Castle Constructions v North Sydney Council

Applicant: LEGAL REPRESENTATIVES: Mr C McEwen, SC and Ms S Duggan, barrister instructed by Mr M Dockrill, solicitor of Day Dockrill Ms H Irish, barrister instructed by Ms L Leece of Mallesons Stephen Jaques

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

11010 of 2005 Castle Constructions Pty Ltd v North Sydney Council

JUDGMENT 1 Senior Commissioner: This is an appeal against the refusal by North Sydney Council (the council) of a development application to demolish the existing buildings and erect a 31-storey commercial/residential building consisting of basement parking, a podium of five commercial floors and a tower of 26 residential floors.

The site 2 The site is on the western side of Walker Street. Its area is 1,176m2. To the west is 3-11 Ward Street, a site for which the Court refused an application on 13 October 2005 (Great Wall Property Group v North Sydney Council (No 2) [2005] NSWLEC 574), and for which there is new application before the council. On the eastern side of the street, opposite the site, are several low-rise blocks of flats. To the south of those buildings is the Century Plaza building, a 20-storey apartment building. To the south is an eleven-storey office building at 76 Berry Street (the People Telecom building) with a top RL of 110. To the north is 142 Walker Street, on which stands a two-storey apartment building in a state of dilapidation. To the north of No 142 are four heritage-listed two-storey apartment buildings, 144-150 Walker Street. A development application for a proposal on those four sites has been lodged with the council and is on appeal before the Court.

The proposal and its history 3 The applicant proposes to demolish the existing buildings on the site and to erect a 31-storey commercial/residential building consisting of basement parking, a podium of five commercial floors and a tower of 26 residential floors. The RL of the roof is 162.50m. The tower element is set back 6.5m from the western boundary, 3m from the southern boundary, and 3m from the eastern boundary. The setback from the Walker Street boundary varies, with an average of about 5m. 4 The applicant lodged the development application in June 2005. Following notification, the council received 75 objections. The council's Urban Design Advisory Panel considered the proposal in July 2005. The Panel noted that the proposal does no adequately address SEPP 1 on variation of controls in terms of the breach of height controls and in particular the BHP control. The Panel did not support it for the following reasons: + The proposal is totally out of context and fails to relate to the lower scale residential development in this transition area of the CBD; + The proposal will be an overdevelopment of the site; + The site cannot be developed independently of 3 Ward Street and achieve an adequate separation from that site; + The proposal will leave 142 Walker Street orphaned and unable to be developed. 5 The applicant lodged the appeal in September 2005.

Relevant planning controls 6 Local Environmental Plan 2001 (the LEP) zones the site Mixed Use. Development Control Plan 2002 (the DCP) applies including the area character statement for the Central Business District. State Environmental Planning Policy 65 - Design Quality of Residential Flat Development (SEPP 65) and its ancillary Residential Flat Design Code (RFDC) apply. 7 State Environmental Planning Policy 1 - Development Standards (SEPP 1) applies to variations of development standards.

The issues 8 The council's amended Statement of issues contained seven issues, of which it pressed four at the hearing, ie + The proposal will isolate the site to its north, No 142 Walker Street; + The proposal's height, scale and massing is excessive; + The proposal breaches the BHP (BHP); and + The setbacks are inadequate.

The objectors concerns 9 The Court heard the evidence of eleven resident objectors during the site visit. Ms Barbara Noden, who lives at 11/45 McLaren Street, said her concerns were excessive bulk and height, overshadowing of the Century Plaza building, loss of light to buildings around, traffic congestion on Walker Street, canyon effect and lack of landscaping. Ms Diana Fischer, who lives at 17 Hampden Street, said that her additional concerns were traffic and the proposal's effect on the stability of buildings around. Mr Gerard Volk, who lives at 12 Hampden Street in one of ten terraces, said that all the owners of the terraces object to the large unsympathetic scale of the building. If built, the proposal would destroy the area's character. Ms Patricia White, who lives at 39 McLaren Street, said that her additional concerns were possible lack of electricity due to the additional demands of the proposed building, and the impact on traffic in Walker Street. Mr Christopher Daunt Watney, who lives at 4/185 Walker Street, said that his additional concerns were the inadequate infrastructure of the area. 10 Ms Rosemary Cook (level 10), Ms G Stewart (level 1), Ms Diana Baker (level 13), Mr Neville Witts (level 9), and Ms Rosemary Nicholl (level 9), all of whom live in the Century Plaza building, said that they objected to the additional overshadowing of their bedrooms on winter afternoons. 11 Mr Dean Dinov, who represented the owners of 3-11 Ward Street (the GW Property Group), said that the building should set back 6m from the southern boundary to allow some view sharing with the proposed building on his property, for which a development application has been submitted to the council. He also stated that, if the subject proposal were to proceed, it would overshadow the proposed building on 3-11 Ward Street currently before the council and the latter would no longer meet the requirements for solar access.

The experts 12 The council's planning expert was its Executive Assessment Planner, Mr Geoff Mossemenear. The applicant's expert was Mr Terry Byrnes, a consulting architect and planner.

Isolation of 142 Walker Street 13 The site adjoining to the north, No 142 Walker Street, has an area of 569m2, which is considerably below the minimum allotment size of 1,000m2 specified in the LEP. Clause 28D(1)(f) of the LEP contains the objective: to encourage consolidation of sites for provision of high-grade commercial space and provision of public benefits. 14 The applicant submitted an affidavit by Mr V Lahoud, a director of Castle Constructions Pty Ltd, attached to which were copies of the correspondence with First Land Corporation Pty Ltd (the owners of No 142) concerning the possible amalgamation of the subject site with No 142. The correspondence reveals that the value of No 142 in its existing use is around $2 million. The applicant offered First Land Corporation $2.1 million, or $2.5 million and $3 million for options of 12 months or 24 months respectively. 15 Mr Robert Brennan, a director of First Land Corporation Pty Ltd, gave evidence. He said that he would accept an offer that he considered to be fair; however, he has not had a valuation done for his property. He has had a conditional offer of $3 million from the owners of the four properties to the north, 144-150 Walker Street, which he did not accept. He would not consider accepting any offer unless it was over $3 million, though he would certainly accept an offer of $6 million. 16 I asked Mr Mossemenear and Mr Byrnes what the development potential of No 142 was, if it were developed by itself, on the assumption that development were possible as a result of a successful Objection to the application of the minimum allotment size under SE$PP 1. Their response was remarkably similar: a building of five storeys, set back from its northern boundary with No 144 (the heritage-listed site) and built to the common boundary with the subject site to its south. To comply with the LEP's requirement for a minimum commercial FSR of 3:1, the building would have to be for commercial use, unless that requirement were also varied under SEPP 1. 17 On the basis of Mr Mossemenear, Mr Byrnes and Mr Brennan's evidence, I have concluded that amalgamation of the No 142 with Nos 136-140 is unlikely, at least in the time frame of this application. In my opinion, Mr Brennan has an inadequate appreciation of how the council's planning controls constrain the development potential of No 142, and hence an inflated idea of its value. 18 I do not think that, in this particular case, which is exceptional and contradicts the general principle that amalgamation produces a better planning result, the failure to amalgamate the subject site with its northern neighbour will lead to an inferior result. If No 142, developed by itself, can support only a five-storey building (and both experts expert agreed that this is so), then its separate development would result in whatever tower element occurs on the subject site being further removed from the heritage-listed items than would be the case if No 142 were amalgamated with the subject site. Another possibility is that the Objection under SEPP 1 to vary the minimum allotment size for No 142 is not successful, in which case the site cannot be redeveloped at all. Yet another possibility is amalgamation or joint development with the sites to the north, Nos 144-150. 19 In view of the above, the isolation of No 142 by the proposal is not a reason for its refusal.

Height, scale and massing 20 Because of the importance of cl 28D in these proceedings, I quote sub clauses 28D(2), (3), (4) and (5) in full. (2) Building heights and massing controls Consent must not be granted to the erection of a building within the North Sydney Centre, unless: (a) the height of the building will not exceed RL 195 AHD, and (b) there is no net increase in overshadowing of any land between the hours of 9am and 3pm, 21 June outside the composite shadow area, as shown on the map marked "North Sydney Local Environmental Plan 2001 (Amendment No 9)- North Sydney Centre" (except land that is in the road or Railways Zone), and (c) there is no net increase in overshadowing, between lOam and 2pm, at any time of the year, of any land that is within the North Sydney Centre and is within the public open space zone or within a special area as shown on Sheet 5 of the map marked "North Sydney Local Environmental Plan 2001 (Amendment No 9)- North Sydney Centre", and (d) there will be no increase in overshadowing that would reduce the amenity of any dwelling that is outside the North Sydney Centre and falls within the composite shadow area referred to in paragraph (b), and (e) the site area is not less than 1,000 square metres. (3) State Environmental Planning Policy No l-Development Standards does not apply to a requirement made by subclause (2) (a), (b) or (c) (including a requirement varied under subclause (4)).

(4) Minor variation of overshadowing controls The consent authority may make a determination to vary, to a minor extent only, the operation of subclasses (2) (b) or (c), or both, in respect of a particular development application, but only if: (a) it is satisfied that the variation is justified due to the merits of the development application and the public benefit to be gained, and (b) it is satisfied that any increase in overshadowing will not reduce the amenity of any land, and (c) in relation to a variation of the operation of sub clause (2)(b), the variation will result in not more than 2 hours net increase in overshadowing of land referred to in that paragraph between the hours of 9am and 3pm, 21 June, and (d) in relation to variation of the operation of subclause (2)(c), the variation will result in not more than 15 minutes net increase in overshadowing of land referred to in that paragraph between the hours of 10am and 12 noon, and no net increase between the hours of 12 noon and 2pm, on any day. (5) Building design and public benefits When determining whether or not to grant consent to a development application in respect of land within the North Sydney Centre, the consent authority must consider: (a) the impact of the proposed development in terms of scale, form and massing within the context of the locality and landform, the natural environment and neighbouring development and in particular lower scale development adjoining the North Sydney Centre; and (b) whether the proposed development provides public benefit such as open space, through-site linkages, community facilities and the like; and (c) whether the proposed development preserves important view lines and vistas; and (d) whether the proposed development enhances the streetscape in terms of scale, materials and external treatments, and provides variety and interest. 21 It can be seen that clause 28D(2)(a) of the LEP establishes the maximum height of RL 195 for the site. However, the height is also controlled by sub clauses 28D(2)(b), (c) and (d), 28D(4) and (5) and by the BHP in cl 30 (see section below). 22 A great deal of Mr Byrnes' defence of the proposal is based on the assumption that the maximum height of RL 195 has primacy over other controls, so that where other controls suggest a height considerably below RL 195, then they should not be stringently applied. I do not see anything in the LEP that sanctions this construction. In my opinion, all controls must be given serious consideration and varied only when variation is justified. 23 The proposal overshadows the northwest façade of the Century Plaza building, which is outside the North Sydney Centre and falls within the composite shadow. The applicant submitted an Objection under SEPP 1 to the development standard in cl 28D(2)(d), ie that there will be no increase in overshadowing that would reduce the amenity of any dwelling that is outside the North Sydney Centre and falls within the composite shadow area referred to in paragraph (b)… 24 I am not sure that an Objection under SEPP 1 is possible to cl 28D(2)(d), since I do not think that it is a development standard or that it can be expressed as one. However, I set aside my doubts and consider the Objections as if cl 28D(2)(d) contained a development standard. The gist of the justification in the Objection is that the shadow impact is for an hour and a half in the afternoon and falls only on bedrooms. The diagrams show that for much of that period, all 20 floors of the building are affected. I do not think that the impact could be considered minor or moderate, even taking account of the fact that it falls on bedrooms rather than living areas. The Objection is not well founded. The proposal breaches cl 28D(2). 25 The proposal also breaches cl 28D(5). It is out of scale with almost everything around it, including the Century Plaza building, which itself is out of scale with its surroundings. It dominates the street and destroys any remnant of character left in Walker Street. Its impact, in terms of scale, form and massing within the context of the locality, landform and neighbouring development, and in particular lower scale development adjoining the North Sydney Centre, is unacceptable.

Breach of the BHP 26 Clause 30 of LEP 2001 refers to BHPs (BHPs). (1) BHP objectives. The specific objectives of the BHP controls in the mixed-use zone are to: a) ensure compatibility between development in the mixed use zone and adjoining residential or open space zones, and b) minimise adverse effects on land in adjoining residential or open space zones in relation to ventilation, views, building separation, solar access and light and to avoid overshadowing of windows, landscaped areas, courtyards, roof decks, balconies and the like. (2) BHP controls. A building must not be erected in the mixed-use zone, on land that adjoins or is adjacent to land within a residential or open space zone, if any part of the building will exceed a BHP: a) commencing 1.8 metres above existing ground level, projected at all points from each of the boundaries of the site which adjoin land within the residential A1, A2, B, D or F zone or open space zone, or b) commencing 1.8 metres above existing ground level, projected from the centre of any road which separates the land from land within the residential A1, A2, B, D or F zone or open space zone, or c) commencing 3.5 metres above existing ground level, projected at all points from each of the boundaries of the site which adjoin land within the residential C zone, or d) commencing 3.5 metres above existing ground level, projected from the centre of any road, which separates the land from land within the residential C zone. 27 The LEP defines the objectives of the BHP as follows: (a) to ensure compatibility between development in the mixed-use zone and adjoining residential or open space zones; and (b) to minimise adverse effects on land in adjoining residential or open space zones in relation to ventilation, views, building separation, solar access, light and avoid overshadowing of windows, landscaped areas, courtyards, roof decks, balconies and the like. 28 The BHP that applies to 136-142 Walker Street is defined by cl 30(2)(d). It was common ground between the parties that the BHP was a development standard and subject to variation under SEPP 1.

29 An illustration of the extent to which the proposal breaches the BHP is attached to this judgment. It can be seen that only the five-storey podium is within the BHP, while all the 26 residential floors breach it. Mr Byrnes prepared an Objection under SEPP 1. The gist of his justification for breaching (or more correctly, entirely ignoring) the BHP was that compliance would allow only a small amount of residential development and the shadow effect on the Century Plaza building falls on bedrooms and for short periods only. 30 Mr Mossemenear did not suggest that the proposal should be entirely within the BHP; in his opinion, some extent of non-compliance was justified in view of the adjoining People Telecom building, which is eleven storeys high, with a RL of 110. He thought that the proposal should be lower by two floors, ie achieve a RL of 103m. This would result in a 12-storey building, with seven residential floors above the five-storey podium. 31 Mr Mossemenear provided some illustration of the proposal's view impact on the central apartments of 79-81 Berry Street. The impact would obscure the middle third of the view to the north, which is not a Harbour view but a panoramic view of the district. Mr Mossemenear commented that, with a RL of 103m, there would be no view impact. 32 I do not think that the Objection prepared by Mr Byrnes is well founded. The proposal is inconsistent with several of the objectives of the BHP. It fails to achieve compatibility with adjoining residential zones and it fails to minimise adverse effects on land in adjoining residential zones. I accept that there are some other buildings nearby that are out of scale with their neighbours, notably the Century Plaza building. However, this is not a reason to allow another building that would dwarf the Century Plaza building. In my opinion, Mr Mossemenear's analysis of how the BHP should apply to this site indicates flexibility on his part and is generous to the applicant. I accept his evidence that the proposal should have a maximum RL of 103m.

Setbacks Front setback 33 While Mr Mossemenear criticised the proposal's setback from Walker Street as not complying with the North Sydney Centre Planning Area (Central Business District) Character Statement, in cross-examination he agreed that the front setback did comply. I accept the front setback as appropriate.

Setback from western boundary 34 The setback from the western boundary is 6.5m, providing a separation of 13m from the proposal before the council on 3-11 Ward Street. Mr Mossemenear agreed that this was sufficient, provided the proposal did not rise above RL 103. Since I have accepted his opinion on the appropriate height, the setback of 6.5m is adequate.

Setback from southern boundary 35 The setback from the southern boundary is 3m. The Telecom People building is 15m from its northern boundary, so that the 3m-setback would provide a separation of 18m, which is clearly adequate, given that the Telecom People building is an office building. Despite this, in Mr Mossemenear's opinion, the setback should be 6m, to increase amenity and protect the private open space to the north of the Telecom People building. I note that Mr Dinov, the objector on behalf of the proposal on 3-11 Ward Street, also requested a setback to reduce the view impact on his site. 36 In Great Wall Property Group v North Sydney Council (No 2) [2005] NSWLEC 574 I noted the well-established principle of planning that a development should not rely on neighbouring sites for its amenity, nor should it require other sites to forgo development potential. In that judgment the principle was applied to the 3-11 Ward Street site in its relationship to the site that is the subject of this appeal. The applicant in this appeal, who was an objector in Great Wall Property Group, made this point strongly in its objection. However, if the principle applied in Great Wall Property Group, it applies also to this site in its relation to its southern and northern neighbours. Where a separation distance of 18m is desired, each development should provide 9m. The fact that the building on the southern adjoining site has been set back from the common boundary by 15m is not a reason for this building to adopt a setback of only 3m. The designers of the Telecom People building presumably made a decision to build far away from the northern boundary in order to obtain good northern exposure and to provide a pleasant courtyard to the north. I do not think it is reasonable to use this as justification for building close to the common boundary, thereby destroying the amenity that the neighbour was trying to achieve in adopting the generous setback. 37 I note, however, that a 9m setback would unreasonably reduce the width of a potential building on the subject site and therefore I accept Mr Mossemenear's suggestion that the appropriate setback for the tower element from the northern boundary is 6m. The podium may be set back 3m.

Setback from northern boundary 38 The proposal's podium element is built on the boundary, while the tower element is set back by 3m. Mr Mossemenear and Mr Byrnes agreed that the podium is appropriate on the boundary. I note that Mr Brennan had no objection to this. However, Mr Mossemenear considered that the tower element should be set back by 6.5m, to allow for a 13m separation from any future building that might be built on 142 Walker Street. Mr Byrnes argued that, since No 142 has a potential for only a five-storey building, there was no need to provide a 6.5m setback. I do not accept this. The future development of No 142 is uncertain, and amalgamation with the four sites to its north is an option. In any case, the planning principle that a development should not rely on neighbouring sites for its amenity, nor should it require other sites to forgo development potential, applies to the northern neighbour as much as it does to the southern adjoining site. I accept Mr Mossemenear's evidence that the setback of the tower element from the northern boundary should be 6.5m.

Conclusions 39 With the exception of the overall height requirement of RL 195, this proposal breaches almost all of the council's numerical planning controls with respect to scale, height and bulk. It breaches most of the qualitative controls aimed at producing a harmonious relationship between streets and buildings. It has a devastating effect on solar access to the bedrooms in the Century Plaza building and on views from a minority of dwellings in 79-81 Berry Street. 40 While no density control applies to the site, I note that the proposed building contains more than 3,000m2 of office space and over 100 apartments on a site that is double the size of a medium suburban parcel. These simple statistics should give an indication of the extent to which it is overdevelopment. 41 Throughout the hearing I found Mr Mossemenear's evidence highly persuasive. He did not rely on the council's numerical controls rigidly, but tempered their application taking into account the practicalities of the site and the fact that there are some large buildings already in the vicinity. 42 For the above reasons the appeal is dismissed.

2. Development application to demolish the existing buildings and erect a 31-storey commercial/residential building consisting of basement parking, five commercial floors and 26 residential floors is determined by refusal.

      Dr John Roseth
      Senior Commissioner

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