BKA Architecture v Council of the City of Sydney

Background and proposal

1. On 23 November 2015, council approved development application D/2015/326 (Consent) for the "demolition of additions and outbuildings on the site, retention and adaptive reuse of the existing two storey heritage listed building known as the Duke of Wellington with a change of use from a pub to a shop at ground floor and change of use from a boarding house/hotel rooms to residential apartments at first floor, construction of a five storey residential flat building on the Wellington Street frontage and a two storey terrace on the George Street frontage and removal of four trees and landscaping works including a communal rooftop garden to the new five storey building on the land known as Lot 1 DP 71285 291, George Street, Waterloo" (site).
2. On 22 December 2015, the s96A Application was lodged with council. The application involved a number of internal and external changes, which are summarised in the Statement of Facts and Contentions (Exhibit 2). Some of these changes were approved and some refused by council on 31 March 2016. The main change that was refused by council, which remains in dispute between the parties involves the infilling of "void" space in approved units 2, 3 and 4 to provide three additional units 8, 9 and 10 (2x1 bedroom and 1x studio) and in Unit 1 to provide an additional bedroom.
3. On 4 May 2016, the s96B Application was lodged with council seeking to provide three additional attic bedrooms to units 5, 6 and 7 in the roof space of the exiting building and other changes, which are summarised in the Statement of Facts and Contentions (Exhibit 1). The additional bedroom and roof dormer to Unit 7 have been deleted. The other proposed dormer over Unit 5 has also been deleted and light and ventilation to Units 5 and 6 will be provided by in-plane skylights. The application remains undetermined by council.
4. A summary of the Consent and the two s96 applications is set out in the table below. Consent s96A Application s96B Application Combined s96A and s96B GFA (sqm) 1018 1096 1074 1127 FSR 1.746:1 1.88sqm 1.84:1 1.93:1 No. of Units 16 19 16 19 No of bedrooms 18 19 20 21 5xstudio 7xstudio 4xstudio 5xstudio Unit mix 9x1 bedroom 10x1 bedroom 8x1 bedroom 12x1 bedroom 2x2 bedroom 1x2 bedroom 4x2bedroom 2x2 bedroom

Site and locality

1. The site is located on the south eastern corner of Wellington Street and George Street. It is generally rectangular in shape with an area of 583sqm. It is developed with a two storey pub, known as the Duke of Wellington, which is now vacant.
2. The site is located in a predominantly residential area with two to three storey NSW Government housing blocks within landscaped settings. To the east and south east along Wellington Street and West Street are recent four to five storey residential flat buildings. A single storey commercial building is located to the north with 16 storey NSW Government housing towers beyond.

Statutory framework

1. The applications are made under s 96 of the EPA Act which relevantly provides: (2) Other modifications A consent authority may, on application being made by the applicant or any other person entitled to act on a consent granted by the consent authority and subject to and in accordance with the regulations, modify the consent if: (a) it is satisfied that the development to which the consent as modified relates is substantially the same development as the development for which consent was originally granted and before that consent as originally granted was modified (if at all), and (b) it has consulted with the relevant Minister, public authority or approval body (within the meaning of Division 5) in respect of a condition imposed as a requirement of a concurrence to the consent or in accordance with the general terms of an approval proposed to be granted by the approval body and that Minister, authority or body has not, within 21 days after being consulted, objected to the modification of that consent, and (c) it has notified the application in accordance with: (i) the regulations, if the regulations so require, or (ii) a development control plan, if the consent authority is a council that has made a development control plan that requires the notification or advertising of applications for modification of a development consent, and (d) it has considered any submissions made concerning the proposed modification within the period prescribed by the regulations or provided by the development control plan, as the case may be. Subsections (1) and (1A) do not apply to such a modification. (3) In determining an application for modification of a consent under this section, the consent authority must take into consideration such of the matters referred to in section 79C (1) as are of relevance to the development the subject of the application. (4) The modification of a development consent in accordance with this section is taken not to be the granting of development consent under this Part, but a reference in this or any other Act to a development consent includes a reference to a development consent as so modified.
2. Section 79C of the EPA Act provides: 79C Evaluation (1) Matters for consideration-general In determining a development application, a consent authority is to take into consideration such of the following matters as are of relevance to the development the subject of the development application: (a) the provisions of: (i) any environmental planning instrument, and ….. (iii) any development control plan, and
3. The site is within the R1 General Residential Zone under the LEP and the development is permissible with consent.
4. Under cl 4.3 and the Height Map of the LEP, the maximum height of a building on the site is 18m. Under cl 4.4 and the FSR Map, the maximum FSR is 1.75:1. The Consent complied with the maximum FSR but exceeded the maximum building height. The additional height above the standard resulted from the lift overrun and a pergola over the roof terrace. All gross floor area (GFA) was below the maximum building height. The Consent required an exemption to the height standard under cl 4.6 of the LEP. The s96 Applications will exceed the maximum FSR standard but, under s 96(4) of the EPA Act, a modification application is not the granting of development consent and consequently the parties agree that cl 4.6 does not apply.
5. The Duke of Wellington Hotel including interior is identified on Schedule 5 of the LEP as a heritage item (I2085). Clause 5.10(4) of the LEP requires that the effect of the proposed development on the heritage significance of the item must be considered.
6. Sydney Development Control Plan 2012 (DCP) includes objectives and provisions that are relevant to the contentions, including s3.9-Heritage.
7. State Environmental Planning Policy No 65 - Design Quality of Residential Apartment Development (SEPP) applies to the development. Clause 30(2) provides: 30 Standards that cannot be used as grounds to refuse development consent or modification of development consent …… (2) Development consent must not be granted if, in the opinion of the consent authority, the development or modification does not demonstrate that adequate regard has been given to: (a) the design quality principles, and (b) the objectives specified in the Apartment Design Guide for the relevant design criteria. …..

Evidence

1. A conciliation conference under s34 of the Land and Environment Court Act (LEC Act) commenced on site on 22 July 2016. The parties did not reach agreement and the conciliation conference was terminated on 14 October 2016 and the matter proceeded to a hearing under s34(4)(b)(i) held forthwith. The Parties agreed that the site view and the discussions in the s34 conciliation conference could be evidence in the proceedings. At the commencement of the proceedings, the applicant sought and was granted leave to rely on amended plans, which consolidated the modifications in both s96 Applications (Exhibit D).
2. A joint report was prepared by the planning experts, Mr A Darroch, for the applicant, and Ms E Murphy, for the council. Ms K Castellanos and Mr G Patch, for the applicant, and Mr T Smith, for the council prepared a joint report on the urban design and heritage contentions. The experts, other than Ms Castellanos, also provided oral evidence to the Court during the hearing on further amended plans (Exhibit F), for which leave was granted. These plans addressed issues in relation to heritage impacts of the modification applications raised by Mr Smith. Heritage
3. Mr Smith's key concern was the impact of providing attic bedrooms in the roof space of the existing hotel. His initial concerns about the proposed dormer windows were addressed by the deletion of these elements and their replacement with skylights that did not change the form of the roof. Mr Smith remained concerned about the removal of ceilings in Units 5 and 6 to provide stair access to the attic bedrooms. In his opinion, the ceilings were original fabric (1920s) and even if they were a later addition (1950s), they were detailed in a sympathetic manner to the original and were of significance. While some of the ceiling in Unit 5 was damaged this could easily be repaired. He acknowledged that the Consent approved the removal of all of the walls in the location of the proposed stairs, which would have necessitated the removal of the ceilings and cornices. He accepted that the detailing in the Exhibit F plans would achieve a better heritage outcome than the Consent. Although, this would be further improved if the proposed stairs to the attic were removed from the application.
4. Mr Patch considered that some of the upstairs ceilings was probably not original fabric and had been replaced in the 1950s when fire proofing work was undertaken. Furthermore, he considered the ceiling in Unit 5 had water damage and may require removal. He noted that the Conservation Works Report (Conservation Report) he prepared, and updated in July 2016, were "provisional" and that further work was required to assess the significance and condition of the ceilings. However, in his opinion, the proposed stairs to the attic were an appropriate change to the item that did not adversely affect its significance, particularly when compared to the Consent.
5. Both experts supported the detailing in the Exhibit F plans, which is unrelated to the modification application, but would conserve more original fabric and spaces than the Consent, particularly in the ground floor parlour and adjoining entrance stair/hall and the fireplaces. Mr Smith recommended that to better conserve the fireplace in unit 6, it should be a one bedroom unit (proposed 2 bedroom) and unit 5 should be a two bedroom unit (proposed 1 bedroom), thereby removing the requirement for a new door opening adjoining the fireplace, for which there is insufficient room without altering the fireplace. Mr Patch supported this amendment and the applicant filed amended plans which reflect this change on 21 October 2016. These are the plans which, if approved, would modify the Consent. Findings
6. The heritage listing for the Duke of Wellington Hotel includes its interiors and the Heritage Inventory Sheet (HIS) identifies that the "rooms on the first level are largely intact" and the Recommended Management includes that the "principal room layout and planning configuration as well as significant internal original features including ceilings, cornices, joinery, flooring and fireplaces should be retained and conserved". The Conservation Report identifies that the fibrous plaster ceilings have high significance and should be retained. Although, the Conservation Report - Internal Works states that the ceilings and cornices "can be retained to some areas where wall/cornice junction is to be maintained".
7. Whether the upstairs ceilings are original or a latter addition they contribute to the significance of the item and it is unlikely that, where there is damage, it could not be repaired. Consequently, the preferred conservation policy would be that the ceilings and cornices and the spacial arrangement of the rooms should be retained. However, the experts have agreed that the Consent, through the total removal of walls, effectively approved the removal of ceilings and cornices in the areas where the proposed stairs are to be located. Whereas, the detailing in the Exhibit F plans retains nib walls and "openings in the walls with lintels supporting the wall above the opening and allowing the original cornices to remain in place and interpret the original room configuration". The experts agree that this results in a better heritage outcome than that approved in the Consent.
8. Dr Smith, for the council, submits that the Court could approve the heritage works proposed in Exhibit F while not approving the stairs and attic rooms. However, I accept Mr Staunton's submission that this would result in an effective dismissal of the s96B application as the conservation works are included only on the basis of the approval of the increased GFA, and, if refused, the Consent can be implemented without the conservation works.
9. In accepting that the s96B application would better conserve the heritage significance of the item than the Consent, I note that it is of concern that the Heritage Impact Statement prepared for the original development application and the Conservation Report did not clearly identify the grading of significance of the interiors of the item to better manage the extent of change that could occur and that the Consent, which is only recent, is now found to not adequately maintain the interior of the item. Floor space ratio
10. The planning experts agree that the increase in FSR does not increase the envelope of the development but results from the infilling of the "voids" and the use of the roof space of the existing hotel for additional bedrooms. The proposed amendments do not increase the bulk or scale of the proposal, other than the additional balconies to units 1, 8, 9 and 10 and there are no adverse amenity impacts on surrounding properties resulting from the increase in FSR.
11. The experts agree that the additional three units would increase the overall number of bedrooms from 18-21 and there would not be a material increase in intensity of use, particularly as the development does not provide parking and is in close proximity to existing and proposed transport.
12. Mr Darroch considered that the infilling of the "voids" to units 2, 3 and 4 would provide different amenity to that approved but that it would remain excellent as the units are north facing with large balconies. Similarly the amenity of the proposed units 8, 9 and 10 would be excellent. Although unit 9 is 1sqm below the minimum area required for a studio under the Apartment Design Guide (ADG), it is the same size as other studios approved under the consent. Mr Darroch considered that the development would be consistent with the objectives of the FSR control.
13. Ms Murphy considered that although a cl 4.6 objection is not required, the s96 applications "should not be used as an avenue to circumvent the application of cl 4.6". In her opinion, the proposal does not demonstrate why compliance with the FSR standard is unreasonable or unnecessary in the circumstances of the case or that a better outcome is achieved. Furthermore, the absence of built form or amenity impacts is not of itself a justification to vary the development standard. In her experience, the FSR standard had been consistently maintained. She accepted that the proposed apartments would provide acceptable amenity and that the objectives of the FSR standard are met by the proposal. Although, she raised concerns about the precedent it may set. She noted that future infrastructure may enable greater densities but only where community infrastructure is provided, similar to the requirements of cl 6.14 of the LEP.
14. Ms Castellanos and Mr Smith commented on the amenity impact raised in the Contentions in relation to the size of Unit 9. Ms Castellanos considered that the amenity of unit 9 is not diminished by its size as the quality and layout of the space will provide flexibility of use and meet the objectives in the ADG. Mr Smith considered that space, amenity and flexibility of use are crucial to the design of studio apartments and in a small apartment even 1sqm under the required area has the potential to reduce amenity. Findings
15. Mr Staunton referred to the decision in SDHA Pty Ltd v Waverley Council [2015] NSWLEC 65 to support his submission that cl 4.6 does not apply to the modification applications and that the objectives of the FSR control, are not a mandatory consideration. In SDHA, at [31] to [36], Pepper J found: 31. The first is, as the council correctly submitted in my opinion, that the application before the Commissioner was a modification application pursuant to s 96 of the EPAA, and that, as a matter of law, s 96 constituted a complete source of power to modify a consent, and therefore, cl 4.6 did not apply and was not relevant for the purposes of s 96(3) of that Act. …… 33. Accordingly, there was nothing in the LEP that obliged, in mandatory terms, the taking into account of the objectives of the height or FSR controls because the cl 4.6 objection was otiose. 34. Just as, by analogy, an objection under the State Environmental Planning Policy No 1 does not apply to s 96 applications, neither did cl 4.6 of the LEP and the objection based upon it before the Commissioner (Lido Real Estate Pty Ltd v Woollahra Council (1997) 98 LGERA 1 at 4 per Talbot J, North Sydney Council v Michael Standley & Associates Pty Ltd (1998) 43 NSWLR 468 at 480-481 per Mason P - cited in 1643 Pittwater Road at [52] and Gann v Sutherland Shire Council [2008] NSWLEC 157 at [8]-[18] per Lloyd J). 35. Although both Lido Real Estate and Michael Standley concerned an earlier version of the power to modify development applications as contained in s 102 of the EPAA (the precursor to s 96), given the almost identical language contained in s 102(3A) and (4) to the present text of s 96(3) and (4), the same result must follow. No error, therefore, was committed by the Commissioner in not considering cl 4.6 or the objection based upon it as asserted by SDHA. 36. Second, as the authorities referred to above make plain, SDHA is bound by the manner in which it conducted its case before the Commissioner. SDHA took the position before the Commissioner that the height and FSR controls were of little assistance in evaluating the proposal. I agree with the council that it cannot now run a contrary argument.
16. Mr Staunton acknowledged and Dr Smith agreed that, while the objectives of the FSR standard are not a mandatory consideration, they may be considered. In the circumstances of a s96 modification, I find that it is appropriate to consider the objectives of the FSR standard, particularly as the applications modify the Consent from one which complied with the FSR standard to one which exceeds this standard. Given that s 96 is a stand-alone power and free from the requirements of cl 4.6 it is more reason to consider whether the proposed modifications would meet the objectives of the standard, and in doing so to consider whether the objectives are met in a similar, better or worse manner to that in the Consent. These are matters which would also be relevant in determining whether the consent as modified would be substantially the same development as the development for which consent was originally granted, although council did not raise this as an issue (see Parker Logan Property Pty Ltd v Council of City of Sydney [2016] NSWLEC 1333).
17. The objectives of the FSR standard are: 4.4 Floor space ratio (1) The objectives of this clause are as follows: (a) to provide sufficient floor space to meet anticipated development needs for the foreseeable future, (b) to regulate the density of development, built form and land use intensity and to control the generation of vehicle and pedestrian traffic, (c) to provide for an intensity of development that is commensurate with the capacity of existing and planned infrastructure, (d) to ensure that new development reflects the desired character of the locality in which it is located and minimises adverse impacts on the amenity of that locality.
18. The modifications do not result in a change to the envelope of the building, other than the balconies to units 1, 8, 9 and 10, and there will be no increase in the bulk or scale from the additional GFA. Similarly, while the proposed modifications will increase the number of units and bedrooms by three there will be no material increase in the land use intensity of the development or vehicle and pedestrian traffic generation and it would be commensurate with the capacity of existing or proposed infrastructure. This is unlikely to be the case if the proposal were to have involved the infilling of the pergola on the roof terrace to provide additional habitable floor space. Such an amendment would clearly add to the bulk and intensity of the development beyond what is anticipated by the controls.
19. The Consent involved a variation to the height control and included voids to units 2, 3 and 4, which would have added to the height. These units provided north facing windows to the two storey living areas. The removal of the "voids" will reduce amenity to these units. Although, this was not raised in the contentions, it was addressed by the planning experts in oral evidence. While I do not accept Mr Darroch's evidence that the amenity will "change but not be reduced", I accept the agreed position of these experts that the amenity of these units and the proposed units 8, 9 and 10 will be acceptable. Each of these units will have large balconies and adjoining living areas that face north and while the amenity will be less than that approved, it would not be unreasonably compromised by the proposed changes to the extent that it would warrant refusal of the s96A Application. Similarly, the infilling of the void to unit 1 to provide an additional bedroom will not compromise the amenity of this unit.
20. The size of proposed Unit 9 is 1sqm less than the requirement in the ADG. However, this unit is the same size as the other studios in the development, which were found to be acceptable in the Consent and its amenity will not be unreasonably compromised by the shortfall in size, particularly as it, and the other studios, face north and have balconies that exceed the requirements of the ADG.
21. The additional floor space in the roof space of the existing heritage item does not change the exterior of the building and, as discussed above, would not adversely impact on its heritage significance, particularly when compared to the Consent.

Conclusion

1. The other matter raised by council would not be reasons to refuse the modification applications. For the above reasons, I find that the proposed modifications satisfy the requirements of cl 5.10 and are consistent with the objectives of the FSR standard in cl 4.4 of the LEP and that the appeals may be upheld.

ORDERS

1. The Orders of the Court in Appeal No. 2016/159333 are: 1. The appeal is upheld; 2. Modification Application No. D/2015/326/A to modify Development Consent No. D/2015/326 is determined by approving the modifications set out in Annexure A; 3. As a consequence of order (2), Development Consent No. D/2015/326 is now subject to the consolidated, modified conditions of development consent set out in Annexure B; and 4. The exhibits, except Exhibit 2, are returned
2. The Orders of the Court in Appeal No. 2016/187506 are: 1. The appeal is upheld; 2. Modification Application No. D/2015/326/B to modify Development Consent No. D/2015/326 is determined by approving the modifications set out in Annexure A; 3. As a consequence of order (2), Development Consent No. D/2015/326 is now subject to the consolidated, modified conditions of development consent set out in Annexure B; and 4. The exhibits, except Exhibit 1, are returned Annelise Tuor Commissioner of the Court 159333.16 and 187506.16 - Annexure A (20.1 KB, pdf) 159333.16 and 187506.16 - Annexure B (251 KB, pdf) 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. Decision last updated: 09 May 2018