Australian Village No. 12 - Gladstone St Pty Ltd v Inner West Council

Site and locality

1. The site is an irregular shape with frontages to Gladstone Street, Wilford Street and Gladstone Lane. The principal frontage of some 74.58m is to Gladstone Street. The Site has an area of 1,445 sqm.
2. The locality is a mixture of light industrial and high and low density residential developments. A plan showing the subject site and surrounds with their zoning follows.

Statutory Context

1. The Site is zoned B7 Business Park pursuant to Marrickville Local Environmental Plan 2011 (MLEP 2011). The objectives of the zone are: • To provide a range of office and light industrial uses. • To encourage employment opportunities. • To enable other land uses that provide facilities or services to meet the day to day needs of workers in the area. • To provide for limited residential development in conjunction with permissible active ground floor uses. • To provide business and office premises for the purposes of certain art, technology, production and design sectors. • To enable a purpose-built dwelling house to be used in certain circumstances as a dwelling house.
2. Residential flat buildings are a permissible use in the zone. The maximum floor space ratio for the site is 1.5:1 pursuant to cl 4.4 MLEP 2011.
3. At the heart of the principal debate in this case is cl 6.13 MLEP 2011 which provides: (1) The objective of this clause is to provide for limited residential development in association with non-residential uses permitted in Zone B7 Business Park, including small scale live-work enterprises, to assist in the revitalisation of employment areas and to provide a transition between adjoining land use zones. (2) This clause applies' to land in Zone B7 Business Park. (3) Development consent must not be granted to development for the purpose of a dwelling or a residential flat building on land to which this clause applies unless the consent authority is satisfied that (a) the development is part of a mixed use development that includes a non-residential use permitted in Zone B 7 Business Park, and (b) no part of the ground floor of the building fronts a street will be used for residential purposes (excluding access, car parking and waste storage), and (c) not less than 60% of the total gross floor area of the building will be used for non-residential purposes, and. (Emphasis added)
4. Subclause 6.13(3)(c) is emphasised because no issue was raised in relation to the requirements of subcll 6.13(3)(a) and (b). The Approved Development complies with the 60% non-residential requirement in subcl 6.13(3)(c). The proposal, if approved, would mean the building comprised only 24.6% non-residential purposes.
5. Division I of Part 2 of State Environmental Planning Policy - Affordable Rental Housing 2009 (ARH SEPP) deals with in-fill affordable housing. Clause 10 of the ARH SEPP relevantly provides: 10 Development to which Division applies (1) This Division applies to development for the purposes of dual occupancies, multi dwelling housing or residential flat buildings if- (a) the development concerned is permitted with consent under another environmental planning instrument, and
6. Clause 13 of the ARH SEPP deals with floor space ratios and relevantly provides: (1) This clause applies to development to which this Division applies if the percentage of the gross floor area of the development that is to be used for the purposes of affordable housing is at least 20 per cent. (2) The maximum floor space ratio for the development to which this clause applies is the existing maximum floor space ratio for any form of residential accommodation permitted on the land on which the development is to occur, Plus (a) if the existing maximum floor space ratio is 2.5: I or less- (i) 0.5: I - if the percentage of the gross floor area of the development that is used for affordable housing is 50 per cent or higher, or
7. Clause 13 of the ARH SEPP applied to the RFB component of the development when the Approved Development was granted consent. Clause 13(1) was satisfied because 100% of the residential component of that development (the "development to which this clause applies") was to be used for affordable housing.
8. The maximum floor space ratio under the MLEP 2011 for the site was 1.5:1. Accordingly, with an FSR of 1.5:1, the maximum residential component permissible was 0.6:1, whether treating cl 6.13(3)(c) as a development standard or a prohibition. To this was added the bonus 0.5: 1 available under the ARH SEPP. Accordingly, the maximum floor space ratio for the residential component of the Approved Development, construing the EPIs together, was 1.1:1 (being 40% of 1.5:1 or 0.6:1 under the MLEP 2011, plus 0.5:1 under the ARH SEPP).
9. This gave rise to an inconsistency between the ARH SEPP and the floor space control in cl 6.3(2)(c) of MLEP 2011. The requirement for 60% of the total gross floor area of the building to be used for non-residential purposes was in direct conflict with the ARH SEPP, for the reasons set out above. The ARH SEPP contains cl 8: If there is an inconsistency between this Policy and any other environmental planning instrument, whether made before or after the commencement of this Policy, this Policy prevails to the extent of the inconsistency.
10. Section 3.28 of the EP&A Act also provides: (1) In the event of an inconsistency between environmental planning instruments and unless otherwise provided- (a) there is a general presumption that a State environmental planning policy prevails over a local environmental plan or other instrument made before or after that State environmental planning policy, and…
11. MLEP 2011 contains cl 1.9(1) which provides: (1) This Plan is subject to the provisions of any State environmental planning policy that prevails over this Plan as provided by section 3.28 of the Act.
12. ARH SEPP prevails over MLEP 2011 to the extent of the inconsistency in floor space limits and a development with residential FSR of up to 1.1:1 and commercial of up to 0.9:1 is permissible with consent. The Court's decision on 8 April 2020 to grant consent to the Approved Development embraced this reasoning.
13. The Approved Development provided for floor space consistent with the maxima permissible - 1.1:1 for residential and 0.9:1 for non-residential. There was compliance with both the maximum overall floor space ratio and the "not less than 60%" proviso in cl 6.13 of MLEP 2011. The proposal now would reduce the non-residential component of the building to significantly less than 60% of the gross floor area of the building.
14. It follows that development consent can only be granted first if cl 6.13(3)(c) is a development standard to which the provisions of cl 4.6 apply. Subclause 4.6(2) provides that: (2) Development consent may, subject to this clause, be granted for development even though the development would contravene a development standard imposed by this or any other environmental planning instrument. However, this clause does not apply to a development standard that is expressly excluded from the operation of this clause.
15. Clause 6.13 is not expressly excluded from the operation of cl 4.6.

The Contentions

1. There were a number of issues which were resolved prior to the hearing which related to the form of the building and the proposed residential accommodation. The issues remaining are summarised as: 1. What is the proper characterisation of the DA? 2. Is cl 6.13 of MLEP 2011 a development standard or a prohibition? 3. If cl 6.13 MLEP 2011 is a development standard is the objection pursuant to cl 4.6 properly made out? 4. If consent is to be granted should there be any contributions required pursuant to s 7.11 of the EP&A Act?
2. Expert evidence in planning was given by Ms K Bartlett retained by the Applicant and Mr G Hugo an employee of the Council. They also gave oral evidence. Their evidence was limited to the questions which arise when dealing with the cl 4.6 objection. I will address their evidence when dealing with that issue.
3. I will first deal with the proper characterisation of the development application, then the development standard or prohibition question and finally the cl 4.6 objection. It will not be necessary to deal with the contributions question.

The Development Application

1. It was only very shortly prior to the hearing that the parties realised that they had each characterised the DA in different ways. Whilst the issue only then became apparent, there was no need for additional evidence, and it was a matter for submissions. The parties' efficiency also meant that no additional hearing time beyond that which was allocated was required.
2. The Council characterised the DA as a form of amending development application - the development proposed being limited to changes to the building and uses approved by the Consent. On the other hand, the Applicant characterised the DA as seeking development consent for the whole of the building, including that which has already been approved (and upon the grant of a new consent the earlier consent would be surrendered). The Council submitted that the difference in characterisation was critical because of the provisions of cl 6.13 of MLEP 2011 - on its characterisation the DA proposes no non-residential use.
3. On or about 25 May 2020 the Applicant lodged a development application form (DA form) and accompanying documents. The "Company Name" was noted on the DA form as "Australian Village No. 12 - Gladstone St Pty Ltd C/- Mecone NSW Pty Ltd. Mecone is a company which, inter alia, provides consulting planning services. The email address and other contact details were those of an employee of Mecone.
4. The DA form includes a section headed "Proposal" which is necessary to set out in full: "Addendum DA relating to Approved DA Consent DA201900242 The proposed amendments, include the following: Basement • Revision of the parking layout to accommodate additional accessible parking • Revision of apartment storage units in line with additional residential units Ground • Façade glazing of commercial units 3, 4 & 5 moved out towards Gladstone St by approximately 950mm to correspond with the increase in floor area of each unit; Level 1 • Conversion of all commercial units on level 1 into 3 x 1 bedroom and 8 x 2 bedroom affordable housing units; • Reduction of the façade line of the previously approved commercial units 10, 12 & 15 to align with level 2 façade resulting in reduced GFA on level 1; Level 3 • Studio and 1 x 3 bedroom unit converted 3 x 1 bedroom affordable housing units; • Planter box added to corridor between units 27 and 29; Roof level • Addition of new roof access hatches, and • Addition of new skylights and openings to planter boxes on level 3; • The resultant amendments would result in a development a mixed use development with ground floor creative commercial spaces and 32 x community housing dwellings above."
5. That description is consistent with the Council's characterisation as a development application for development the effect of which is to amend an earlier development consent.
6. In the "Cost of Works" part of the DA form the following is stated: "The cost of works of the development is $330,000 (inc GST) (Includes GST and all costs associated with the demolition and construction)"
7. It is common ground that the cost of works estimated on the DA form can only be the cost of the "amending" works. The cost of demolition and construction of the whole of the building significantly exceeds that sum.
8. The DA form also requires a list of the "Documentation" which accompanies the development application. It is not necessary to set out the whole list, but there are a number of documents dated May 2020 which were clearly prepared for the purposes of this development application. Those documents include the "Statement of Environmental Effects, Architectural plans, SEPP 65 Verification Statement, Clause 4.6 Variation, BASIX, Photomontage".
9. There are also listed documents which were prepared in 2016 and 2019 which accompanied the development application which led to the Consent for the Approved Development. These documents include "Traffic and Parking Assessment, Stormwater Plan, Heritage Impact Statement, BCA Assessment report". Clearly these documents related to the proposed development of demolition and construction of the building as a whole, admittedly in its earlier manifestation.
10. The Statement of Environmental Effects (SEE) accompanying the DA was prepared by Mecone. The Executive Summary of the SEE includes the following: "…supports a development application (DA)...for a mixed use development with ground floor creative commercial spaces and 32 x community housing dwellings above… This SEE incorporates amendments to the Development Consent DA 201900242 approved by the Land and Environment Court (LEC) on the 19 (sic) March 2020. The proposed amendments…include the following:" [Thereafter the amendments set out at [29] above were identified.]
11. In Section 4 of the SEE under the heading "Proposal" there is a summary of the proposed development. The summary includes: "…the proposed development will comprise the following: • Demolition of the existing building; and • Construction of a four (4) storey with basement and mixed-use development."
12. There follows a description of the components of the whole of the proposed building.
13. The Clause 4.6 Variation request also prepared by Mecone refers to the the demolition and the construction of whole of the building as the proposed development.
14. The architectural plans which accompanied the development application include identification of the approved development, what is to be demolished and "Proposed Changes". The demolition appears to include elements of level 1 which have been approved by the Consent, but are not constructed. The "Proposed Changes" are in essence the same as the "amendments" summarised in the form of development application and the Executive Summary of the SEE and set out at [23] above.
15. By virtue of cl 50 of the Environmental Planning and Assessment Regulation 2000 (EP&A Regulation), a development application must be lodged on the NSW planning portal. The Applicant did so by the completion of the on line form provided by the Portal for that purpose. The development was described on that document as: "...for the demolition of the existing building on site and construction of a mixed use development with ground level creative commercial spaces and 32 x community housing dwellings above at 2-2A Gladstone Street, Newtown."
16. The Applicant also identified on the portal the estimated cost of the development as $15,359,410.
17. Subclause 50(9) of the EP&A Regulation should be noted because it informs what then occurred: (9) A development application is taken not to have been lodged until the fees notified to the applicant by means of the NSW planning portal have been paid.
18. It appears that the procedure for lodging a development application is that it is done so on the portal at which time it is forwarded through the portal mechanism to the relevant consent authority, usually a council. No fee is paid at the time of lodgement on the portal. The council then, through the portal, informs the applicant for development consent of the fee to be paid. Once the fee is paid, the development application is taken to have been lodged.
19. Communication between representatives of the Council and the Applicant ensued after the development application documents were lodged on the portal. I infer that Mr M Amy of the Council telephoned Ms C Firman of Mecone on 20 May 2020 to discuss the development application and the relevant fees to be paid. Ms Firman confirmed in an email at 2.38pm on 20 May 2020 in the following terms: "Hi Martin, Thank you kindly for your call. As discussed, I seek the amendment to the cost of works that I previously misquoted. The original DA which involved the overall construction (which has been approved) cost approx. $15 million. The proposed cost of works for this DA2020/0366 consists of a change of use to residential 11 dwellings is $330,000. Please let me know if you need me to update the application form. Kind regards, Camilla"
20. Mr Amy replied the following day at 1.28pm: "Hi Camilla, Just in (sic) update, I am looking into it. For starters you will need an updated DA Form to reflect proposal. I'll be in touch if more is required. Martin Amy"
21. On 25 May 2020 at 10.59am Ms Firman replied: "Hi Martin, Thank you for your email. Please find attached the updated application form with amended Cost of works of $330,000. I have also re-attached the Owners Consent. Please don't hesitate to contact me if you have any questions. Kind regards, Camilla"
22. Neither party tendered the "updated application form". It was submitted by the Applicant that the form I summarised at [28]-[34] above was the form accompanying this email. I do not accept that. The more likely explanation is that it is a "corrected" version of the document lodged on the portal referred to at [40] and [41] above. Ms Firman makes no mention in her email of changing the description of the development in the resubmitted form, and it would be inconsistent with the subsequence email exchanges.
23. A little over a week later on 2 June 2020 at 8.59am Ms Firman replied: "Hi Camilla, I've started processing it based on the new description. The initial invoice will be cancelled and a new invoice created based on the amended estimated cost of works. This will be sent shortly to the applicant. Thanks."
24. Shortly thereafter at 9.11am Mr Amy emailed again: "Hi Camilla, Apologies, I forgot to include the description. Can you confirm that below will satisfy the details included on the form? Please edit, though bear in mind that the description needs to be 'general' and solely on what is proposed. Thanks. 'Amending' DA to DA201900242. Amendments include internal and external design changes and, changes of commercial uses to residential."
25. Ms Firman responded promptly at 9.42am on 2 June 2020: "Hi Martin, Thank you for your email. The description below looks good. Kind regards, Camilla" ["Below" refers to the description in Mr Amy's email at 9.11am, given that in the way of email chains the later email appears above the previous one.]
26. I infer that the alterations are to the form lodged on the portal. Both the description of the development (short form) and the cost of the development were to be changed from the short form description of the whole of the demolition and construction, and the cost in excess of $15m. It is the form lodged on the portal which generates the determination by the Council of the fee to be paid to the Council. That was the critical document as far as Mr Amy was concerned.
27. It is plain that, entirely conventionally, Mecone was the agent of the Applicant for the purposes of making the development application to the Council. Ms Firman was at all relevant times the employee within Mecone with responsibility for the development application. There was no suggestion made by the Applicant that Ms Firman acted without authority, or that her communications should not be treated as the communications of the Applicant.
28. On 1 July 2020 the Applicant paid the sum of $1,141 to the Council which is described in the receipt issued by the Council as: "Account 309702 Application 'Amending' DA to DA201900242. Amendments ID 2016775"
29. Those are the essential facts from which the task is to determine the proper scope of the development the subject of the DA under appeal.
30. Each of the parties referred to the decision of Preston CJ in Gordon & Valich Pty Ltd v City of Sydney Council [2007] NSWLEC 780 (Gordon). In that case the Applicant described its development application as proposing "to amend the existing development consent". His Honour described the notion of amending a consent as a misdescription and said at [15] and following: "15 At the outset, it should be noted that the development application is inaccurate in its description of the development. I have said, the application sought to amend the existing development consent in certain ways. Under the Environmental Planning and Assessment Act 1979, a development application can only be made seeking consent for the carrying out of development: s 78A(1). 16 "Development" is a defined term: see s 4(1). It includes the use of land, the subdivision of land, the erection of a building, the carrying out of a work, and the demolition of a building or work. A development consent may be granted authorising the carrying out of development of one or more of these types. A development consent, however, is not itself development. The Environmental Planning and Assessment Act does not permit the lodging of a development application to amend a development consent; rather only to carry out development of one or more of the types falling within the definition of development (see s 78A(2)). 17 Of course, if development consent is granted for the carrying out of development as defined, a condition of consent for that development may be able to be imposed requiring the modification or surrender of an earlier development consent: see s 80(1)(b) and (5). It may also be that even without a formal condition requiring modification, the grant of and the carrying out in accordance with another development consent may have such a consequence. In either case, this might be a consequence but it would not be the purpose of the development consent. 18 In this case, the application clearly does propose the carrying out of development notwithstanding the description of the development as being the amendment of the existing development consent. It proposes the carrying out of works, the erection of a building, and the subsequent use of land. If development consent were to be granted for the carrying out of these various types of development, a condition of consent could be imposed under s 80A(1) which might modify any earlier development consent, including the consent in question in this case. However, as I have noted, this would be the consequence but not the direct purpose of the development application. 19 The misdescription in the development application of the development as being the amendment of the existing development consent does not necessarily mean that the development application is incompetent. The fact that somebody describes development in a particular way does not necessarily lead to invalidity; one looks to substance not form. The important point is to understand what is the particular development that is being proposed and that can be understood by looking at the particular plans accompanying the development application."
31. His Honour emphasises that the question is one of substance over form. A description itself does not necessarily determine the scope of a development application. The description may be wrong, and it is important to identify the actual development which is proposed by reference to the plans of the development and potentially other supporting documents.
32. The Applicant submitted that the description by Ms Firman is in error and that a proper understanding of the plans the subject of the application demonstrate that the development the subject of the DA is the whole of the building. The Applicant also pointed to a number of the supporting documents which refer to the whole of the building as the development.
33. The Council submits that Mr Firman was correct and consistent with a proper reading of the plans. The Council points to the reference on the plans to "approved DA", "demolition" and "Proposed changes" as critical. It also points out that one plan showed the demolition of that which was approved by the Consent, although it had not yet been constructed, demonstrating that the scope of the DA was building work as a consequence of which the development the subject of the Consent would be altered. The Council submits, consistently with that which Preston CJ said in Gordon the procedure is lawful and a condition could be imposed if consent be granted requiring the amendment of the Consent already granted.
34. In my view, the Council's submissions should be accepted. The analysis must start with the plans in respect of which consent was sought when the development application was deemed to have been lodged by payment of the fees on 1 July 2020.
35. Whilst not brimming with clarity, the better view is that the plans identify that the development proposed is the changes to the approved development rather than the whole of the proposed development. The plans identify what was the approved development. The plans then show that which is to be changed - that is the language used - "Proposed changes". That means in my opinion that something which exists is to be changed by the new work which is proposed.
36. Whilst it is not unknown that architectural plans for an entirely new development may show or overlay a development which has already been approved, that is done for comparison purposes, and is clearly shown as such. The plans here do not demonstrate a comparison between that which has been approved and that which is proposed. The plans do not identify differences between what has been approved and what is proposed, rather the plans show how that which has been approved is to be changed. The approved development is to be changed, not replaced.
37. That conclusion is reinforced by plan DA075A which is described as the Level 1 demolition plan. That plan shows the extent of "demolition" of that which has been approved on that level. That is, it is a clear demonstration of how some of the development the subject of the new development application includes changes to the approved level 1 layout. It is the clearest indication that the development now proposed changes the approved development, rather than replaces it with an entirely new comprehensive development application for the whole of the proposed development.
38. The Applicant urged that I consider the whole of the material in support of the development application, including, in particular, the documents which considered the whole of the building in their assessment of impacts. That material is however equivocal as to the proper characterisation of the development application. It is logical that the assessment of an "amending" development application include an analysis of the whole of the development after it is proposed to be "amended". Preston CJ said as much in Gordon at [21]. There is nothing in that supporting documentation which alters the conclusion I have drawn from an analysis of the plans.
39. It is appropriate to add that the description of the development the subject of the DA suggested by the Council and adopted on behalf of the Applicant by Mr Firman of Mecone is not necessarily a misdescription. It can be read, consistently with the DA form and Executive Summary of the SEE (see [29] and [35] above), as the identification of the development the subject of the DA identifying the consequence that there is an amendment to the development the subject of the Consent.
40. For the foregoing reasons, in my view the proper characterisation of the DA is that it seeks approval for the identified works and use which results in an amendment to the Approved Development and the need, if the DA is approved, to modify the earlier Consent.

Prohibition or development standard?

1. Clause 6.13 of MLEP 2011 is set out in full at [10] above) but the relevant subcl should be observed: (3)...development consent must not be granted unless the consent authority is satisfied that- … (c) not less than 60% of the total gross floor area of the building will be used for non-residential purposes, and.
2. The proposed development does not comply with the 60% requirement, in that less than 60% of the total gross floor area of the building will be used for non-residential purposes. The Applicant relies on an objection pursuant to cl 4.6 of MLEP 2011 to overcome the requirement of cl 6.13(3)(c).
3. It should be noted that cl 4.6 of MLEP 2011 does not exclude cl 6.13 from its operation. In order, however, for cl 4.6 to apply, the provision must be a development standard and not a prohibition.
4. The Council submitted that the subclause amounted to a prohibition because of the use of the phrase "must not be granted" in what is a "stand alone" clause, and the common use of that phrase throughout the instrument to the same effect.
5. The Applicant submitted that the proper analysis to adopt the "two step" approach is derived from Strathfield Municipal Council v Poynting (2001) 116 LGERA 319; [2001] NSWCA 270 (Poynting). It submitted that the first step is that a mixed-use development is not prohibited under any circumstances, and that the mix of use reflects the manner of carrying out the development - the provision specifies a requirement in respect of an aspect of the development. Accordingly, the Applicant submits that the provision is a development standard and cl 4.6 of MLEP 2011 applies to it.
6. The Applicant's submissions should be accepted.
7. Development standard is defined in the EP&A Act as follows: development standards means provisions of an environmental planning instrument or the regulations in relation to the carrying out of development, being provisions by or under which requirements are specified or standards are fixed in respect of any aspect of that development, …
8. In Principal Healthcare Finance Pty Ltd v Ryde City Council (2016) 222 LGERA 212; [2016] NSWLEC 153 (Principal Healthcare), Robson J very helpfully analysed the authorities on the subject matter of determining whether a provision operates as a prohibition or is a development standard. Whilst at [76] decrying the failure of careful drafting which would avoid such debate, his Honour concluded that what is described as the 2-step approach in Poynting as defined by Jagot J in Laurence Browning Pty Ltd v Blue Mountains City Council [2006] NSWLEC 74 (Laurence Browning) was the preferred approach.
9. I agree. Those principles outlined in Laurence Browning at [26] are: "(1) The provision in question must be "seen as part of the environmental planning instrument as a whole" ( Poynting at 342 [94]). The "wider context" of the provision, as part of the instrument overall, should be considered in construing the provision ( Lowy v The Land and Environment Court of NSW & Others (2002) 123 LGERA 179 at 182 - 183 [2] per Mason P). (2) If a provision falls within one of the matters in sub-paras (a) to (o) of the definition of "development standard", that fact alone does not mean that the provision is thereby a development standard. The provision must be "in relation to the carrying out of development" and must fix requirements or standards in respect of an aspect of the development ( Poynting at 333 -334 [58]). (3) Although we must distinguish between a provision that is a development standard and a provision controlling development in some other way, the dichotomy between "regulation" and "prohibition" cannot replace the definition in the EPA Act. As this conceptual division "will bring finely divided decisions", "care must be taken lest form govern rather than substance" ( Poynting at 342 [93]). (4) A provision that prohibits the development under any circumstances controls development, but is not a development standard ( Poynting at 343 [96] and [98]). (5) If the provision does not prohibit the development under any circumstances and the development is permissible in the circumstances expressed in the provision (whether expressed positively or negatively), then "in most instances the provision will specify a requirement or fix a standard in respect of an aspect of the development". Hence: Control by complete prohibition on the development in question will not leave room for requirements or standards. But anything less than complete prohibition means that there can be the development in question, and provided the relevant aspect of the development is identified the control will be by imposition of a development standard. ( Poynting at 343 [98]). (6) It is necessary to identify the development in order to say whether the provision specifies a requirement or fixes a standard in respect of an aspect of the development ( Woollahra Municipal Council v Carr (1985) 62 LGRA 263 a 269-270 per McHugh JA and Poynting at 343 [97]). (7) An essential condition of the definition of "development standard" is that the "requirements specified or standards fixed in respect of any aspect of the development must be requirements or standards which, ex hypothesi, are external to the aspects of that development" ( Carr at 269 -270 per McHugh JA). (8) Hence, the key consideration in any debate over this second step (the question whether the provision specifies a requirement or fixes a standard in respect of an aspect of the development) is identifying a relevant aspect of the development. In this regard, the list of aspects of development in sub-paras (a) to (n) of the definition of "development standard" shows that "a broad view of what is an aspect of a development should be taken" (Poynting at 343 [99])."
10. I regard the application of the 2-step test relatively straightforward in this case.
11. The provision does not prohibit a mixed use development under any circumstances. The development for the purpose of office premises and residential flat buildings are permissible uses in the zoning table. The dictionary to MLEP 2011 defines 'mixed use' as a building or place comprising two or more different land uses. Whilst it is the fact that cl 6.13(3)(c) states that consent must not be granted to development for the purpose of a residential flat building on land to which the clause applies unless the consent authority is satisfied that not less than 60 per cent of the total gross floor area of the building will be used for non-residential purposes, when that provision is read as part of the LEP as a whole, it is not a prohibition on the erection of a building for the stated purpose on B7 land in any circumstances. The provision precludes development in particular cases but does not prohibit mixed use development on B7 land in all circumstances. That is the first step.
12. The second step is whether the minimum requirement of 60% non-residential use specifies a requirement or fixes a standard in respect of an aspect of the development. In my view it certainly does. The aspect of the development concerned is the proportion of the mix of uses within the development. It is a numerical requirement which clearly relates to the carrying out of the development.
13. The Council submission that the language of the provision alone leads to the conclusion it is a prohibition is not to the point. The substance of the provision must be fully understood and measured against the definition of development standard in the EP&A Act, having regard to how cases such as Poynting and Principal Healthcare approach that question of construction.
14. Accordingly, it follows in my view that the requirement in cl 6.13(3)(c) that not less than 60% of the total gross floor area of the building will be used for non-residential purposes is a development standard.

The clause 4.6 objection

1. Having determined that the provision is a development standard and the provisions of cl 4.6 MLEP 2011 apply, the development can be approved but only in accordance with the relevant provisions: (3) Development consent must not be granted for development that contravenes a development standard unless the consent authority has considered a written request from the applicant that seeks to justify the contravention of the development standard by demonstrating: (a) that compliance with the development standard is unreasonable or unnecessary in the circumstances of the case, and (b) that there are sufficient environmental planning grounds to justify contravening the development standard. (4) Development consent must not be granted for development that contravenes a development standard unless: (a) the consent authority is satisfied that: (i) the applicant's written request has adequately addressed the matters required to be demonstrated by subclause (3), and (ii) the proposed development will be in the public interest because it is consistent with the objectives of the particular standard and the objectives for development within the zone in which the development is proposed to be carried out, and (b) the concurrence of the Secretary has been obtained.
2. In order for there to be power to grant development consent for a development that contravenes a development standard, cl 4.6(4)(a) requires that the Court, in exercising the functions of the consent authority, be satisfied that:

• The written request adequately demonstrates that compliance with the development standard is unreasonable or unnecessary in the circumstances of the case (cl 4.6(3)(a) and cl 4.6(4)(a)(i)),
• The written request adequately establishes sufficient environmental planning grounds to justify contravening the development standard (cl 4.6(3)(b) and cl 4.6(4)(a)(i)),
• The proposed development will be in the public interest because it is consistent with the objectives of the zone (cl 4.6(4)(a)(ii)), and
• The proposed development will be in the public interest because it is consistent with the objectives of the standard in question (cl 4.6(4)(a)(ii)). (Initial Action Pty Ltd v Woollahra Municipal Council (2008) 236 LGERA 256; [2018] NSWLEC 118 (Initial Action))

1. The Court, in exercising the functions of the consent authority, must "in fact" be satisfied of the above matters (Rebel MH Neutral Bay Pty Limited v North Sydney Council [2019] NSWCA 130). The state of satisfaction that compliance is "unreasonable or unnecessary" and that there are "sufficient environmental planning grounds" to justify the contravention (the first two dot points above) must be reached only by reference to the written request (cl 4.6 objection). Whilst the evidence in the proceedings can assist in understanding the request and in considering the adequacy of the cl 4.6 objection, it cannot supplement what is in the cl 4.6 objection.
2. On the other hand, the state of satisfaction that the proposed development is in the public interest, because it is consistent with the objectives of the standard and of the zone, (the last two dot points above) can be reached by considering the evidence before the Court, without being limited to what is contained in the cl 4.6 objection.
3. A further precondition in cl 4.6(4), which must be satisfied before the power can be exercised to grant development consent for development that contravenes a development standard, is that the concurrence of the Secretary has been obtained. The Secretary's concurrence can be assumed as a result of written notice dated 21 February 2018 attached to the Planning Circular PS 18-003 (Initial Action at [28]).
4. The common ways in which an applicant might demonstrate that compliance with a development standard is unreasonable or unnecessary are summarised by Preston CJ in Wehbe v Pittwater Council (2007) 156 LGERA 446; [2007] NSWLEC 827 at [42]-[51] (Wehbe) and repeated in Initial Action at [17]-[21]. Although Wehbe concerned a State Environmental Planning Policy No 1 - Development Standards objection, the common ways to demonstrate that compliance with a development standard is unreasonable or unnecessary in Wehbe are equally applicable to cl 4.6 (Initial Action at [16]): 1. the objectives of the development standard are achieved notwithstanding non-compliance with the standard; 2. the underlying objective or purpose of the development standard is not relevant to the development, so that compliance is unnecessary; 3. the underlying objective or purpose would be defeated or thwarted if compliance was required, so that compliance is unreasonable; 4. the development standard has been abandoned by the council; 5. the zoning of the site was unreasonable or inappropriate so that the development standard was also unreasonable or unnecessary (note this is a limited way of establishing that compliance is not necessary as it is not a way to effect general planning changes as an alternative to strategic planning powers).
5. The five ways to demonstrate compliance is unreasonable or unnecessary are not exhaustive, and it may be sufficient to establish only one way (Initial Action at [22]).
6. The cl 4.6 objection was prepared by Ms K Bartlett, the planning expert retained by the Applicant. The objection proceeds on the assumption that the DA is properly characterised as for the whole building rather than as an 'amending' development application, which I have already determined. That does not mean that the cl 4.6 objection cannot be considered having regard to the proper characterisation of the DA.
7. This is so because of the provision of cl 6.13(3)(c) itself. It became common ground that the word "building" in the subclause - "not less than 60% of the total gross floor area of the building will be used for non-residential purposes" - refers to the whole of the building, not only that part of the building in respect of which the DA has been made (noting that "building" can mean part of a building).
8. The cl 4.6 objection relies upon the first of the Wehbe methods for demonstrating that compliance with the standard is unreasonable or unnecessary - that the proposal satisfies the objectives of the standard notwithstanding the non-compliance. The objectives of the standard are those identified in the clause and having 3 elements:

• limited residential development in association with non-residential uses;
• assist in the revitalisation of employment areas;
• provide a transition between adjoining land uses.

1. In relation to the first objective the cl 4.6 objection in summary states:

• A compliant scheme could deliver approximately 21 units and the additional 10 proposed represents only 'limited' additional residential buildings;
• The proposed dwellings are for supportive accommodation, which will be secure accommodation for those persons targeted who are being assisted to rejoin the workforce and so can assist in revitalisation of the employment area;
• The site is ideal for this type of accommodation;
• It is a mixed-use development and the dwellings will be used as supportive accommodation for 25 years;
• There is no planning justification for the 60/40 non-residential/residential split for the zone, or why it is reasonable or necessary in this location to meet the objectives of the clause;
• The proposed split (25/75) is based on a number of key planning merit principles:
• ground floor is for non-residential uses for creative industries in accordance with cl 6.12 of MLEP 2011 and because the ground floor uses have the best opportunity for activation;
• the supportive accommodation above has employment benefits because those residing will be in close proximity to employment opportunities;
• less intensive uses above (all residential rather than partly non-residential) is a better transition between the subject site and surrounding zones which are primarily residential.

1. The second objective of the standard - assist in the revitalisation of employment areas - is addressed as follows: "The proposed development assists in the revitalisation of employment areas in two ways. Firstly, the provision of 534sqm of commercial creative floorspace will contribute to the desire to improve local creative industries in and around the site. Secondly, the residents who will be living the affordable housing dwellings will be supported to re-enter the local work force through employment or training (which also supports employment areas from the training jobs). The residents living in this development will also be seeking employment (many for the first time in years), which will also assist in the revitalisation of the local employment area."
2. The third objective of the standard is addressed as follows: "As noted in the SEE, the subject site directly adjoins a R4 High Density residential zone, with residential accommodation surrounding it on all three frontages along with some business development (B5) zoned land (refer Figure 1 below). It should be noted that under Clause 6.16 of the MLEP, the land at 76 Wilford St Newtown (refer to Figure 1 below) [reproduced above at [7] is permitted a 70% residential allocation. It appears somewhat arbitrary that the land adjoining the site can have 70% residential land uses, compared to a maximum 40% for the subject site given the diversity of land uses and zones in the area. In addition, a number of the surrounding and directly adjacent sites have been rezoned to R4 (or existing R2) that can have 100% residential uses As such, the development and its proposed mix of uses enables an appropriate transition between the largely residential surrounds, while also providing local creative commercial tenancies at ground floor, which can assist with revitalisation of the area. Further, the model enables the new residents to be supported to enter the local workforce, either through training or new employment roles in SGCH's 'supportive accommodation' model. Given the large number of surrounding zones including R4 High Density Residential, R2 low density residential, B5 Business Development and B2 Local Centre, the proposed development offers a modest and complementary transition between these zones by providing both creative commercial and supportive accommodation models that will assist with the many zone transitions surrounding the site. This is particularly relevant given the area is clearly in a land use transition, and the supportive accommodation model will be in place for 25 years."
3. The "sufficient environmental planning grounds" in the cl 4.6 objection are said to be:

• The shortfall in commercial floorspace will still meet the objectives of the clause and the zone;
• Properly calculated the numerical breach is not excessive;
• There is a significant demand for affordable housing in NSW and the proposal provides the lengthier period of 25 years to assist in meeting that demand;
• The proposal will provide much needed social and affordable housing for the proposed demographic of older women and women experiencing domestic violence for 25 years;
• The supportive accommodation is an economic and social driver because the proposal provides an integrated housing model that supports populations that often find difficulty in entering (or re-entering) the workforce;
• The supportive accommodation model strongly aligns with the intention of revitalisation of employment areas by assisting these disadvantaged populations back into the workforce in a live-work style of accommodation;
• The development, through the supportive accommodation model, will fundamentally drive revitalisation of employment for a vulnerable group not often able to access it, in a manner that provides an appropriate transition to the surrounding residential development.
• Delivery of this type of accommodation is consistent with key regional and state strategic and statutory planning provisions;
• The location is ideal for the specific combination of residential and employment/service uses;
• The site does not form part of a consistent or large B7 zone - compared to around Victoria Road and the Sydenham Area for example. Rather, it is a series of different zones for almost every different block of land and is clearly in transition. This is relevant to the fact that, while the subject site will deliver 'supportive accommodation' for 25 years before potentially reverting to a traditional RFB, it is highly likely that this precinct will have transitioned to a completely different zoning regime given the surrounding social, economic and demographic changes. This is reflected by the fact that Council recommended to the proponent to submit a Planning Proposal to change the land zoning to a more traditional mixed use zone in late 2019/early 2020. No justification has been provided as to why 76 Wilford Street can have up to 70% residential, yet the subject site (which adjoins) can only have 40%. The particular zoning circumstances of the site, with significant surrounding residential land uses provides a sufficient environmental planning ground to justify varying the proposed 60/40 non-residential to residential land use split.
• In contrast the mix of uses has been chosen, after careful consideration of the objectives of the Clause and Zone to encourage and support employment uses, combined with limited residential development, while also providing an appropriate transition to the significant surrounding residential uses.

1. The cl 4.6 objection then turns to the two aspects of public interest concerning consistency with the objectives of the standard and of the zone. The objection relies upon without needing to repeat the reasons earlier stated for compliance with the objectives of the standard. In relation to the zone objectives the cl 4.6 objection relevantly provides: "To provide a range of office and light industrial uses. The proposal provides 534sqm of creative commercial floor space, which complies with this objective. The provision of 534sqm is consistent with the intent of the Clause due to the site's environmental planning conditions and the under provision of commercial floor area does not compromise the Objectives of the standard or zone. To encourage employment opportunities. The proposal includes ground and first floor commercial creative spaces [sic, but is incorrect] to deliver complementary local services and employment opportunities for the community and tenants. The subject site is located in close proximity to a number of education services including TAFE and employment services and hubs. Bus stops are located along Enmore Road and King Street providing regular services. Newtown Train Station, located approximately 400 metres from the subject site, provides rail services on the Inner West & Leppington, Bankstown and Olympic Park Lines. The location of the development in relation to Newtown train Station advances the intensification of residential development close to rapid transport, supporting the vision of a "30 minute city" as described within The Eastern City District Plan which aims to provide access to a greater network of services and opportunities. To enable other land uses that provide facilities or services to meet the day to day needs of workers in the area. The location of the proposed development will support the continued operation of the neighbourhood shops and commercial creative spaces located in close proximity to the site. The proposed creative commercial spaces will enable a wider range of land uses to provide facilities or services to meet the day to day needs of workers in the area. To provide for limited residential development in conjunction with permissible active ground floor uses. The proposal includes ground floor commercial creative spaces which promote street activation. The proposed 'supportive accommodation' services promotes the orderly and economic use which serves a difference (sic) purpose to an owner-occupied residential use. The breach results in approximately an additional 10 supportive accommodation units, which is still limited residential accommodation that is fundamentally designed to assist long-term unemployed people into the workforce through steady housing and training and assistance. To provide business and office premises for the purposes of certain art, technology, production and design sectors. The proposal's commercial space will accommodate businesses in the sectors of art, technology, production or design, and this can be guaranteed through appropriate conditions of consent."
2. The Court is limited to consideration of the cl 4.6 objection in relation to satisfaction the application of the standard being unreasonable or unnecessary and the sufficient environmental planning grounds (cl 4.6(3)). Evidence more broadly can address the public interest requirements of consistency with the objectives of the standard and of the zone. Ms Bartlett and Mr Hugo prepared a joint report but were not required to give oral evidence on the consideration of the cl 4.6 objection, save for some short explanatory evidence about other B7 zones in the local government area.

• the focus is upon the non-residential/residential mix, rather than the actual amount of non-residential use floor area;
• Notwithstanding that approximately 75% of the gross floor area will be used for residential purposes, it may still be said that residential development has been limited;
• It is the residential component which is the tool by which the outcomes of revitalisation and transition are achieved. The adjoining land use zones are, in this particular case, generally densely residential and the proposed percentage mix on the subject site is more likely to bring the required transition, which is a purpose of the limited residential development. The additional residential component will revitalise the B7 zone because it will promote use of the area outside office hours and will complement and give vibrancy to the commercial uses on the ground floor;
• The regulation of the residential density of the development should not be seen as the end to be achieved by sub-clause (3)(c), rather it is a means to achieve the goals identified in the objective, but not the only means to identify those goals. If it were otherwise, it would be impossible to make a successful cl 4.6 objection because the GFA mix for non-residential purposes was less than 60%;
• The supportive accommodation model, which provides both residential and non-residential needs, means that residents will be supported to re-enter workforce in the local area through the provision of stable accommodation and their occupation of the site will assist with compliance of the objective of cl 6.13;
• In circumstances where no particular planning justification is provided as to why a 60/40 split is reasonable or necessary in this location, the mix proposed by the Applicant achieves the objective and therefore justifies the contravention of the standard.

1. The Council submitted:

• The residential accommodation has not been limited because in this context "limited" means "some", a "reduced amount"; simply having a certain number or area is not 'limited" as required by the provisions;
• Displacing uses in commercial floorspace that generate employment by constructing residential development instead cannot be consistent with the objective to assist in the revitalisation of employment areas;
• The proposal does not encourage employment opportunities when it provides residential accommodation at the expense of space for commercial and light industry uses.

Consideration

1. I am considering the proposal on the basis of the characterisation of the DA which I have determined, that is, that it is an 'amending' development application, in that it is seeking development consent for the work and uses identified in [29] above. The consequence of approval of the DA would be that the earlier Consent will require modification, and the development which would ultimately be the subject of the two development consents is the development the subject of the earlier Consent as changed by the development the subject of the DA now under consideration.
2. Whilst the parties were at issue as to the proper characterisation of the DA, it remains the fact that the assessment of the DA will inevitably involve, at least in part, an examination of the whole of the proposed development, not simply the development the subject of the DA. This observation is of course subject to any specific provisions of MLEP 2011 or the ARH SEPP. It should not be forgotten that the development the subject of the DA is not simply the change of use on level 1 from non-residential to residential. There are also, albeit minor, changes to the design of the building, the layout of level 3 and the roof, storage and basement layout.
3. Clause 6.13 of MLEP 2011 directs attention in my opinion to the development in its ultimate form comprised of, in this case, the development the subject of the earlier Consent and the development the subject of the DA. I agree with what became the common position of the parties that the "building" in cl 6.13(3)(c) here is to be regarded as the building as approved and proposed to be modified by this DA.
4. In terms of the cl 4.6 objection the only difference in approach would be the proportion of residential use to be considered. If the development the subject of the DA alone was considered then the residential use proposed is 100%, with obviously no non-residential use. Assuming it be correct that the proper consideration is the whole of the building then the proposed residential use is 75% or thereabouts (ignoring the "bonus" floor space by virtue of the ARH SEPP to which reference is made below). It is not appropriate to "plan by numbers" but to consider the terms of the development standard, the cl 4.6 objection and the evidence.
5. It should be said at the outset that the proposed use by the charity is a most laudable scheme. The provision of supported accommodation undoubtedly would meet a real demand and is socially desirable. What should not be forgotten however is that the Applicant is a commercially driven entity who has entered into a commercial arrangement with a charity who wishes to provide the accommodation. It is not a criticism of the Applicant, but rather simply a recognition that, as it is entitled and ought to do, the Applicant wishes to develop the Site for profit and has entered a commercial arrangement with a view to so doing.
6. The first objective addressed is that of "limited residential development in association with non-residential uses". I agree with the Council submission that "limited" in this context means "some" or a "reduced amount". Another way of saying it would be a limited amount. The Applicant simply submits that because there is a finite number of units then the residential development is limited. In my opinion that fails to give a proper meaning to the phrase in this context. The objective is that residential development is the minor element of a mixed use development - it is limited, rather than becoming the dominant element of the development.
7. Here the residential component has become the dominant component of the overall development, about 75% of the gross floor area is residential development. That calculation is on the basis that the 60/40 requirement only applies to the floor space permissible under MLEP 2011, and that the bonus available by virtue of the ARH SEPP is able to be utilised for residential development. (The percentage of residential development for the whole building including the bonus floor space is 82%, although that is not relevant.)
8. In my view the objective requires that the residential element not be the dominant element in the overall development and the proposed development does not meet that objective, treating the percentage mix as applying only to the floor space permissible by virtue of MLEP 2011. This does not mean that the 60/40 requirement is immutable, nor that a particular design could achieve the objective of the standard without compliance with the gross floor area split required. But here, a four storey building comprises three residential floors above the sole commercial level on the ground floor. This mix does not achieve the objective of the standard to limit residential development.
9. The Applicant says that there is no planning justification for the 60/40 non-residential/residential split for this location in this zone and points to other areas (and zones) where there are differing proportional splits. I do not accept that this of itself is a foundation for finding that the objective of the standard is met notwithstanding non-compliance. It is important to recognise that it is the objectives of the standard which are reflected in the standard, and that the notion of "limiting" residential development is reflected by the standard requiring a majority of the development to be non-residential. The other objectives of the standard are also evident by the setting of the numerical standard.
10. Whether this location is appropriate for these provisions of MLEP 2011 is not for me to decide, nor for me to find, that cl 6.13 should not be applied or the development standard ignored. In the absence of evidence, of which there is none, that the standard has been abandoned, I must consider and apply cl 6.13 and cl 4.6 in their respective terms.
11. The advantages of the proposed use and the proposition that it is an "ideal site" are not matters which establish that the objective to provide limited residential uses in association with non-residential uses is met.
12. The second objective of the standard is to assist in the revitalisation of employment areas. The Applicant says that the provision of residential accommodation for those who are seeking employment assists in the revitalisation because they will be provided with training and seeking employment. I agree with the Council evidence and submission that it is the provision of non-residential floor space which assists in revitalisation rather than the provision of residential accommodation. Clause 6.13 described zone B7 as being within an employment area. It is employment which is to be the factor for revitalising the area. Whilst those who come to live in an area will utilise services within the area, it is the provision of non-residential uses which are expected to be the employment generating factor, leading to revitalisation of the area.
13. If it was the residential component that was the driver for revitalisation then the residential component would not be required to be limited as an objective of the standard.
14. It follows that the provision of residential accommodation rather than non-residential floor space, by the mix of uses being dominated by residential uses, does not meet the objective of revitalisation of employment areas.
15. The third objective is to provide a transition between zones. I infer that this means that a development will not be wholly residential adjacent to an industrial use, nor will a development be wholly industrial use adjacent to a wholly residential use. Here the surrounding uses range from mixed use to largely residential. The mix proposed in the present proposal probably achieves a sense of transition and I would not have refused the DA on the basis of failing to meet this objective if it was the only issue.
16. I conclude therefore that the cl 4.6 objection does not demonstrate that the proposed development, properly construed as an 'amending' development application, meets the objectives of the standard in cl 6.13(3)(c), and therefore does not demonstrate that compliance with the development standard is unreasonable or unnecessary in the circumstances of the case. I so conclude on the assumption that the consideration required under cl 6.13 is of the development as proposed to be amended by this DA but ignoring the additional floor space permissible by virtue of the ARH SEPP.
17. That is sufficient to dispose of the appeal, but in deference to the parties and the evidence I shall deal shortly with the remainder of the cl 4.6 objection.
18. The environmental planning grounds set out at [93] above rely to a large extent on the nature of the proposed use for affordable housing for 25 years. Although the Council submitted that there was no power to impose a condition limiting the use to 'supportive housing' and for a period in excess of the period of ten years nominated in ARH SEPP, I would not have seen any difficulty in imposing such a condition if it was appropriate to grant development consent.
19. First, a time limited consent can be for any period which is appropriate to the development concerned. Periods can range from a single year for extended hours of an hotel, for example, to a number of decades for a coal mine. There is no limitation on the period of time which is imposed but it must relate to the development under consideration.
20. Second ARH SEPP does not impose a maximum period of time for housing to be the subject of management as affordable housing. It requires that there be a condition that it be so for 10 years. A condition which imposes the obligation for 25 years meets that requirement.
21. Third, the notion of 'supportive housing' is a concept known to planning law as it is used and defined in ARH SEPP.
22. I accept that the social benefit of the additional residential accommodation of the proposed development is a planning ground, but is not a sufficient planning ground to justify the non-compliance., largely because the residential component is not of itself an employment driver, which is the foundation of the zone and the standard. It is the non-residential floor space which is to achieve that goal.
23. Whilst there is some conjecture about the future zoning of the site and surrounds, there is not a sufficient degree of certainty that the zoning will change such that after the 25 years of affordable housing it is preferable that the development be a "traditional residential flat building". If that be the case then a development application to convert level 1 to a residential use can be made.
24. For the foregoing reasons the proposed development does not meet the zone objectives of encouraging employment opportunities or to limit residential development.

Conclusion

1. As required by cl 4.6(4) I am not satisfied that the cl 4.6 objection adequately addresses the matters required to be addressed by cl 4.6(3) and that the development will be in the public interest. I therefore do not have power to grant consent and the DA must be refused.
2. I make the following orders: 1. The appeal be dismissed. 2. Development application number DA/2020/0366 for development comprising the change of use of level 1 and minor alterations to the development approved by the development consent granted by the Court on 8 April 2020 to development application DA/2019/00242 (for demolition of existing buildings and construction of a mixed use development comprising ground and first floor level creative use commercial tenancies and 21 community housing dwellings and external open space with associated basement parking) at Lots 1 and 2 in Deposited Plan 208950 and Lots 1, 2 and 3 in Deposited Plan 6051 known as 2-2A Gladstone Street, Newtown is determined by refusal. 3. The exhibits, other than Exhibits A and 1 shall be returned.

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