Australian Leisure and Hospitality Group Pty Ltd v Council of the City of Sydney

Land and Environment Court (NSW)|2010-05-11|Before: Dr J

CITATION : Australian Leisure and Hospitality Group Pty Ltd v Council of the City of Sydney [2010] NSWLEC 1161

APPLICANT Australian Leisure and Hospitality Group Pty Ltd PARTIES : RESPONDENT Council of the City of Sydney

KEY ISSUES: DEVELOPMENT MODIFICATION :- Hotel Use of balcony

Zhang v Canterbury City Council (2001) 115 LGERA 373 Renaldo Plus 3 Pty Ltd v Hurstville City Council [2005] NSWLEC 315 CASES CITED: Jonah Pty Ltd v Pittwater Council (2006) 144 LGERA 408 Hillpalm Pty Ltd v Heaven's Door (2002) 55 NSWLR 226 1643 Pittwater Road Pty Ltd v Pittwater Council [2004] NSWLEC 685

APPLICANT Mr M Wright, barrister Instructed by Dr J Smith LEGAL REPRESENTATIVES: Norton Rose RESPONDENT Mr A Hawkes, solicitor City of Sydney Council

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

11004 of 2009 Australian Leisure and Hospitality Group Pty Ltd v Council of the City of Sydney

JUDGMENT 1 Commissioner: This is an appeal under s96(6) of the Environmental Planning and Assessment Act 1979 (the Act) against the refusal by the Council of the City of Sydney (the Council) of an application to modify development consent D/1998/996 for the Woolloomooloo Bay Hotel at 2 Bourke Street Woolloomooloo (the site). 2 The site is a two storey hotel on the corner of Bourke Street and Cowper Wharf Road, Woolloomooloo, which has its primary frontage to Cowper Wharf Road. There is a function room/restaurant located on the first floor of the hotel, and an external balcony facing the Cowper Wharf Road frontage which has an area of approximately 77.9 sq m. The site is adjoined to the east on Cowper Wharf Road by a building containing 16 residential units, and there are other residential premises on Bourke Street. 3 Development consent D1998/996 was granted by the Council on 8 December 1998 for the erection of the balcony, and is subject to condition 5: That the balcony shall be used for seated dining only and not for any other purpose at all times. 4 The applicant Australian Leisure and Hospitality Group Pty Ltd (ALH) lodged the s96(1A) modification application that is the subject of these proceedings (U98/00996/A) on 11 May 2009, seeking to modify condition 5 to read: That no more than forty four (44) persons at any time shall be permitted to use the first floor balcony. 5 In a letter accompanying the application, ALH's planner explained that the amendment did not seek to increase the number of patrons permitted on the balcony nor amend the hours of operation of the balcony, and was intended to enable the balcony to be used as an extension of the internal area on the first floor. The application included the proposed erection of an acoustic screen on the balcony. 6 There are a number of operative development consents in relation to the site, and which are identified in the Council's Statement of Facts and Contentions. Those relevant to the issues in these proceedings include consent DA97/968 granted on 25 February 1998 to change the hours of operation of the hotel, which includes condition 12 which prohibits the use by patrons of outdoor areas including the footpath to Cowper Wharf Road after 12 midnight, and condition 7, which controls noise to surrounding areas. Development consent DA98/474 granted on 6 July 1998 approved alterations and additions to the first floor for use as a function room/restaurant, and includes an identical condition to condition 7 in DA97/968. Use of the first floor function room as a place of public entertainment was first approved by consent U99/1145 granted on 13 January 2000, which was subsequently amended by s96 modifications, and which includes condition 2 which states: That on any night in which entertainment is provided on the first floor, any balcony shall not be used and the access door shall be kept locked. 7 Development consent U01/00056 approved on 28 March 2001 related to an application to extend Sunday trading hours from 10.00pm to 12.00 midnight, and includes conditions 2, 3 and 5: That the hours of operation shall be restricted to between 9.00am and 2.00am, Monday to Saturday and from 10.00am to 12.00am Sundays. That all outdoor seating areas shall cease operation after 11pm on Sundays. That the use of the premises shall not give rise to … transmission of 'offensive noise' to any place of different occupancy. 8 The approved floor plan for this consent shows 44 seats and 14 tables on the balcony, approved under D/1998/996.

9 The proceedings commenced as a conciliation conference under s34 of the Land and Environment Court Act 1979 (the Court Act) on site on 22 February 2010. On that occasion three neighbouring residents gave oral evidence and the opportunity was provided to view the site from the adjoining residential flat building at 7-41 Cowper Wharf Road. After further discussions between the parties, no agreement was reached and the conciliation conference was terminated. The parties agreed pursuant to s34(4)(b)(i) of the Court Act to my determining the proceedings following a hearing, and consented to the admission of the evidence given at the on site conference from the resident objectors. A hearing was held at which additional resident evidence and expert evidence was given. After the hearing further acoustic evidence was provided, and the parties made further submissions in writing. 10 The issues between the parties relate to whether there should be a trial period of 12 months imposed, and what conditions should be imposed. The Council does not oppose approval of the modification, however it contends that in the absence of a trial period the proposed change of use is not acceptable on management and amenity grounds.

Planning controls 11 The site is zoned No 10 Mixed Uses under the South Sydney Local Environmental Plan 1998 (the LEP). Clause 7 of the LEP provides: 7 Principal objectives

The principal objectives of this plan are: (a) to ensure a sustainable City of South Sydney through the efficient and equitable management and allocation of resources, and (b) to enhance the quality of life and well-being of the local community, and (c) to implement the goals and objectives contained in the Strategy for a Sustainable City of South Sydney published in June 1995 by the Council, and (d) to repeal all the existing local environmental planning instruments applying to the land to which this plan applies to the extent to which they apply to that land, and to replace those controls with a single local environmental plan, and (e) to rationalise the former land use restrictions by creating a small number of zones, and (f) to create an integrated planning framework of land use controls which allow detailed provisions to be made in development control plans. 12 Clause 21 provides the objectives of the Mixed Uses zone: (1) What are the objectives of the zone? The objectives of Zone No 10 are: (a) to allow, in appropriate circumstances, a mixture of compatible land uses such a residential, retail, commercial, light-industrial and industrial development, and (b) to promote mixed use planning by locating mutually supportive and compatible uses such as residential uses, places of employment and retail uses in close proximity to each other so as to minimise vehicular travel, and (c) to permit appropriate forms of residential development within the zone to mutually support the vitality of nearby commercial and urban village centres, and in doing so, assist successful urban consolidation, and (d) to incorporate contemporary urban design principles in the design of new buildings and the interpretation of their relationship with the public domain, and (e) to implement the principles of energy efficiency, travel demand management and other sustainable development practices as part of the development assessment process, and (f) to encourage the integration of suitable employment and resident intensive activities into accessible locations so as to maximise public transport patronage and encourage travel by foot and bicycle from surrounding areas, and (g) to minimise any adverse impact on residential amenity by devising appropriate design assessment criteria and applying specified impact mitigation requirements by the use of development control plans, and (h) to ensure that the nuisance generated by non-residential development, such as that related to operating hours, noise, loss of privacy, vehicular and pedestrian traffic or other factors, is controlled so as to preserve the quality of life for residents in the area. 13 The hotel is a heritage item under the LEP, and is located in the Woolloomooloo Heritage Conservation Area No 52 under the LEP. The site is identified as a 'contributory building' in the City of Sydney Heritage Development Control Plan. 14 The site is covered by the City of Sydney Late Night Trading Premises Development Control Plan 2007 which came into effect on 1 January 2008 (the Late Night Trading DCP). The site is in a Local Centre Area under the Late Night Trading DCP, and is a Category A - High Impact premises. Evidence 15 The evidence of the resident objectors on site was consistent with their written submissions in response to notification of the application, and focussed primarily on concerns about the behaviour of patrons using the balcony in the past, and if it is to be used in the future for drinking only. Concerns were also expressed about compliance with restrictions on hours of operation and other conditions applicable to the hotel operation, some applicable to other parts of the hotel building which are not the subject of these proceedings. 16 At the hearing Mr Blood, resident at 4 Bourke Street, gave evidence that he had observed within the previous week on a Thursday or Friday evening patrons standing and drinking on the balcony, and provided a photograph of the balcony taken on that occasion, and photographs of the rubbish bin area taken the day before the hearing (Exhibit 10). Photographs of the balcony taken in January 2010 were admitted and are Exhibit 11. Mr Blood stated that since the on site conference, he had made a complaint to the hotel management about use of the beer garden. 17 Expert planning evidence was provided by Mr Michael Neustein on behalf of ALH and by Ms Anthea Kalodakis on behalf of the Council. The planning experts disagreed as to whether the Late Night Trading DCP applies to this application, and whether a trial period is required as an incentive for the operator to provide good management, and whether the Plan of Management proposed by ALH is sufficient to ensure good management. 18 Mr Neustein was of the opinion that the Late Night Trading DCP does not apply to this application, and that the Council has not identified any deficiency in the proposed Plan of Management. Even absent the provisions of the Late Night Trading DCP, the same number of people will be using the balcony and the same trading hours will apply and he does not see any uncertainty as to the potential impacts. The Plan of Management is sufficient to moderate the operation of the premises. Mr Neustein was of the opinion that a trial period can be appropriate where there are uncertainties as to what will occur, however that is not the situation here. The capacity of the balcony would be 100 people, calculated at the rate per square metre in the Building Code of Australia, and with a maximum of 44 people, they would be spread out. The hotel has traded for many years before the neighbouring residential flats were built. There is no evidence that the behaviour of the patrons will change if they are standing. 19 Ms Kalodakis was of the opinion that the Late Night Trading DCP does apply to this application for an existing premises seeking approval for outdoor trade beyond 8.00pm, and that whether or not the DCP does apply, a trial period is warranted as it will provide an incentive for the operators to demonstrate that the Plan of Management and conditions of consent are implemented. A trial period creates a benchmark, and allows the consent authority to take away approval if management is poor. While a consent is subject to conditions and can be enforced, a trial period is more proactive and encourages the operator to prevent impacts. 20 Expert evidence on "vertical drinking" was provided on behalf of ALH by Dr Judith Stubbs and on behalf of the Council by Mr Darren Hunter. The experts disagreed as to whether the term "vertical drinking" applies to the proposal, and whether a one year trial period is justified. 21 Mr Hunter is a Project Coordinator (Drugs and Alcohol) employed by the Council. In his opinion the change of use of the balcony from a seated dining area to an outdoor extension of the first-floor entertainment area may give rise to a number of potential impacts identified as associated with "vertical drinking". He defines "vertical drinking" as referring to licensed premises or parts therein that have little or no seating, resulting in patrons standing and consuming alcohol. Vertical drinking can refer to a space inside a venue. Vertical drinking is associated with increased alcohol consumption for a number of reasons: patrons are unable to safely put their drink down, encouraging patrons to drink and possibly drink rapidly; and when patrons are required to stand and have to hold a drink in one hand it reduces their capacity to hold a glass or bottle of water or a plate or piece of food, which impacts on their choices to drink responsibly. Vertical drinking areas are identified as a key environmental factor associated with increased aggression in licensed premises, as these areas often lead to congestion and patrons bumping into each other, a major factor involved in alcohol-related assaults. In his opinion removal of the condition for seated dining only on the balcony has the potential to lead to increased and rapid alcohol consumption, decreased patron capacity to self regulate alcohol consumption by making food and water consumption more difficult, a less social and relaxed atmosphere, increased risk of violence and aggression from intoxication and from crowding, difficulty in monitoring access and capacity on the balcony, and increased noise on the balcony from potential increased alcohol consumption, patron numbers, social interaction and regular opening doors for access to and from the balcony. In his opinion a trial period would allow assessment of impact on local residents and effectiveness of the management of the balcony and patrons. Mr Hunter expressed concern that once operational it may be difficult to ensure the provision of a security guard as proposed in the Plan of Management to monitor numbers on the balcony, as the security guard may be called away to respond to other issues in the hotel. Mr Hunter noted that there had been significant resident concerns in the past. The provision of some seating and tables would provide some mitigation of potential impacts. 22 Dr Stubbs has qualifications and experience in social and strategic planning, including social impact and economic impact assessment. Dr Stubbs was of the opinion that the term "vertical drinking" does not apply to this proposal. Her review of UK and Victorian policy and guidelines indicates that "vertical drinking" and its potential to negatively impact the social environment of the venue is primarily related to the ability to increase capacity through the removal of furniture that may lead to increased patron frustration, and does not relate to increased alcohol consumption of "standing" versus "seated" patrons. Vertical drinking is associated with "high-volume" premises where there are large numbers of people and the furniture is removed to increase capacity. Guidelines within both the UK and Victorian contexts provide mitigations to limit any harm that may be associated with vertical drinking, and these mitigations are already employed at the hotel and its first floor. Dr Stubbs agreed that food is often provided at venues to mitigate increased alcohol consumption, as food slows down the absorption of alcohol into the body, however research indicated that the precise contribution of food service as opposed to other factors cannot be determined. In Dr Stubbs' opinion the current layout and design of the ground floor and first floor and balcony of the hotel appears to consider and aim to mitigate many of the venue characteristics which are identified in the literature as providing a risk factor for licensed premises linked with frequency of aggression and severity of violence. Inadequate or uncomfortable seating is one risk factor amongst many interrelated personal, social or environmental factors that contribute to increased consumption of alcohol and/or aggression. Based on her site visit to the premises it is a high amenity venue with quality food, entertainment, comfortable seating and active management. In relation to management, Dr Stubbs expressed the opinion that there does not appear to be sufficient evidence to suggest that there are poor management practices employed on the first floor, the balcony or across the venue as a whole. In her opinion a one-year trial is not necessary as the likely impacts of the proposal are not uncertain: the proposal is not expected to either exacerbate current adverse impacts experienced by local residents or to result in any additional new adverse impacts. Dr Stubbs noted that there had been two submissions and one petition with nine signatures received by the council in relation to this application which did not appear to be a high level of concern among residents in the immediate locality in her experience of such applications. The proposal enables a flexible and fluid use of the space, considering the first floor and balcony together. 23 Expert evidence on acoustic impacts was provided by Mr Rodney Stevens on behalf of ALH and by Mr Graham Atkins on behalf of the Council. Both experts attended the s34 conciliation conference on site on 22 February 2010, and their discussions resulted in an amended design for the proposed acoustic screen. In a letter dated 19 February 2010 Mr Stevens expressed the opinion that the acoustic screen in the form then proposed would mitigate patron noise from the balcony to not exceed background noise levels at the balcony of the nearest residence, and that moving the screen closer to the residential boundary, adding a return on the balcony and increasing the height of the screen would enhance the acoustic qualities of the screen. The proposal now before the Court includes those changes, and is for an aluminium framed screen at the eastern end of the balcony with a return along the Cowper Wharf Road frontage of 1000mm. The screen is to be constructed of distorted glass to minimise glare. 24 In a letter dated 25 May 2010 Mr Atkins noted the agreement between the experts at the s34 conference that the proposed screen would provide an improvement for acoustic amenity for the residential property to the east of the site. Mr Atkins estimated that opening the retractable awning over the balcony would provide an acoustic benefit to that residential property, to be a noise reduction benefit in the order of 2 to 3 dB. In his letter dated 29 February 2010 Mr Stevens disputed that the awning provides an acoustic benefit. 25 At the conclusion of the hearing certain conditions proposed by the Council relating to acoustic issues remained in dispute between the parties. After the hearing Mr Atkins and Mr Stevens provided a written joint report dated 7 June 2010 which addressed these proposed conditions, including windows and the access door, noise levels, and monitoring of noise. The experts agreed that the windows to the balcony should be kept closed, that the retractable awning over the balcony should be open other than in adverse weather conditions, that the access door be self closing, and that the balcony should not be used when entertainment is provided on the first floor. The experts agreed on a condition setting maximum noise levels, noise monitoring on three occasions during the first 30 days of operation, and provision for noise measurements in response to any substantiated noise complaint. Mr Atkins and Mr Stevens were not required for cross examination. The parties made written submissions concerning these conditions, and the other conditions that remained in dispute.

Consideration 26 The modification application is made under s96(1A) of the Act. It was not in dispute that the development to which the consent as modified relates is substantially the same development as the development for which the consent was originally granted. The maximum number of patrons permitted on the balcony, and the operating hours, are unchanged. The application was notified and the submissions in response are before the Court in the Council's bundle of documents. 27 Section 96(3) of the Act requires that those matters referred to in s79C(1) of the Act that are of relevance to the development the subject of the application are taken into account in determining whether to approve the modification sought. 28 The Council's Statement of Facts and Contentions included a contention that the proposed use is inconsistent with clause 7(b), and clause 21(1) objectives (g) and (h) of the LEP as it may lead to unacceptable impacts on residential amenity. The Council's position at the hearing was that the modification could be approved if a trial period is imposed, on the basis that the impacts on amenity are uncertain. If the Late Night Trading DCP applies, it requires a trial period. Even if it does not, a trial period is still appropriate. Trial period 29 The first issue to be considered is whether the Late Night Trading DCP applies to this application. The Late Night Trading DCP permits extension of trading hours beyond base trading hours for particular premises through a succession of trial periods, being first one year, second trial two years, and third and subsequent trials of five years. At part 2.7 the Late Night Trading DCP states: Approvals for late night trading premises will be limited in time to enable Council to assess the ongoing management performance of a premises and its impact on neighbourhood amenity. 30 Part 2.3 provides: 2.3 What type of development does this development control plan apply to? The City of Sydney Development Control Plan - Late Night Trading Premises applies to development applications for new and existing Category A and Category B premises (as defined in Section 2.4 of this DCP) that: a. seek approval for trading hours between 10pm and 7am the following day; b. currently trade between 10pm and 7am the following day, and seek refurbishment, additions or extensions that will result in an intensification of an existing use; c. seek an extension or renewal of trial trading hours as prescribed in this DCP; or d. seek approval for outdoor trading beyond 8pm. Note: this DCP is not retrospective nor does it derogate from existing consents. 31 Ms Kalodakis was of the opinion that part 2.3 d. applies, on the basis that this is a proposal to use an outdoor space after 8.00pm for a purpose other than seated dining, and that part 2.3 b. applies as this is an extension or intensification because of the increase in drinking and the movement of people in and out of the access door. 32 The proposal is for a change in the nature of the presently approved use of the balcony from seated dining only, to standing. It was common ground that the trading hours will not change, and the balcony will be restricted to 44 people. I agree with the applicant that this application is not seeking approval for outdoor trading after 8.00pm, as there is already outdoor trading on the balcony, and so part 2.3 d. does not apply. The proposal is a variation in the type of use of a specific part of the hotel by the same number of people as presently are permitted to use it, and in my view cannot be described as "refurbishment, additions or extensions"; accordingly part 2.3 b. does not apply. The consequence is that the Late Night Trading DCP does not apply to this application. 33 The issue then is whether, in considering the matters specified in s79C of the Act which include at paragraphs (b) and (c) consideration of likely impacts, including social and economic impacts in the locality, and the suitability of the site for the development, a trial period of one year is warranted. In Zhang v Canterbury City Council (2001) 115 LGERA 373 the Court of Appeal said: 83 I do not see any necessary incompatibility between the imposition of a condition limiting a proposed use to a probationary or trial period and the statutory requirement that the decision maker "take into consideration" both the "likely impact of the development" and "the suitability of the site for the development". It is possible to "take into consideration" matters even though their full significance cannot be known with precision. 84 Where, as in this case, the nature of the development application is for the "use" of existing premises - and, accordingly, adverse effects are readily reversible - a probationary or trial period may be an appropriate exercise of the statutory discretion. 85 The implications of the approach adopted by Talbot J would unnecessarily limit the statutory power to permit development for a specific period where the full implications of the development are not known or cannot be stated with sufficient certainty. In any such case, the "likely impact" or "suitability" will never be capable of complete assessment. Indeed, that is the very purpose of the probationary or trial period. The scope and purpose of the Act is better served by permitting experimentation, at least in circumstances where adverse effects will cease if the development consent were not, in the event, extended. The focus is then on "likely impact" during the probationary period. 34 Mr Wright for the applicant submitted that a trial period is not warranted. There is no change to the hours of operation; the operator is presumed to comply with the law; and the conditions can be enforced. Mr Wright submitted that the evidence of Dr Stubbs that this is not "vertical drinking" should be accepted, and that there is no basis for a trial period; and that Mr Hunter's concerns are based primarily on the possible increased consumption of alcohol, and an expanded notion of "vertical drinking" which is inconsistent with the literature. There is no intensification of use and no evidence of possible adverse impacts. This is a very modest change and there is a robust Plan of Management.

35 Compliance with the amended Plan of Management is proposed as a condition of approval. The Plan of Management includes provision for the management of behaviour of staff and patrons when entering, leaving or using the balcony, provision of CCTV recordings of activity on the balcony discs to Council for the purpose of investigating complaints on request, provision for recording of complaints, and for amendment of the plan if experience shows that it is reasonable or desirable to modify any of its provisions. When considered against the principles outlined in Renaldo Plus 3 Pty Ltd v Hurstville City Council [2005] NSWLEC 315, the Plan of Management should be regarded as appropriate for this proposed use of the balcony. 36 In considering the Council's contention that the proposed use could lead to adverse impacts associated with "vertical drinking", there is a clear difference of opinion between Mr Hunter and Dr Stubbs. Mr Wright submitted that the evidence of Mr Hunter that the proposal is "vertical drinking" should be given no weight, on the basis of his qualifications and experience, and that the evidence of Dr Stubbs that it is not should be preferred. 37 The evidence of Dr Stubbs was based on her comprehensive analysis of the literature in comparable jurisdictions, and on her qualifications and experience in social and economic impact assessment. Mr Hunter's evidence was primarily based on his experience in policy advising and assessing development applications for licensed premises during his period of employment with the Council. Whether or not the proposal currently before the Court constitutes "vertical drinking" as that term is understood in the comparable jurisdictions that were surveyed by Dr Stubbs is a matter that does not need to be resolved in these proceedings. Even if the proposal cannot appropriately be so described for the reasons given by Dr Stubbs, the issue is whether the change in the mode of operation of the balcony is likely to have adverse social or other impacts, including impacts on amenity of neighbouring residents, which are relevant considerations under s79C(1)(b) and (c) of the Act and under the LEP zone objectives, in particular cl21(1)(h). Framed in those terms, the evidence of both Mr Hunter and Dr Stubbs is relevant in assessing likely impacts, as is that of Mr Neustein and Ms Kalodakis.

38 In the joint report Dr Stubbs acknowledged that the current permitted use of the balcony results in a certain level of adverse impact on residential amenity, however she was of the opinion that the proposal would not exacerbate current impacts or add new impacts, and may mitigate some impacts such as acoustic privacy. Dr Stubbs described the risk factors as low. That assessment was based in part on her observations of the current management of the hotel, and of the nature of the clientele. Dr Stubbs acknowledged that there had been a recorded breach of licence conditions of allowing more than 44 people on the balcony. Mr Blood's evidence, supported by the photograph now part of exhibit 10, was that the balcony has been used by people standing to drink. In Jonah Pty Ltd v Pittwater Council (2006) 144 LGERA 408 Preston CJ held: 35 Hence, in undertaking the merit determination of whether to grant or modify a development consent, it is irrelevant to enquire as to who is the current owner/operator, or who might be the future owner/operator, or whether the present owner/operator has in the past acted or used the land unlawfully, or whether the future owner/operator is likely in the future to act or carry out any approved use unlawfully. 39 The potential acoustic impacts have been assessed by the experts on the basis of there being no more than 44 people using the balcony. The experts disagree as to the extent of acoustic benefit provided by the retractable awning. Limiting potential adverse impacts from the proposed use of the balcony, including acoustic impacts, depends to a significant extent on compliance by the operator with the Plan of Management, in particular through strict compliance with the limitation on numbers of people using the balcony. Even if the risks of adverse impacts arising from the behaviour of people standing as opposed to sitting could be regarded as low, it is appropriate to provide a mechanism by which management of the proposed use of the balcony and compliance with the Plan of Management and the other conditions of consent can be measured, and adjustments made if necessary to the Plan of Management or other conditions. These circumstances are similar to those in Zhang where any adverse effects would be readily reversible by cessation of the use, or possibly addressed by adjustments to the Plan of Management or amendment of acoustic measures. I agree with the Council that it is appropriate to require a 12 month trial period to provide an incentive for the operator to comply with the Plan of Management and conditions and to enable adjustments to be made to the Plan of Management and acoustic measures if required. Conditions 40 The conditions that remain in dispute between the parties are conditions 5(a), 5(c) - (g), 5(d), 19A, 19B and 19C. In considering whether these proposed conditions should be imposed, the starting point is the decision of McClellan CJ in 1643 Pittwater Road Pty Ltd v Pittwater Council [2004] NSWLEC 685, holding that conditions can be imposed by a consent authority when determining an application for modification; and that the limits of discretion conferred will be defined by the matters raised for consideration by the application. 41 Condition 5 as proposed by the Council provides: (5) USE OF BALCONY (a) The approved use of the balcony is for seated dining and / or functions associated with the first floor function room/restaurant. (b) That the first floor balcony shall be used by a maximum of 44 people. (c) The hours of operation for the use of the balcony for purposes other than seated dining are regulated as follows: (i) The hours of operation are restricted to between 9:00am and 10:00pm Monday to Saturday, and between 10:00am and 10:00pm on Sundays. (ii) Notwithstanding (i) above, the use may operate between 10:00pm and midnight Monday to Saturday, and between 10:00pm and 11:00pm on Sundays for a trial period of 1 year from the date of issue of the Occupation Certificate. Council's Planning Unit is to be informed in writing of the date of commencing the trial hours. (d) During the use of the balcony, the windows facing the balcony shall be kept closed at all times, the awning above the balcony shall be extended (other than when adverse weather conditions prevail), and the door is to be self closing and acoustically sealed closed unless people are entering or exiting the balcony. (e) On any night in which entertainment is occurring on the first floor; any balcony shall not be used and the access door shall be kept locked. (f) Speakers must not be installed and music must not be played on the balcony. (g) A modification application may be lodged to continue the use of the balcony for purposes other than seated dining before the end of the trial period. Council's consideration of a proposed continuation of the use permitted by the trial will be based on, among other things, the performance of the operator in relation to the compliance with development consent conditions, any substantiated complaints received and any views expressed by the Police. If the application is lodged before the end of the trial period to continue the use outlined in (c) above, then the premises may continue to operate in accordance with condition (c)(ii) until the Council has determined the application. 42 The applicant opposed condition 5(a) on the basis that it seeks to re-characterise the proposed use and would render futile the application before the Court. The Council notes the restrictions on possible activities on the balcony contemplated in the conditions containing acoustic measures, however submits that the condition as proposed would allow a wide range of uses associated with the indoor first floor area as described in the documents accompanying the application. I agree with the Council that there are other conditions, including 5(e) and (f), which would limit the range of activities likely to impact on amenity that could be carried out on the balcony. In the context of those conditions, and the noise limits specified in proposed condition19A, I agree with the applicant that the limitation in the form proposed by the Council in the form of condition 5(a) would be unnecessarily restrictive and is unnecessary. 43 Condition 5(c) imposes a trial period of 12 months, and for the reasons outlined above, I agree that it should be imposed. Condition 5(g) in part enables the use to continue past the 12 month period if an application for modification to continue the use is made before the end of that period. Such a condition would avoid an application having to be made early in the trial period rather than towards the end of the 12 month period, and would ensure that there would be a sufficient period of operation to enable a proper assessment of impacts to be made. The applicant opposes that part of condition 5(g) that specifies the matters for consideration by Council in determining such an application, in particular the reference to "substantiated" complaints. These proceedings have articulated the factors that would be relevant in consideration of an application to continue the use, and condition 19B in particular will provide evidence to be used as part of that process. Given the history of opposition to the proposal, it could reasonably be expected that any complaints from adjoining residential or other premises will be recorded and investigated. I agree with the applicant that the second sentence of condition 5(g) should be deleted. 44 The applicant disputes that the inclusion of the requirement to extend the awning condition 5(d) is based on the acoustic evidence, however in its written submissions in reply stated that it is prepared to accept this condition. The condition was agreed to by the acoustic experts, and it is appropriate that it be included. 45 Proposed conditions 19A and 19B read: (19A) NOISE - LICENSED PREMISES

(a) The LA10 noise level emitted from the use of the balcony must not exceed the background noise level (LA90) in any Octave Band Centre Frequency (31.5 Hz to 8 kHz inclusive) by more than 5dB between the hours of 7.00am and 12.00 midnight when assessed at the boundary of any affected residence. (b) The LA10 noise level emitted from the use must not exceed the background noise level (LA90) in any Octave Band Centre Frequency (31.5 Hz to 8 kHz inclusive) between the hours of 12.00 midnight and 7.00am when assessed at the boundary of any affected residence. (c) Notwithstanding compliance with (a) and (b) above, the noise from the use must not be audible within any habitable room in any residential property between the hours of 12.00 midnight and 7.00am. (d) The L10 noise level emitted from the use must not exceed the background noise level (L90) in any Octave Band Centre Frequency (31.5 Hz to 8 kHz inclusive) by more than 3dB when assessed indoors at any affected commercial premises. (e) The use of the premise must be controlled so that any emitted noise is at a level so as not to create an "offensive noise" as defined in the Protection of the Environment Operations Act 1997 to any affected receiver. (Added)

During the first 30 days of terrace being occupied at the First Floor (facing Cowper Street Wharf) at the premises, the following noise monitoring must be undertaken: (a) A suitably qualified acoustic consultant must be appointed. The consultant must possess the appropriate qualifications and experience necessary to render them eligible to be a full member of the Australian Acoustics Society (AAS), Institution of Engineers Australia (IEA) or the Australian Association of Acoustical Consultants (AAAC). The acoustic consultant (acceptable to Council) must measure and verify that the noise emanating from the terrace on the first floor, operated at the full capacity complies with the noise criteria in the "Noise-Licensed Premises" condition. The acoustic consultant should liaise with Council for the purposes of organising access to the nearest residential premises for the purpose of undertaking this noise monitoring. The acoustic consultant shall, if necessary, make recommendations to ensure that the noise emanating from the premises complies with the noise criteria in "Noise - Licensed Premises" condition. (b) The noise measurements must be: (i) undertaken without the knowledge of the applicant, manager or operator of the premises; and (ii) taken on at least three different occasions on three different days of the week (excluding Monday, Tuesday and Wednesday) between the 10pm and 12 midnight or close of business, whichever occurs first; and (iii) submitted to Council's Licensed Premises unit within 7 days of the testing. (c) If the acoustic consultant recommends that additional treatment or works be undertaken under condition (a) above, those recommendations must be: (i) submitted to Council with the noise measurements as required in (b)(iii) above; and (ii) implemented to the acoustic consultant's satisfaction before the end of the first 30 days of terrace being used at the premises. If the acoustic consultant's recommendations are not implemented in accordance with this condition, the terrace on the First floor facing Cowper Wharf Road must not be used for purposes other than seated dining until such time as the recommendations are implemented and verified. (d) All fees and costs associated with the noise measurements, assessment and reporting shall be the responsibility of the Applicant. 46 The applicant opposes these conditions, and conditions 5(e) and (f), on the basis that they are a duplication of conditions in existing consents. In the written submissions provided on 21 May 2010 the applicant submitted that it relied on the acoustic evidence provided in September 2009, however was willing to agree to condition 19B as a further measure to reduce any concern that there may be an impact on adjoining residents. I agree with the applicant, relying on Hillpalm Pty Ltd v Heaven's Door (2002) 55 NSWLR 226, that the conditions imposed on the earlier consents continue to have effect. However, given the number and diversity of operative development consents for the hotel identified in the Council's Statements of Facts and Contentions, and the importance of the issue of potential noise impacts from the proposed use of the balcony in these proceedings, I am satisfied that it is appropriate, as submitted by the Council, to include all conditions directly applicable to the use of the balcony in any modification approval. Condition 19B is appropriate to ensure compliance with condition 19A and to enable assessment of impacts at the end of the trial period. 47 The Council proposes condition 19C in the following terms: (19C) COMPLAINTS Where a noise complaint is received by Council from a place of different occupancy and the noise source is proven by a Council Officer to be non-compliant with Condition 19A, the Council may employ a consultant to measure noise emanating from the property and to recommend (if necessary) appropriate actions to ensure compliance with the Condition (19A) "Noise - Licensed Premises". The consultant must be a full member of the Australian Acoustic Society (AAS), Institution of Engineers Australia (IEA) or the Australia of Acoustical Consultants (AAAC). The cost of such appointment and associated work shall be borne by the licensee, who shall also ensure the recommendations of the acoustic consultant are implemented. 48 The applicant opposes this condition on the basis that it is ambiguous and uncertain, in particular the reference to "proven by a Council officer". This condition was re-drafted by the Council in response to the applicant's submission that the reference in the original version to "substantiated complaints" was ambiguous and uncertain. The Council submits that a similar condition has been imposed in other matters. The Council proposes that an alternative wording of the condition would be acceptable: The applicant shall be required to pay the costs of Council in relation to any breach of conditions 19A; including the costs of engaging a suitably qualified acoustical consultant to measure the noise impacts from the use of the building. 49 As a further alternative, the Council would accept a condition that required the Plan of Management to be amended to require the engagement of a suitably qualified acoustical consultant to assess the noise impacts from the use of the building, should the Council issue a notice of breach of conditions 19A. 50 The substance of the condition as presently drafted is to enable noise measurement to be undertaken in response to a complaint, and for the cost of that to be borne by the applicant (or other operator of the hotel). I am not persuaded that such a condition is required during the trial period where the maximum noise levels are specified, and where there is provision for noise monitoring to be undertaken on at least three different occasions at the cost of the applicant, and with the requirement to implement any recommended treatment or works following that monitoring. Conclusion 51 The modification application should be approved, subject to the conditions proposed by the Council and agreed to by the applicant, and including conditions 5(c), 5(e), 5(f), 5(g) (with amendment), 19A and 19B. 52 The orders of the Court are: 1. The appeal is upheld. 2. The application to modify development consent D/1998/996 for the Woolloomooloo Bay Hotel at 2 Bourke Street Woolloomooloo is approved subject to the conditions in Annexure A. 3. The exhibits are returned except for exhibits 5, A, B, and E. Linda Pearson Commissioner of the Court

ANNEXURE "A" CONDITIONS OF CONSENT Australian Leisure and Hospitality Group Pty Ltd v Council of the City of Sydney

(1) That prior to issuing a Construction Certificate, it will be necessary to lodge with Council a fee of $3,750 in the form of Cash or non expiry Bank Guarantee being the building damage deposit for the public way. This deposit will be returned upon the satisfactory completion of the work approved under this application and the submission of all relevant certificates provided that there is no damage to the public way. A written request shall be made to the Council for the return of the deposit.

(2) That prior to issuing the development consent, it will be necessary to produce evidence of the payment of the levy, or the first instalment of the levy, required under the Building and Construction Industry Long Service Payments Act 1986, and ensure that the plans are suitably endorsed. The levy, to the value of $500, or first instalment (as applicable), can be paid to the Council, providing that a completed levy payment form accompanies the payment.

(3) APPROVED PLANS That the development shall be generally in accordance with plans numbered 1 and 2 amended November 1998,

And as amended by drawing AR515, Revision F, prepared by Bate Architecture, dated 15 March 2010,

(Amended Appeal No 11004 of 2009) (3A) HERITAGE The proposed works are to be carried out in a manner that minimises demolition, alterations and new penetrations/fixings to the significant fabric of the existing building which is listed as a Heritage Item. (Added Appeal No 11004 of 2009) (3B) PLAN OF MANAGEMENT The use must always be operated / managed in accordance with the Plan of Management, signed and dated 11 May 2010. (Added Appeal No 11004 of 2009) (4) That the awning above the first floor balcony shall be supported by suspended rods and not columns as indicated by the sketch dated 19 November 1998.

(5) USE OF BALCONY (a) Deleted (b) That the first floor balcony shall be used by a maximum of 44 people . (c) The hours of operation for the use of the balcony for purposes other than seated dining are regulated as follows: (i) The hours of operation are restricted to between 9:00am and 10:00pm Monday to Saturday, and between 10:00am and 10:00pm on Sundays. (ii) Notwithstanding (i) above, the use may operate between 10:00pm and midnight Monday to Saturday, and between 10:00pm and 11:00pm on Sundays for a trial period of 1 year from the date of issue of the Occupation Certificate. Council's Planning Unit is to be informed in writing of the date of commencing the trial hours. (d) During the use of the balcony, the windows facing the balcony shall be kept closed at all times, the awning above the balcony shall be extended (other than when adverse weather conditions prevail), and the door is to be self closing and acoustically sealed closed unless people are entering or exiting the balcony. (e) On any night in which entertainment is occurring on the first floor, any balcony shall not be used and the access door shall be kept locked. (f) Speakers must not be installed and music must not be played on the balcony. (g) A modification application may be lodged to continue the use of the balcony for purposes other than seated dining before the end of the trial period. If the application is lodged before the end of the trial period to continue the use outlined in (c) above, then the premises may continue to operate in accordance with condition (c)(ii) until the Council has determined the application.

(Amended / Added Appeal No 11004 of 2009) (5A) RECEPTACLES FOR CIGARETTE BUTTS Ashtrays are to be installed and maintained in accordance with the Plan of Management. (Added Appeal No 11004 of 2009 ) (6) That all relevant conditions attached to DA 97-968 dated 25 February 1998 and DA-0474/98 dated 6 July 1998 shall be complied with at all times.

(7) The applicant will place a positive covenant on the title of the land to control the maintenance and insurance of the balcony that encroaches over Cowper Wharf Roadway. The covenant shall be to the satisfaction of the Council and draft terms are available from the One-Stop-Shop. (8) ERECTION OF A HOARDING Before erecting any hoarding, an application must be made to the Director of Public Works and Services for a Builders Hoarding Permit (for approval under the Roads Act 1993). No excavation shall be carried out on the public way beneath or adjacent to the hoarding without the approval of the Director of Public Works and Services.

(a) All loading and unloading associated with construction activity must be accommodated on site. (b) If, during excavation, it is not feasible for loading and unloading to take place on site, a Works Zone on the street may be considered by Council. (c) A Works Zone may be required if loading and unloading is not possible on site. If a Works Zone is warranted an application must be made to Council at least 8 weeks prior to commencement of work on the site. An approval for a Works Zone may be given for a specific period and certain hours of the days to meet the particular need for the site for such facilities at various stages of construction. The approval will be reviewed periodically for any adjustment necessitated by the progress of the construction activities.

(Added Appeal No 11004 of 2009) (9) That the developer shall accept responsibility for the cost of construction of any consequential roadworks in the nature of kerbing, guttering, drainage etc. The work shall be done by the Council, unless other arrangements are approved in writing by the Director of Public Works and Services. (10) That during demolition, excavation and building work, the public way shall not be obstructed by building materials or materials from the site in any way. (11) That stormwater shall not be connected to the sewerage system and shall be disposed from the site in accordance with Council's standard requirements for stormwater discharge. Stormwater shall not be connected to the sewerage system. All details of stormwater discharge shall be approved by a Council-registered stormwater certifier prior to the approval of the construction certificate.

(12) That only clean and unpolluted water shall be permitted to discharge from the subject development/site into Council's stormwater drainage system, in accordance with Council's requirements.

(13) CONSTRUCTION NOISE That any excavation, demolition and building work shall comply with Australian Standard 2436-1981 Guide to Noise Control on Construction, Maintenance and Demolition Sites.

HOURS OF WORK AND NOISE - OUTSIDE CBD (14) That building / demolition work in connection with the proposed development shall only be carried out between the hours of 7:00am and 5:00pm on Mondays to Fridays, inclusive, and 7:00am and 3:00pm on Sundays and no work shall be carried out on Sundays or public holidays, where applicable, these restrictions do not apply to the maintenance of site cranes nor to the use of mobile cranes which stand and operate from a public road, provided that a permit has been obtained from the Director of Public Works and Services Department for the use of a mobile crane; (a) mobile cranes operation from the roadway shall not be accepted as a method of constructing the proposed buildings; (b) for special operations, such as the hoisting of plant and equipment or the erection and dismantling of on-site tower cranes, which warrant the on-street use of mobile cranes outside the approved hours of building work, permits shall be obtained 48 hours beforehand from the Police Traffic Branch and the Director of Public Works and Services Department.

The hours of construction and work on the development must be as follows:

(a) All work, including building/demolition and excavation work, and activities in the vicinity of the site generating noise associated with preparation for the commencement of work (eg. loading and unloading of goods, transferring of tools etc) in connection with the proposed development must only be carried out between the hours of 7.30am and 5.30pm on Mondays to Fridays, inclusive, and 7.30am and 3.30pm on Saturdays, with safety inspections being permitted at 7.00am on work days, and no work must be carried out on Sundays or public holidays. (b) All work, including demolition, excavation and building work must comply with the City of Sydney Building Sites Noise Code and Australian Standard 2436 - 1981 "Guide to Noise Control on Construction, Maintenance and Demolition Sites".

(Added Appeal No 11004 of 2009) (15) Despite any works to the public way implicit in the approval or anything indicated on the plans, no work is to be undertaken on the public way without a separate application to, and approval by, the Director of Public Works and Services;

(16) That no garbage or industrial waste shall be placed on the public way (eg footpaths, roadways, plazas, reserves etc) at any time;

(17) That the premises shall be ventilated in accordance with the requirements of the Building Code of Australia and Council's Ventilation Code

(18) That plans and specifications showing details of all proposed mechanical ventilation systems shall be submitted and approved by Council or an accredited certifier before a 'Condition Certificate' is issued;

(18A) REFLECTIVITY The Certifying Authority must ensure that the visible light reflectivity from the acoustic screen does not exceed 20% prior to issue of the Construction Certificate.

(Added Appeal No 11004 of 2009) (19) That noise and vibration from the use of any plant equipment and/or building services associated with the premises shall not give rise to an "offensive noise" as defined under the provisions of the Noise Control Act 1975;

(19A) NOISE - LICENSED PREMISES (a) The L A10 noise level emitted from the use of the balcony must not exceed the background noise level (L A90 ) in any Octave Band Centre Frequency (31.5 Hz to 8 kHz inclusive) by more than 5dB between the hours of 7.00am and 12.00 midnight when assessed at the boundary of any affected residence. (b) The L A10 noise level emitted from the use must not exceed the background noise level (L A90 ) in any Octave Band Centre Frequency (31.5 Hz to 8 kHz inclusive) between the hours of 12.00 midnight and 7.00am when assessed at the boundary of any affected residence. (c) Notwithstanding compliance with (a) and (b) above, the noise from the use must not be audible within any habitable room in any residential property between the hours of 12.00 midnight and 7.00am. (d) The L 10 noise level emitted from the use must not exceed the background noise level (L 90 ) in any Octave Band Centre Frequency (31.5 Hz to 8 kHz inclusive) by more than 3dB when assessed indoors at any affected commercial premises. (e) The use of the premise must be controlled so that any emitted noise is at a level so as not to create an "offensive noise" as defined in the Protection of the Environment Operations Act 1997 to any affected receiver.

(Added Appeal No 11004 of 2009) (19B) ADDITIONAL NOISE TESTING During the first 30 days of terrace being occupied at the First Floor (facing Cowper Street Wharf) at the premises, the following noise monitoring must be undertaken: (a) A suitably qualified acoustic consultant must be appointed . The consultant must possess the appropriate qualifications and experience necessary to render them eligible to be a full member of the Australian Acoustics Society (AAS), Institution of Engineers Australia (IEA) or the Australian Association of Acoustical Consultants (AAAC). The acoustic consultant (acceptable to Council) must measure and verify that the noise emanating from the terrace on the first floor, operated at the full capacity complies with the noise criteria in the "Noise-Licensed Premises" condition. The acoustic consultant should liaise with Council for the purposes of organising access to the nearest residential premises for the purpose of undertaking this noise monitoring. The acoustic consultant shall, if necessary, make recommendations to ensure that the noise emanating from the premises complies with the noise criteria in "Noise - Licensed Premises" condition. (b) The noise measurements must be: (i) undertaken without the knowledge of the applicant, manager or operator of the premises; and (ii) taken on at least three different occasions on three different days of the week (excluding Monday, Tuesday and Wednesday) between the 10pm and 12 midnight or close of business, whichever occurs first; and (iii) submitted to Council's Licensed Premises unit within 7 days of the testing. (c) If the acoustic consultant recommends that additional treatment or works be undertaken under condition (a) above, those recommendations must be: (i) submitted to Council with the noise measurements as required in (b)(iii) above; and (ii) implemented to the acoustic consultant's satisfaction before the end of the first 30 days of terrace being used at the premises. If the acoustic consultant's recommendations are not implemented in accordance with this condition, the terrace on the First floor facing Cowper Wharf Road must not be used for purposes other than seated dining until such time as the recommendations are implemented and verified. (d) All fees and costs associated with the noise measurements, assessment and reporting shall be the responsibility of the Applicant.

(Added Appeal No 11004 of 2009) (20) That all liquid wastes other than stormwater arising on the premises shall be discharged to the sewer in accordance with the requirements of Sydney Water.

The reason for Council granting consent, subject to the above conditions, is:-

Granting unconditional consent would be likely to adversely affect the amenity of the neighbourhood and would not be in the public interest.

CONSTRUCTION CERTIFICATE AND OCCUPATION CERTIFICATE TO BE SUBMITTED

A Construction Certificate and Occupation Certificate must be obtained from the Principal Certifying Authority and copies submitted to Council prior to commencement of occupation or use of the first floor balcony as amended by Consent U98/00996/A. (Added Appeal No 11004 of 2009)

Linda Pearson Commissioner of the Court

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

(2001) 115 LGERA 373

(2006) 144 LGERA 408

At a glance

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Judgment (48 paragraphs)

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Cases Cited (5)

Cited By (1)