in a prescriptive way; rather he has sought to take the circumstances of the site into account and to balance them against the prescriptive requirements set out in clause 2.0 of the DDO.

53 Ultimately, I think that the current controls would support Building 3 being setback further from the river; however, not to the extent that total compliance needs to be achieved with the crest line setback specified in clause 2.0 for the "Current and Ex - Industrial River Edge" precinct. This is a factor that weighs against the grant of the extension of time. However, in other respects the height, design, and angle of Building 3 would be acceptable with this weighing in favour of the grant of the extension.

54 With respect to the rights of objectors, the most proximate residential neighbours to Building 3 are the dwellings on the site itself. It would be reasonable to expect that those residents would be aware of what is intended over the northern part of the site. Further, Mr Rantino did not pursue with any vigour he line that the extension should not be granted because of other third party interests.

55 The third matter raised in Kantor is whether the applicant has been seeking to "warehouse" the permit. Given the extent of works that have already been carried out and the applicant's actions to remediate the northern part of the site, I am unable to find that the applicant's aim was to "warehouse" the permit for an extended period in the hope of say, achieving a "windfall" by on selling the site. The applicant has demonstrated that it has taken substantial steps to act on the permit in full. This is also a factor that weighs in favour of the request.

56 The fourth matter raised in Kantor to be considered is the total elapse of time since the permit was granted. The permit was originally issued 6 years ago and in fairness to the council, it has been willing to allow the time for completion to be extended by 4 years. Following on from the point about "warehousing" the permit, the evidence does not support the conclusion that the applicant has held onto and not sought to act on the permit. Rather, it is clear that the applicant has sought to act on the permit and taken substantial steps to remediate the northern part of the site to facilitate the completion of the development.

57 The fifth matter is whether the time limit originally imposed was adequate in the circumstances. Given a project of this size and the problems that have since been encountered, it is clear that the time limit originally imposed was inadequate. Two extensions of time have been granted; however, I have been persuaded that even with the benefit of these, the applicant would struggle to complete the development allowed by the permit. Further, there is no evidence that the applicant's failure to complete the development has stifled other development in the area.

58 The sixth matter is the economic burden cast upon the applicant. On this issue, it was Mr Rantino's submission that whilst the development of land in accordance with a permit requires significant financial resources, it is the council's view that permit holders should not embark on such a costly exercise until they are financially ready to do so and that the community cannot be expected to "wait around" until market conditions are favourable.

59 The evidence presented at the hearing does not support the view that the applicant has been unable to complete the development because of financial problems or that market considerations came into play. Rather, the discovery of contamination over the northern part of the site and remediation works have caused the delay. As I have previously said, given that an SEA was issued for the site, I think the applicant can claim with justification that the delay has not been caused by its own inaction.

60 Further, it is also clear that the applicant has expended considerable funds on remediation works, repairing the historic chimney, constructing footings, stabilising the embankment, purchasing of items for construction as well as having to endure holding costs. These costs run into millions of dollars.

61 With respect to the fourth, fifth and sixth matters to be considered, I am of the view that the circumstances weigh in favour of the grant of the extension of time.

62 The seventh consideration raised in Kantor is the probability that a permit would be granted for the same development if the request for the extension of time were refused. In light of my view that the DDO would encourage a greater setback to the river, albeit not to the extent set out in the schedule, I think that a permit for a similar but not the same development would be granted.

63 However, as Mr Rantino correctly pointed out in his submission, what must be remembered is that this case is not a merits review of the proposal; it is a case where a decision needs to be made as to whether it is appropriate to grant an extension of time for completion. In this regard, the fact that the development may not be approved today in the same form as permitted given the changes to the scheme's controls is an important factor to take into account. However, I concur with Mr Rantino and Mr Pitt that it is not the only relevant consideration.

64 In my view, the circumstances which have caused the delay in the development being completed; the extent to which the development has been completed; the applicant's actions and commitment to developing the site in accordance with the permit and the financial commitment to facilitating the approved development all work together to weigh heavily in favour of the granting of this extension of time. Further, given that the height and design of Building 3 together with its relationship with other buildings is generally acceptable, I am unable to find that the change to the planning controls is sufficient basis to outweigh those factors that support the grant of the extension of time.

65 Accordingly, I will set aside the council's decision. An extension of the time to complete the development by the 2 September 2008 is granted.

[1] These were conditions 1(a) and (b) on the permit issued by the council.

[2] Refer to Walker Corporation v City of Yarra [No. P1999/76378]

Environment Act 1987

Australand Holdings P L v Yarra CC

At a glance

Court

Decision date

Before

Source

Judgment (22 paragraphs)

Australand Holdings P L v Yarra CC (Red Dot) [2005] VCAT 2716 (21 December 2005)

Parties

Legislation Cited (1)