City West Housing Pty Ltd V Sydney City Council [1999] NSWLEC 246

6. As a consequence of the coming into force of the relevant amendments to the REP, the Applicant lodged with the Council a further development application in respect of the same development proposal supported by an objection pursuant to State Environmental Planning Policy No 1 - Development Standards (SEPP No 1) in respect of the height and floor space ratio provisions of the REP (as amended on 18 June 1999). Previously in the history of the Applicant's development proposal no SEPP No 1 objection had been necessary because the proposal complied with the then applicable height limit of 28 m and there was no floor space ratio control applicable to residential flat development.

7. Upon the hearing of the present appeal, the Applicant informed the Court that it wished to rely upon that objection pursuant to SEPP No 1 and the Council informed the Court that it was content for the Court so to entertain the objection on the basis that each of the relevant height and floor space ratio provisions of the REP (as amended on 18 June 1999) was relevantly a "development standard" within the meaning of the EP&A Act and therefore was amenable to an objection pursuant to SEPP No 1.

8. For completeness, it should be noted that the Applicant's later development application was determined by the Central Sydney Planning Committee established under the City of Sydney Act 1988, Part 4 (and not by the Council) apparently because the view was taken that the proposed development was "major development" within the meaning of that expression in terms of the City of Sydney Act 1988 s 31(b). That determination was to refuse development consent.

9. Although the precise terms of the Council's Planner's report to the Central Planning Committee were not in evidence, the documentary evidence discloses that the report had recommended refusal of the application. Additionally, the documentary evidence includes the comments made by the Department of Urban Affairs and Planning on the Council's Planner's report on the Applicant's second development application that was submitted to the Central Planning Committee. Those written comments were sent to each member of the Central Sydney Planning Committee and concluded that the proposed development "provides a good outcome from a balanced assessment of the large range planning and design provisions for Ultimo - Pyrmont" (Exhibit 8). The comments included the following specific comment in respect of the proposal's exceedance of the floor space ratio control:

FSR - The proposal does not comply but the SEPP1 objection is supported due to: (i) overall compliance with the majority of provisions in the REP and UDP; (ii) the design excellence; (iii) the ESD innovations; and (iv) not prejudicing re-development of adjoining land in the street block.

10. The documentary evidence discloses that in refusing the development application, the Central Sydney Planning Committee passed the following Resolution - (A) having regard to the proposed development exceeding the maximum building height of 21m and the maximum floor space ratio limit of 3:1 and the extent of the non-compliance, proposed, the SCPC refuse to support the objection made under SEPP1 regarding non-compliance with the maximum building height and maximum floor space limit controls as both standards are considered reasonable and necessary in this instance; and (B) consent be refused for the following reasons: (1) proposed development does not comply with urban design planning principles for the Ultimo-Pyrmont Precinct in clause 15 of SREP 26 in that the height and scale of the new building fails to respect the existing buildings in the locality, particularly the heritage item; (2) the proposed development does not comply with the Residential-Business zone requirements …in that amenity of the development is likely to be adversely affected by excessive odour from the nearby Sydney Fishmarkets (3) the proposed development does not comply with the maximum building height control in …REP 26 (4) the proposed development does not comply with clause 26 of REP 26 in that it fails to provide an appropriate transition in scale with the heritage listed Sydney Water Pumping Station (5) the proposed development does not comply with the floor space limit of …REP 26 (6) the proposed development does not maintain an acceptable heritage curtilage and setting for the heritage listed SWPS (7) the proposal does not comply with the built form, character and detail, sustainable residential development, and access, parking and circulation provisions of the Urban Development Plan for Ultimo-Pyrmont … (8) the proposed development has not obtained adequate legal rights over the adjoining land to permanently secure borrowed light and ventilation from the curtilage of the SWPS (9) the proposed development does not comply with the provisions of Council's Code for Waste Handling in Buildings (10) any development on the site should not be considered in the absence of a Master Plan or Urban Development Plan being prepared, exhibited and adopted by the DUAP for the block bounded by Wattle Street, Wattle Crescent and Pyrmont Bridge Road. (11) the applicant has not demonstrated that the requirements of the Roads and Traffic Authority have been satisfied; and (12) the proposal is not in the interest of the public.

11. On the hearing of the appeal, although the Council relied upon all issues raised in the filed Statement of Issues, (which reflect the reasons for the Central Planning Committee's refusal of the Applicant's second development application) the principal issues debated concerned (a) the proposed development's exceedance of the REP's controls in respect of (i) height and (ii) floor space ratio (and the Applicant's reliance upon its SEPP No 1 objection in respect of those development standards) and (b) the proposed development's relationship to the adjoining Sydney Water Pumping Station, being a heritage item designated by the REP.

B. DESCRIPTION OF THE DEVELOPMENT SITE AND ITS ENVIRONS

12. The development site comprises an area of 1138 m2 created by the proposed amalgamation of two lots being part of lot 1 DP 997831 (owned by Sydney Water) and part of lot 2 DP 800390 (the WreckAir site owned by Roscommon Finance Pty Ltd) in respect of which land the Applicant has either entered into a conditional contract for purchase (in the case of the latter lot) or is in the course of negotiations with a view to purchase (in the case of the former lot).

13. It is to be noted that the development site is shown as lots 2 and 3 of a draft plan of subdivision showing all of the land comprising the street block surrounded by Pyrmont Bridge Road, Wattle Street and Wattle Crescent, a copy of which is annexed hereto and marked "A". That plan which has not yet been approved, embraces all of the land which the Council's reasons for refusal required to be the subject of a separate Master Plan or UDP prepared in accordance with the REP. (For convenience, I shall hereafter refer to the larger land unit as the "Street Block".)

14. The development site is rectangular in shape situate at the corner of Wattle Street and Wattle Crescent, having a frontage of approximately 40 m to the former street and 33 m to the latter.

15. The development site is situate very close (some 30 m distant) to the signalised intersection of Pyrmont Bridge Road and Wattle Street, both being arterial roads.

16. Situate to the south of the development site on the opposite side of Wattle Street is Wentworth Park.

17. Situate to the east of the development site on the opposite side of Wattle Crescent (for its entire length) is the "Parkview Towers" development, comprising some 225 apartments in four contiguous block buildings ranging from 6 storeys at the Wattle Street/Wattle Crescent corner to 10 storeys as the development extends along the entire length of Wattle Crescent. This development, which was approved under the REP by the Minister, as consent authority, came into existence some four years ago.

18. Situate to the west of the development site is the Sydney Water Pumping Station building, a small structure, and associated buildings. Directly across from the intersection of Wattle Street and Pyrmont Bridge Road is Blackwattle Bay and immediately to the north on the waterfront is the Sydney Fish Markets complex of buildings.

19. Situate to the north, forming the apex of the Street Block, is a series of warehouse, wholesale/retail developments (CSR Gyprock Living Centre and Taubmans Paint Centre in one storey warehouse style buildings).

20. A copy of the site plan of the locality is annexed hereto and marked "B" upon which I have annotated the locations of the various developments that I have described as forming the immediate environs of the development site.

21. The relevant planning controls in force under the REP are somewhat labyrinthine and unfortunately will need to be set forth in some detail.

22. The REP includes the development site within the "Residential - Business" Zone. Included within that zone are (i) the Street Block; (ii) the waterfront land at Blackwattle Bay situate to the north-west of the development site; (iii) all the land fronting the northern side of Wattle Street between Blackwattle Bay and Broadway. Indeed, the "Residential - Business" Zone is the dominant zone of all the land comprising the City West Area.

23. The Residential Zone (a separate zone) applies to a large amount of land in the City West Area, including the land on the eastern side of Wattle Crescent upon which is located the "Parkview Towers" development.

only uses which the consent authority is satisfied are generally consistent with one or more of the zone objectives are permissible in this zone

25. The clause states the following zone objectives for the " Residential - Business " Zone: · to promote a wide range of uses, particularly business development including tourist, leisure, commercial, retail an office development consistent with the Precinct's proximity to the Sydney CBD, harbour locations and transport infrastructure, and · to accommodate residential development to a level compatible with adjoining business uses and consistent with the objective of creating a mixed use area, and · to accommodate uses which generate employment opportunities and provide facilities and services that enable people to live and work in the same community, and · to ensure that the total amount of employment-generating development is compatible with the traffic capacity of the Precinct and adjoining areas, and · to encourage sustainable transport modes for journeys to work and other trips, including walking, cycling and all forms of public transport, and · to limit advertising to a level compatible with the creation of a high-quality mixed use area.

26. The clause also includes the following provision with respect to "residential development":

Residential development is not to be located or designed so that amenity within this zone is adversely affected to a level considered inappropriate by the consent authority due to excessive noise or odour or any other similar environmental impact from an adjoining or nearby use.

27. Additionally, cl 18 , by virtue of the following provision, imposes a further limitation on the grant of development consent:

Consent is to be granted to development within this zone only if the consent authority is satisfied that carrying out the proposed development will be consistent with the planning principles for the relevant precinct and for City West, particularly residential provision and amenity.

28. This provision invokes the relevant " planning principles " contained in Pt 2 and Pt 3 of the REP, Pt 2 dealing with City West and Pt 3 dealing with designated Precincts (including the " Ultimo - Pyrmont Precinct " within which the development site is located).

29. The planning principles for City West are enunciated in the Table to cl 11 and include the following:

Development in City West is to promote urban consolidation in the Sydney Region and consequently contribute to Sydney's status as a financial, commercial, residential and tourist city of world standing.

Development in City West is to provide benefits to the people of the Sydney Region and New South Wales.

The types and intensities of development in City West are to reflect its central location and accessibility to public transport and are to support and to complement development in the city centre.

Development in City West is to contribute to an integrated mixed-use development pattern containing a wide range of housing and employment opportunities, and educational, recreation and cultural activities.

Development in City West is to house an increased population and to provide an increased quantity and range of employment opportunities which are compatible with the achievement of a high-quality mixed living and working environment.

Development in City West is to promote and retain close to the city centre a socially diverse residential population representative of all income groups.

Development in City West is to provide different kinds of housing, including affordable housing, to ensure that low to moderate income households may continue to be able to live in City West.

Development in City West is to provide opportunities for people to live and work at places in close proximity.

30. The planning principles for the Ultimo - Pyrmont Precinct are enunciated in the Table to cl 15 and include the following:

Development in the Precinct is to provide for a significant increase in residential population in a mixed use development pattern also accommodating employment, educational and other uses.

Because land values in the Precinct may reasonably be expected to increase when land in the Precinct is developed in accordance with this plan, development in the Precinct is to provide affordable housing to ensure that low to moderate income households may continue to be able to live in the Precinct..

Development in the Ultimo-Pyrmont Precinct is to comply with ecologically sustainable development principles (including the principles promoting inter-generational equity and the conservation of biological diversity and ecological integrity, the precautionary principle, and the principle requiring improved valuation and pricing of environmental resources) by adopting best practice design. Ecologically sustainable development principles should be adhered to for all development particularly for residential and business purposes.

A diverse housing stock is to be developed in the Ultimo-Pyrmont Precinct to cater for all households, including singles, couples, families, groups, the elderly, the disabled and lower income earners.

A mixture of dwelling types and sizes should be provided to enable a diverse community and promote housing choice.

High quality housing with adequate facilities and sustainable design is to be developed to encourage long-term residents and achieve urban consolidation.

Building heights are to reflect and emphasise the topography of the Precinct by increasing in height as distance increases from the nearest waterfront. Building heights should allow a reasonable sharing of distant views from buildings by their occupants.

The heights and scale of buildings are to form a transition between the high-rise buildings in the city and low-rise buildings in the suburbs adjoining the Precinct

The heights and scale of new buildings are to respect existing buildings in the locality, particularly heritage items and buildings in conservation areas..

The heights and form of buildings are to take account of visual impact, solar access, wind impact and, where appropriate, the privacy of residences, in order to contribute to a high quality of environmental amenity in intensively used parts of the public domain and in residential areas.

31. Division 5 of Pt 3 of the REP contains controls on (i) building height and (ii) floor space of buildings.

32. Clause 23 prescribes the maximum height of buildings by reference to the content of Map 3. That reference is to the Map as amended by Amendment No 8 (1999 Update) with the consequence that it is necessary to read together, the original Map 3 and the Amendment No 8 Map 3. Generally speaking, the Amendment No 8 Map reduces the permissible maximum height of buildings from the maximum height originally permitted. Specifically, in respect of the Street Block and further land situate to the north along the waterfront, the maximum height of buildings is reduced from 28 m to 21 m.

33. Clause 23 is in the following terms:
34. The height of any building must not exceed the maximum building height shown on Map 3. However, any building on land zoned Public Recreation must not exceed 7 metres in height.

Before granting consent for any building that will attain the maximum building height, the consent authority must be satisfied that the building will not only meet such of the urban design requirements made by clauses 24, 25, 26 and 26A as are relevant, but will also meet any relevant design requirements made by a Master Plan or urban development plan.

34. That clause expressly imports the additional requirements or controls contained in cl 24, cl 25, cl 26, cl 26A of the REP as are relevant. The following clauses, which are relevant in the present case, provide as follows:
35. Before granting consent to the erection of a building, the consent authority must be satisfied that the building will be consistent with the urban design planning principles for the Precinct in which it will be situated set out in the Table to clause 15.
36. The height of any building adjacent to a heritage item or conservation area must be such as to provide an appropriate transition in scale between the building and either the heritage item or the buildings within the conservation area.

35. In the present case, there is no relevant Master Plan. However, there is a relevant urban development plan, the Urban Development Plan for Ultimo Pyrmont 1999 Update, (UDP) to which reference will hereafter be made.

36. Clauses 27, 27A, 27B and 27C contain provisions in relation to floor space controls. Cl 27 applies to areas in the Ultimo - Pyrmont Precinct for which a Master Plan is required. These are areas in respect of which the Minister is the nominated consent authority, and generally include all the foreshore lands in the vicinity of Blackwattle Bay, Johnstons Bay and Darling Harbour: vide Map 5 Sheet 1 of the REP. These areas were extended by the inclusion of a foreshore strip of land situate to the north-west of the Sydney Fish Markets' site. Somewhat anomalously, the development site and the Street Block, is the only foreshore or near foreshore land situate north of Fig Street that is not included in the Master Plan area for which the Minister is consent authority. Presumably, the Central Planning Committee's decision requiring a Master Plan to be prepared for the street block was its attempt to overcome the perceived anomaly.

37. Clause 27A applies to lands within the Ultimo - Pyrmont Precinct that are not governed by the requirement for a Master Plan to be prepared These lands include the Street Block. The clause prescribes "the maximum floor space ratios" by reference to the prescribed maximum height limits imposed by the REP in respect of (i) residential uses and (ii) business uses. In the case of land governed by the 21 m maximum height control (which includes the Street Block) the maximum floor space ratio for residential uses is 3.0:1 and the maximum floor space ratio for business uses is 3.5:1.

This clause does not allow buildings to exceed maximum heights set by this plan

39. Clause 27B which applies to the Everleigh Precinct is not relevant.

40. Clause 27C is relevant. It provides as follows:

27C. Before granting consent for any building on land for which a Master Plan is not required that will attain the maximum floor space ratio, the consent authority must be satisfied that the building will not only meet such of the urban design requirements made by clauses 24, 26 and 26A as are relevant, but will also meet any relevant design requirements made by an urban development plan and not exceed any maximum height set by this plan. However, the consent authority may consent to a building that exceeds a maximum floor space ratio or a maximum building height for the site (or both) if an urban development plan containing detailed urban design controls for the block containing the site has been adopted by the Minister and the building complies with that plan. Before adopting any such urban development plan, the Minister must be satisfied that it will give effect to the relevant urban design requirements made by clauses 24, 26 and 26A.

41. Division 6 of Pt 3 of the REP contains provisions relating to heritage conservation.

42. Clause 28 identifies "heritage items" on Map 4. Those items are verbally described in Schedule 4 to the REP.

43. Schedule 4 contains the description of 106 heritage items in the Ultimo - Pyrmont Precinct including as "item 55" the following:

(Map 4 only depicts a small section of the Water Board land, presumably limited to the actual site of the pumping station building.)

44. Clauses 29, cl 30 and cl 31 which impose duties on the consent authority referable to heritage conservation provide as follows:
45. Development of or including a heritage item, in the vicinity of a heritage item, or within a conservation area, must be compatible with the conservation of the heritage significance of the item or the character of the conservation area.
46. Before granting consent to any such development, the consent authority must consider:

·the heritage significance of the heritage item or conservation area, and ·the impact that the proposed development will have on the heritage significance of the heritage item and its setting or the conservation area, and ·the measures proposed to conserve the heritage significance of the heritage item and its setting or the conservation area, and ·whether any archaeological site or potential archaeological site would be adversely affected. 31. The consent authority must decline to grant consent for development relating to a heritage item or conservation area unless it has taken into consideration a conservation management plan or heritage impact statement which includes an assessment of the matters listed in clause 30.

45. According to the definitions contained in Schedule 1 to the REP, the following terms which are relevant to cl 31 are defined -

Heritage impact statement means a statement which identifies the heritage significance of a heritage item or conservation area, assesses the impact that the proposed work will have on this significance and details the measures proposed to minimise this impact.

Heritage significance means historic, scientific, cultural, social, archaeological, natural or aesthetic significance.

Conservation management plan means a document which has been prepared in accordance with the provisions of the NSW Heritage Manual and which establishes the heritage significance of a heritage item and identifies conservation management policies and management mechanisms that are appropriate to enable that significance to be retained.

46. Additionally, cl 33 which applies in respect of " potential archaeological sites " (of which the development site is included) provides as follows:
47. Before determining an application for consent to development on land identified in an urban development plan as a potential archaeological site, the consent authority may request a report on the likely impact of the development on any archaeological material.

47. Division 7 of Pt 3 of the REP contains provisions relating to urban development plans. The UDP (1999 Update) qualifies as such a plan and contains a number of detailed provisions relevant to the proposed development.

48. Clause 34 of the REP provides as follows:
49. Before granting consent to development to which an urban development plan applies, the consent authority must take the plan into consideration.

49. The UDP outlines "principles which are considered important for the design of development, and controls through which the principles may be satisfied": cl 1.2.

50. Clause 1.3 of the UDP contains the objectives of the plan and includes the following statement:

The principal objective of this Plan is to ensure that detailed planning and urban design principles and controls reflect and complement the principles and controls in the REP to assist in achieving a built environment of a high standard in the precinct.

51. The UDP contains detailed provisions relating to the built form of proposed developments including provisions dealing with the following subjects: (i) street wall heights; (ii) location and size of internal courtyards; (iii) building setbacks from rear boundaries; (iv) corner articulation of buildings; (v) privacy of occupants; (vi) views, vistas and view sharing; (vii) facade treatment; (viii) roof design; (ix) floor ceiling heights; (x) cross ventilation; (xi) storage; (xii) dwelling mix and diversity; (xiii) private open spaces; (xiv) communal open space; (xv) wind and reflectivity; (xvi) solar access to public open space and private communal open space; (xvii) ecologically sustainable development; (xviii) access, parking and circulation; (xix) access for persons with disabilities.

52. It is not necessary to recite these detailed provisions. However, later it will be necessary to consider in detail, some of the particular provisions with which the proposed development does not comply.

53. Part 4 of the REP contains detailed provisions concerning "affordable housing" in the Ultimo - Pyrmont Precinct.

54. Clause 55 contains the following definitions of the terms "affordable housing" and "affordable housing program".
55. In this Part, affordable housing means rented housing occupied by very low, low and moderate income households provided and managed under the Affordable Housing Program in accordance with the affordable housing principles.

The gross incomes of such households fall within the following ranges of percentages of the median household income for the time being for the Sydney Statistical Division according to the Australian Bureau of Statistics:

In this Part, Affordable Housing Program means an official program, as adopted by the Minister from time to time, for the provision and management of affordable housing in the Ultimo-Pyrmont Precinct in accordance with the affordable housing principles. Copies of the program are available from the Department of Planning's Head Office.

55. Clause 56 enunciates the following " affordable housing principles ".
56. For the purposes of this Part, the affordable housing principles are as follows:
57. Affordable housing is to be created and managed in the Ultimo-Pyrmont Precinct so that a socially diverse residential population representative of all income groups is maintained within that Precinct.
58. Affordable housing is to be made available to a mix of very low, low and moderate income households.
59. Affordable housing is to be rented to appropriately qualified tenants and at an appropriate rate of gross household income.
60. Buildings provided for affordable housing are to be managed so as to maintain their continued use for affordable housing.
61. Rental from affordable housing, after deduction of normal landlord's expenses (including management and maintenance costs and all rates and taxes payable in connection with the dwellings), is generally to be used for the purpose of improving or replacing affordable housing or for providing additional affordable housing in the Ultimo-Pyrmont Precinct.
62. Affordable housing is to consist of dwellings constructed to a standard which, in the opinion of the consent authority, is consistent with other dwellings within the Ultimo-Pyrmont Precinct and having an average total floor area of not less than 100 square metres.

56. Clause 57 imposes upon the consent authority the following duty:
57. Before granting consent to any proposed development of land in the Residential-Business Zone within the Ultimo-Pyrmont Precinct, the consent authority must take into consideration the planning principles for City West and for the Ultimo-Pyrmont Precinct, the affordable housing principles and the following: · the need for development to provide different kinds of housing, including affordable housing, to ensure that very low, low and moderate income households may continue to afford to live in City West; · the impact of the proposed development on the existing housing within the Ultimo-Pyrmont Precinct for very low, low and moderate income households; · the impact of the proposed development on the existing mix and likely future mix of residential housing stock within City West.

57. Clauses 58, 59, 60 and 61 of the REP contain detailed provisions relating to the need for all developments within the Residential or Residential Business zone within the Ultimo-Pyrmont Precinct to make some contribution (in kind, or by way of cash contribution) towards the provision of "affordable housing".

58. By virtue of cl 62 these clauses do not apply to certain classes of development, including development for the purpose of public housing and development for the purpose of "affordable housing". It is common ground that the proposed development is for the purpose of "affordable housing".

59. SEPP No 1 is another applicable planning instrument. It relevantly provides as follows:

cl 3 This policy provides flexibility in the application of planning controls operating by virtue of development standards in circumstances where strict compliance with those standards would, in any particular case, be unreasonable or unnecessary or tend to hinder the attainment of the objects specified in s 5(a)(i) and (ii) of the Act.

cl 6 Where development could, but for any development standard, be carried out under the Act (either with or without the necessity for consent under the Act being obtained therefor) the person intending to carry out that development may make a development application in respect of that development, supported by a written objection that compliance with that development standard is unreasonable or unnecessary in the circumstances of the case, and specifying the grounds of that objection.

cl 7 Where the consent authority is satisfied that the objection is well founded and is also of the opinion that granting of consent to that development application is consistent with the aims of this policy as set out in clause 3, it may, with the concurrence of the Director, grant consent to that development application notwithstanding the development standard the subject of the objection referred to in clause 6.

60. I adopt the following description of the development from Mr Berkhout's Report (Exhibit 4):

The development proposal which contemplates the demolition of the existing buildings located on the development site and the subdivision of the Sydney Water land comprises the following features: · Demolition of the existing Wreckair Hire buildings, and 2 storey Sydney Water building (within the SPS 2 site) · Construction of 57 residential apartments in an L-shaped building ranging in height from 6-8 storeys above street level. The principal pedestrian access to the apartments will be via a main entrance on Wattle Crescent; · Units are designed as single-loaded units (ie. only one row of units off accessways). The units along the Wattle Street frontage have an external walkway on the eastern side of the building providing access to each unit; · One level basement providing parking for 31 cars, space for the storage of bicycles, and common storage areas for residents. Vehicular access to the car park is proposed off Wattle Crescent. The car park is to be located partially below ground, such that the floor level of the ground floor units are approximately 1 metre above street level; · A landscaped courtyard located in the northern corner of the site; and · Roof terraces on Levels 7 and 8. 25. The building is proposed to be located on the perimeter of the site fronting Wattle Street and Wattle Crescent, reflecting the siting of traditional buildings in City West (a feature of older buildings along Wattle Street, which are built to the street boundary.

61. Numerical aspects of the development are as follows: Site area 1,138.3 m2 Gross floor area 4,663 m2 Floor space ratio 4.1:1 Ground level landscaped area 291 m2 Open space area Roof Decks - 348.5 m (other than ground level landscaping) Balconies (2 m wide) - 481.5 m2 Total - 830.0 m2 Building height · Height to ceiling of topmost floor 21.6 m · No. of storeys 6 - 8 · Street wall height (south-west corner)r 23.8 m to top of corner parapet Dwelling mix and proportion 21 x 1BR (37%) 23 x 2BR (40%) 12 x 3BR (23%) Number of bedrooms 103 Number of dwellings 57 Average unit size 82 m2/ unit Floor-ceiling height of units 2.4 m No. of car parking spaces Disabled 2 Other 29 Total 31

62. As earlier noted, it is common ground that the REP provisions imposing building height limits and floor space ratio controls relevantly constitute "development standards" within the meaning of the EP&A Act and SEPP No 1 and that the Applicant has relevantly made objection under SEPP No 1: Exhibit 2. The terms of that objection are lengthy but must be set forth in their entirety: 4.4.1 INTRODUCTION

The proposed development does not comply with the recently gazetted update to Sydney Regional Environmental Plan (SREP) No. 26 - City West. Specifically the proposed development varies from the following provisions of the revised SREP: · Floor Space Ratio (FSR) · Building height Consequently an objection to SREP No. 26 under SEPP 1 forms part of this application. The grounds for objection are discussed below. 4.4.2 FLOOR SPACE RATIO

The proposed Floor Space Ratio (FSR) of the development is 4:1 which was prepared in accordance with the SREP at the time which imposed no FSR limit on residential development. The revised SREP applies an FSR of 3:1. It is understood that the introduction of an FSR to residential development came about predominantly as a result of the following concerns: · The practice by previous development to treat building envelope and height controls as the only framework for determining gross floor area without references to urban design, amenity and streetscape objectives. · The practice of maximising development yield within the building envelope establishing a built form distinguished by excessive bulk, continuous and oppressive walls and facades and no attention to articulation scale, character and richness to the detriment of the broader urban design objectives for the Ultimo-Pyrmont Precinct. Therefore in preparing this SEPP 1 Objection City West Housing is cogniscent of the concerns that resulted in the introduction of the FSR and has endeavoured to propose a development concept that accommodates these concerns. City West Housing's grounds for objection to the application of the provision are as follows: · The proposed development complies in all respects with the guiding principles contained within the revised UDP. Specifically: - the scale of the proposed development ensures that the public domain, particularly Wentworth Park and surrounding streets is not significantly overshadowed as demonstrated in the shadow diagrams contained within this document. - the building form is modulated within the building envelope to enhance streetscape context, promote visual character and richness and reduce building bulk and visual uniformity. - building bulk, coupled with height and setbacks ensures that all principles with regard to privacy, environment and amenity are met, particularly though the provision of the courtyard. - additional height is provided at the street corner to define the street block generating a visual landmark and clues within the urban environment, assisting legibility as well as streetscape character. - the heritage significance of the adjoining pumping station is not compromised by the proposed development. - views and vistas are identified and maintained where reasonably possible. This is discussed in detail in Section 4.5 below. Vistas through the site are provided and framed by the built form proposed. - the facade of the development is rich in treatment and modelling, particularly in comparison to other contemporary residential developments. - roof design is attractive and enhances, rather than erodes, the skyline. · Therefore the proposed development meets the urban design principles of the UDP, particularly with regard to the articulation, bulk, scale, open space, modulation of roof form and breaking down of building mass. · In other words the proposed development does not attempt to maximise the building envelope, negating the concerns generated by other developments, and consequently negating the need for, and deeming as unnecessary, the imposition of an FSR control in this particular development. · Furthermore the achievement of the urban design principles contained within the UDP is reinforced through the preparation of a block study, for the surrounding development sites. The block study demonstrates that protection not only of the amenity of existing surrounding development but also future development of the north of the proposed development is achievable. The block study is presented in Section 4.5. 4.4.3 BUILDING HEIGHT The proposed building height is 21.6 metres which exceeds the revised SREP height limit of 21.0 metres by a mere 0.6 metres (60 centimetres). To achieve this height and to maintain the number of affordable housing units with the development the ceiling height has been proposed to be 2.4 metres which falls short of the requirement of 2.7 metres. It is understood that the revised building height controls within the Updated SREP were introduced to protect the quality of the public domain. This change came about as a response to the concerns being generated by development at the time as described in Section 4.4.2 above. City West Housing's grounds for objection to the application of these provisions are as follows: · The proposed development height of 21.6 metres to the ceiling of the top floor is not consistent throughout the whole development and is proposed to be located only on the corner of Wattle Street and Wattle Crescent. This reflects City West Housing Pty Ltd's commitment to satisfy the Update changes wherever possible. Thus the exposure of the part of the development above 21.0 metres to surrounding development (of a greater height) is minimal. · The Shadow diagram demonstrates that there is no unreasonable impact on adjoining uses and development. In mid winter the effect of shadows cast by the building are clear of Wentworth Park and all neighbours after 12pm which is, we believe, a totally acceptable situation in the context of the winter season. In fact the adjoining high rise development incurs significantly greater shadow impacts on the proposed development than the other way round. · City West Housing Pty Ltd is cogniscent of the intent behind the imposition of the new height control on development and has endeavoured to design the development to achieve the objectives within the intent. In this regard the design has been undertaken such that the bulk, mass and scale of the development complies in all respects, except height, with the SREP and UDP, resulting in minimal environmental impacts. Height is exceeded only in the corner of the development to the rear, and also achieves urban design objectives with regard to corner articulation. · The portion of the development over 21.0 metres has negligible impact on view corridors out of the adjoining development. Similarly the orientation of the building ensuites that the view corridor and aspects are essentially unimpeded. Further more the Block Study for the remainder of the triangle reinforces the protection of view corridors and aspects above the proposed 21.0 metre height regulation. · Overall the proposed development is consistent with UDP urban design principles to articulate, facades establish a distinctive building corner, step building heights and modulate built form in accordance with the principles outlined in S.4.4.2 above. The outcome is considered to be a good urban design solution for the site. · The proposed development does not attempt to maximise the building height for the site, negating the concerns generated in other developments, and correspondingly negating the concerns for, and deeming as unnecessary, the imposition of a height limit of 21.0 metres in this particular development. · Again reference to the Block Study in Section 4.5 demonstrates the protection of the amenity of not only surrounding development but future development also.

63. Section 4.5 of the Applicant's submission contains a "block study" of the Street Block.

64. The study does not qualify as at "urban development plan adopted by the Minister" within the meaning of cl 27C of the REP. (That provision authorises the consent authority to consent to a building that "exceeds a maximum floor space ratio or a maximum floor space ratio or a maximum building height" in circumstances where such an urban development plan exists).

The Built Form Analysis illustrates that the form and design of the proposed development does not compromise future development opportunities of the adjoining sites to their maximum potential whilst complying with the design principles and objectives of the new REP and UDP. Further, the amenity of the Citywest Housing proposal is not compromised by future neighbouring development.

One of the principal objectives contained within the block study is the equitable maintenance of aspect and views from the adjoining development. As such the block study pays significant attention to location of view corridors across the triangle such that views from the majority units are retained. The corridor opportunity presented by the heritage Pumping Station, in particular, is capitalised upon in the block study (refer to model) to generate an equitable view sharing framework.

F. IS THE APPLICANT'S SEPP No. 1 OBJECTION WELL FOUNDED?

One of the express preconditions for the exercise of the dispensing power conferred by cl 7 of SEPP No. 1 is that "the consent authority is satisfied that the objection is well founded". The "objection" is relevantly the objection referred to in cl 6 of the Policy, namely a written objection that "compliance with the development standard is unreasonable or unnecessary in the circumstances of the case" and "specifying the grounds of that objection".

Ordinarily an objection will be found to be well founded if the grounds of the objection are made out or substantiated. Ordinarily those "grounds" will be the grounds stated in the written objection. However, it may be open to an applicant, on the hearing of an appeal, to support the objection by additional grounds to those relied upon as the grounds for the written objection. I understand the Applicant in the present case to have so conducted its appeal by relying upon facts associated with the fact that the proposed development constitutes "affordable housing", in terms of the REP, namely (i) the corporate charter and public character of the Applicant, and (ii) financial considerations affecting the Applicant's proposed development. Evidence of such associated facts was received subject to the Council's objection that such facts (concerning the economic feasibility or viability of a proposed development) were irrelevant to the determination of the Applicant's development application. I shall later return to adjudicate upon this matter. However, in the first instance, I shall confine my consideration of the Applicant's SEPP No. 1 objection to the grounds stated in the written objection (although as will be revealed, the Applicant's written submission to the Council (Exhibit 2) containing its SEPP No 1 Objection also included an independent justification of the proposed development based upon the fact that it was providing "affordable housing").

Those grounds indicate that the principal argument being advanced by the Applicant was that the proposed development, by virtue of its designed physical features, fulfilled the objectives of the floor space ratio control and the height limit control. This argument is founded upon the stated assumption that the floor space ratio control and the lower height limits were introduced into the REP by the 1999 Amendment to avoid the consequence, hitherto experienced, of residential flat development maximising "development yield within the building envelope" producing "excessive (building) bulk, continuous and oppressive walls and facades" with "no attention (being given) to articulation, scale, character and richness" to "the detriment of the broader urban design objectives for the Ultimo-Pyrmont Precinct".

In this respect, the Applicant's SEPP No 1 objection was based upon a well established ground. More than 10 years ago the then Chief Judge of the Court said in Legal and General Life of Australia Ltd v North Sydney Council (1989) 68 LGRA 192 at 202:

To date the Court has had no occasion to attempt to define the limits of the dispensing power based upon an objection that compliance with the standard is unnecessary or unreasonable in the circumstances of a case. It has expressed the opinion that an objection is well-founded if it is shown that the underlying purpose of the development standard is satisfied by the particular development proposed: see SCMP Properties Pty Ltd v North Sydney Municipal Council; see also Hooker Corporation Pty Ltd v Hornsby Shire Council (Land and Environment Court, New South Wales, 7 June 1986, unreported). But later cases have demonstrated that the identification of the underlying purpose or object of the standard and an examination as to whether that purpose or object is satisfied by the proposed development is only one of the tests: see also North Sydney Municipal Council v Parlby (Land and Environment Court, New South Wales, 13 November 1986, unreported); see also North Shore Gas Company v North Sydney Municipal Council (Land and Environment Court, New South Wales, 15 September 1986, unreported) in which Stein J held that compliance with a development standard was unnecessary and unreasonable for the reason, inter alia, that the standard had been virtually abandoned or destroyed by council's own action.

More recently, Handley JA in Fast Buck$ v Byron Shire Council (1999) 103 LGERA 94 has recognised that basis for such an objection when he said at 97:

Before the assessor the appellant attempted to establish that compliance with the development standard was unreasonable or unnecessary because the standard itself was unreasonable or unnecessary. There were other ways in which an objector under SEPP 1 might present his case. He might accept that the standard was both reasonable and necessary, but seek to establish that enforcing compliance in his case would be unreasonable or unnecessary. This would be a sensible approach where the departure from the standard was modest, where its underlying purpose would not be prejudiced, or where it would be fulfilled in another way.

Accordingly, the first question to be considered is whether the Applicant has substantiated its assumption (as expounded in its written objection) concerning the purpose or object of the relevant floor space ratio control and height control imposed by the 1999 Amendment to the REP.

Considerable documentary evidence was adduced concerning the background to, and the processing of, the 1999 Amendment to the REP. That evidence establishes that it was the Council that instigated the revision of the REP, as is evidenced in its written submission to the Minister dated February 1997. (Exhibit 11).

That submission in Section 2 identified "the problem" occurring in new developments that had emerged in the implementation of the REP since its origins in 1992.

The problem thus identified included the excessive "height, bulk and intensity" of new development. In its detailed elaboration of "the problem" reference is made to the absence of floor space ratio controls for residential development. These references are included in the following passages:

SREP 26 has no FSR control for residential development in Ultimo/Pyrmont. This invites the development industry to extract the maximum possible floor space from the project, over and above many other considerations. In this market, developers argue that financial return is always greater from a larger number of units with lower amenity compared to a lesser number of units with greater amenity. Council is concerned about the long-term impact of this short term perception in strata title developments in Ultimo/Pyrmont.

The lack of FSR controls contribute to box like designs which simply maximise the height envelope. The architecture produced under these conditions is repetitive, and shows little variation and scale differentiation to the building volume. The result has been a failure to provide an attractive residential neighbourhood for long term residents, even though it may provide acceptable accommodation for short stay residents, where amenity is not the prime concern.

The Council's submission goes on in Section 3 to proffer " the solution " to the problem. The solution included the introduction of floor space ratio controls for residential development and lowering permissible maximum height of buildings, as is shown in the following extracts:

The introduction of FSR controls for residential development and the amendment of certain existing controls will not significantly impede the achievement of development targets for the area, but will protect and improve the amenity of existing inhabitants, and deliver a better environment for future residents and workers.

In 1995, the Urban Development Plan was updated. Although this assisted in enhancing the amenity of the precinct, the application of the controls of the UDP still results in building forms which are inappropriate to Ultimo/Pyrmont in scale, bulk and massing.

Council has undertaken an urban design analysis of the entire Ultimo/Pyrmont area and formulated revised height, FSR and Landmark location controls. Application of these controls will promote a more appropriate building scale and bulk, which is essential in establishing urban forms of human scale and creating a sense of place and livability in Ultimo/Pyrmont.

In early 1998, the Department of Urban Affairs and Planning published its " Review of Planning Controls for City West " (the Review) inviting public comment on the proposed updating of the REP and UDP.

The Review identified the aims of the proposed changes, including - " improving controls for residential development " "amending heights where required"

The Review identified " key issues " including - " residential quality, amenity and density " "height controls"

The draft amendments to the REP and UDP were placed on public exhibition for six weeks from 20 April to 1 June 1998.

The Council made a submission to the Department in response to the public exhibition, following its adoption of the report to the Council's Planning Committee prepared by the Senior Strategic/Residential Planner (Mr G Edwards). Exhibit B (Tab 3). That report repeated the theme that the existing planning controls had "resulted in building forms considered inappropriate to the scale and massing of Ultimo/Pyrmont".

The express aims of the 1999 Amendment contained in cl 2 do not shed much further light on the question under present discussion. They include the following aims:- (a) make further provision for the redevelopment of City West by updating and improving planning provisions, particularly for the Ultimo-Pyrmont Precinct of City West, and (e) alter certain maximum building heights for land in the Ultimo-Pyrmont Precinct to provide a better transition between heritage items and conservation areas, and new development and the street pattern, and (g) update provisions relating to residential development so as to improve the quality of residential development in the Ultimo-Pyrmont Precinct, and

The documentary evidence so far discussed supports a finding that a principal purpose or object of introducing into the REP a floor space ratio control in respect of residential development, in concert with reducing maximum permissible building heights, was to avoid excessive bulk and scale of buildings. Such a finding is corroborated by other documentary material eg (i) the letter to the Council dated 2 February 1999 from the Department of Urban Affairs and Planning and (ii) the report to the Council's Planning Committee dated 8 February 1999 from the Council's Specialist Planner (Mr Soo).

The Department's letter includes the following statement:

Although the FSR exceeds the proposal in the draft REP, it is not excessive in relation to other approved housing schemes in Ultimo/Pyrmont which led to the proposed refinement of the REP (which are in the vicinity of 7:1). Moreover, the proposal provides superior architecture and amenity to those schemes .

Included in the Council's Specialist Planner's Report are the following statements: 28. Council has been concerned with the scale and bulk of residential development that was achievable under SREP in the absence of an FSR control

…………. 36. There is no current FSR control for residential development in Ultimo/Pyrmont.

This often results in applicants attempting to extract the maximum possible floor space from projects, over and above many other considerations, based solely on building envelope controls.

Having regard to those findings, which I am prepared to make on the basis of the documentary evidence, I am satisfied that the Applicant has substantiated the major premise upon which its written SEPP No. 1 objection was founded, namely that the relevant floor space ratio control (and allied maximum building height control) was introduced into the REP by the 1999 Amendment to avoid the incidence of developments maximising development yield within the building envelope (created merely by the stipulation of maximum building heights unsupported by appropriate floor space ratio controls) resulting in excessive building bulk, continuous and oppressive walls and facades with no attention to articulation, scale, character and richness.

This finding leads to the next question to be considered, namely, whether the Applicant has established that its proposed development fulfils or satisfies the underlying purpose or object of the relevant development controls by presenting a resultant building form that avoids the undesirable characteristics associated with excessive bulk and scale.

On this issue, the Applicant has adduced a considerable body of expert evidence that compliance with the relevant development standards is unnecessary in the circumstances of this case because the proposed development, by virtue of its architectural character and building form, avoids the appearance of excessive building bulk and scale, and thereby fulfils or satisfying the underlying purpose or object of both the floor space ratio control and the maximum building height control imposed by the REP.

Mr Russell Prescott, Architect, responsible for the design and presentation of the proposed development, in his written report (Exhibit 3) states the following opinion:

The form of the building is guided by the urban design envelope relationship to the heritage building and the shape of the site and the boundaries. This allowed and established the variation to height and form. The ends, corner and key elements of the facades are articulated to break up long wall masses to apartment terraces and roof variations modulates height within the UDP envelope.

We believe this approach reduces the perceived massiveness of the building.

Mr Brett Newbold, Consultant Architect and Planner, in his written report (part of Exhibit 8 ) makes the following appraisal of the " scale " and " bulk " of the proposed development:

3.3 Scale The proposed development adopts a configuration of street walls that wrap a central courtyard, reflecting the overall urban design character of Ultimo-Pyrmont's traditional bond store developments. The development also incorporates design details that introduce a human scale, important for vantage points at street-level: - both wings and the corner tower are built to the street alignment, reinforcing the strong form of bond store developments marking the western edge to this precinct (along Wattle Street); - the building demonstrates significant variations in overall height between the two wings and the corner tower element, providing a contemporary interpretation of traditional bond store development that incorporates varied parapet alignments and roof forms; - these variations provide a vital and dynamic building silhouette, and modulate the scale of the building relative to street-level perspectives - the complex composition of facades, incorporating significant balcony structures, breaks the multi-storey street walls into a pattern of smaller elements with an identifiable human scale. 3.4 Bulk and articulation

The complex composition of multi-storey facades provides visibly-significant articulation, substantially reducing the apparent bulk of the proposed building, but also providing an architecturally-significant termination for the Wattle Street street wall : - walls are composed as solid panels punctured by a variety of window shapes, or a double curtain of semi-transparent glazing that provides a vital and dynamic composition of sunscreens, glass and metal framing, shadows and sunlit surfaces; - variation of roof planes and structures reinforces the visually-complex composition of walls, casting a complex pattern of shadows that diminish the building's apparent bulk; - the principal public frontages present as a composition of four or five individual vertical structures, each with a different overall height, capped by roof forms that are both individual and distinctive (Wattle Crescent wing, the corner tower, Wattle Street balconies, Wattle Street side wall and the Pumphouse balconies).

Mr Vincent Berkhout, Consultant Planner, in his written report ( Exhibit 4 ) adopts Mr Newbold's appraisal of the scale and design of the proposed development opining that " the building has been designed with particular attention to facade treatment, building modulation, texture and articulation such that the proposal will meet the objectives underlying the FSR control." : par 134 .

Professor Winston Barnett, Architect, in his written report (Exhibit 9), expressed the opinion that "the design (of the proposed building) is of considerable merit and in my opinion superior to much of what has been built in Sydney and in its metropolitan area over the past decade". In relation to the proposal's exceedance of the maximum height control he states:

Many urban buildings like sculpture are best seen in the round and so with this free standing building great care has been taken in its detailed design that its form responds sensitively to its setting and when viewed from all sides. It is not a simple mass of building built to exploit the site nor has it been stepped in profile to meet a standard design formula. Rather its sophisticated form is the product of a careful analysis of the design requirements that a residential building needs meet and in response to properly relating it to other nearby buildings and streets. Therefore this building is designed to a variety of heights to best fit its urban context. Presently it is slightly above the arbitrary limit of 21 metres but there appears little merit in reducing the height of the building. The reduction would be in environmental and urban design terms nugatory. Conversely there is a case for increasing the height of the building to increase the floor to ceiling heights as originally designed which would not adversely affect surrounding buildings.

In relation to the proposal's exceedance of the floor space ratio control he states:

Here a FSR of 3:1 is required. But as this detailed design shows to work within that arbitrary limit would be to unduly misuse the site and not develop it to its best potential as has been done in this case, resulting in a fine piece of urban design and a high quality residential building.

The imposition of the FSR of 3:1 on this site would be detrimental to its proper development. The submitted design shows that within the calculations adopted by the Sydney City Council to meet proper environmental and urban design standards a FSR of 4:1 is appropriate for this particular site.

Finally, there is the evidence of the opinion of the Department of Urban Affairs and Planning. This evidence is found in the documentary material ( Exhibits 8 and 10 ) and in the oral testimony of Mr Alan Davison, the Director of the Department's Sydney Region Central Office, responsible for processing the 1999 Amendment to the REP and administering the REP.

In the Department's letter dated 2 February 1999 to the Council (responding to the Council's request for comment on the Applicant's development application), the following statements are made in respect of the proposal's non-conformity with the relevant controls, which at the time were the publicly exhibited draft version of what was to become the 19999 Amendment:

The proposal's non-conformity with the draft REP Amendment No. 8 is on height and FSR. The height variation is only in the S-W corner of the site by 3 m for 4 units. This is a minor exceedance of a draft proposal not yet adopted and is done in a manner in accordance with the design principles in the UDP of corner emphasis. However, the bulk of this corner could easily be reduced by reducing the parapet and architectural features in this location without reducing the number of units.

Although the FSR exceeds the proposal in the draft REP it is not excessive in relation to other approved housing schemes in Ultimo/Pyrmont which led to the proposed refinement of the REP (which are in the vicinity of 7:1). Moreover, the proposal provides superior architecture and amenity to those schemes.

It should also be considered that the draft REP foreshadowed that both heights and FSR could be increased as a result of a block study. The application has undertaken a preliminary block study and heritage curtilage study of the adjoining heritage pumping station. These studies indicate that the proposal does not compromise, prejudice or predetermine future redevelopment of the remainder of the triangular block. It can be part of an appropriate block approach.

Three refinements to the proposal are required: (i) ensure disabled access at the Wattle Cres entrance; (ii) reduce the parapet and roof heights on Wattle Street/Wattle Cres corner; and (iii) revise the landscaping of the communal courtyard to provide a softer environment.

With these refinements the Department supports this proposal as a positive response to the planning and design provisions for City West. It will provide a good addition to the Affordable Housing Program providing long term accommodation for a mix of households and playing a major role in rebuilding a residential community in Ultimo-Pyrmont.

(It should be noted that following the Council's decision taken on 8 February 1999, the Applicant amended the height of the proposed building by a combination of three design changes (i) lowering the roof slope; (ii) lowering the parapet height; and (iii) reducing the floor to ceiling height of each floor from 2700 m to 2400 m.)

Next, there is the expression of opinion in the Department's comments provided to each member of the Central Sydney Planning Committee (prior to that Committee's determination refusing consent to the Applicant's second development application). Those comments included the following in respect of the relevant height and FSR controls (which by this stage had become applicable controls under the REP):

Height The exceedence of height is only 0.6 m for less than 1/2 the building. The rest is under the maximum by 1.5 m and 4.4 m. The height can be reduced to 0.1 m by lowering the building into the ground by 0.5 m.

FSR - The proposal does not comply but the SEPP 1 objection is supported due to: (i) overall compliance with the majority of provisions in the REP and UDP; (ii) the design excellence; (iii) the ESD innovations; and (iv) not prejudicing redevelopment of adjoining land in the street block.

Finally, there is the Department's written advice to the Court (Exhibit 8) which expresses the following opinions:

I wish to express the Department's support for the above proposed development.

The subject development proposal achieves a high standard of design that satisfies the spirit and intent of Sydney Regional Environmental Plan No. 26 - City West (REP) and the associated Urban Development Plan - 1999 Update (UDP) and will sit comfortably within its context. Strict compliance with the relevant development standards for height and floor space ratio is considered unnecessary given the high standard of design and compliance with the principles of the REP and general compliance with the UDP.

The proposal meets all the major planning and design principles of the REP and UDP, and the majority of the quantitative and qualitative provisions. The key compliance areas are urban design, dwelling mix, residential privacy, residential amenity, car parking provision, solar access, private open space, viewsharing, ecological sustainable development, affordable housing program, and heritage conservation. The bulk and scale provides an appropriate built form relationship with the adjoining buildings ie the Sydney Water facility and the Parkview Tower, and with Wattle Street built form, Wentworth Park and the foreshore generally. The north facing units are appropriate instead of a blank party wall for the foreshore. The setback from the heritage item is sufficient in conjunction with the operational curtilage and the easement for light and air.

The scheme provides good articulation, modulation, facade compositions, roof elements and architectural detailing to present a high standard of appearance.

The major non-conformity with the planning provisions is with height and FSR. The height exceedence by 0.6 m is minor and a significant proportion of the building is under the REP height by approx 1.5 m and 4.4 m. Due to the overall compliance with planning and design provisions, and as the proposal does not prejudice redevelopment of the rest of the street block to the east, the non-compliance with height and FSR is not of concern.

The Council did not call any architectural evidence in rebuttal of the weight of architectural evidence that had been adduced by the Applicant to the effect that by virtue of the design and built form of the proposed building, the identified (and substantiated) object or purpose of the relevant standards prescribed by the REP was fulfilled or satisfied by the proposal, so as to render unnecessary, compliance with those standards.

Rather, the Council called evidence from Ms Sureda, a Planning Consultant, whose report (Exhibit C) did not directly address the Applicant's SEPP No 1 objection (principally, so it appears, because her brief did not include the Applicant's SEPP No 1 objection, which was not formally submitted to the Council until 30 August 1999).

Ms Sureda's Report provides her appraisal of the proposed development (including the fact of its exceedance of the relevant maximum height and floor space ratio controls) as a matter of planning merit. Ultimately, the fate of the present proceeding will depend upon an evaluation of the planning merits (vide EP&A Act s 79C). However, before that ultimate evaluation arises, there must first be a finding that the SEPP No 1 objection is well founded. So much flows from the express language of cl 7 of SEPP No 1, "(W)here the consent authority is satisfied that the objection is well founded and ……". To proceed otherwise would be to invite the risk of submerging the logically anterior question (whether the objection is well founded) in the ultimate question on the planning merits (whether development consent should be granted). Such an approach would subvert the intended operation of SEPP No 1.

Nonetheless, I consider some of Ms Sureda's opinions on the planning merits to be relevant to this logically anterior question. These opinions can be summarised as follows: (i.) The reduced maximum permissible height control and the allied floor space ratio control reflect up to date planning standards which recognised that recent past developments within the Pyrmont/Ultimo Precinct had not responded sensitively to locational and urban design requirements, and needed to be reinforced. (ii.) The proposed development's exceedance of the new building height and floor space ratio controls had not been justified. (iii.) The Applicant, by choosing not to prepare an urban development plan for the block, as contemplated by cl 27C of the REP, had deprived its proposal of the opportunity to exceed those controls, conformably to the REP.

These opinions are consistent with the briefly stated reason for decision of the Central Planning Committee when refusing consent to the Applicant's second development application "not to accept" the Applicant's SEPP No 1 objection, namely that "both standards are considered reasonable and necessary in this instance". (No SEPP No 1 objection had been involved in the Council's determination of the original development application because at the date of determination, the REP 1999 Amendments were only in draft form.)

This briefly stated reason for the Committee's decision is not elaborated upon in the evidence. However, it may be inferred that the Committee in so concluding, did not accept the advice of the Department of Urban Affairs and Planning supporting the Applicant's SEPP No 1 objection. I mention this matter because of the particular overarching responsibility conferred upon the Director of the Department in relation to the operation of SEPP No 1. That responsibility involves the function of concurring (or not concurring) in the grant of development consent "where the consent authority is satisfied that the objection is well founded" (cl 6 of SEPP No 1) and in discharging that function, the Director is required by cl 8 to take into consideration - (a) whether non-compliance with the development standard raises any matter of significance for State or regional environmental planning; and (b) the public benefit of maintaining the planning controls adopted by the environmental planning instrument.

In the present case, the Department, in expressing the following opinion in its letter to the Court (Exhibit 8), has in my opinion, in effect, granted its concurrence under SEPP No 1 to the grant of development consent:

The subject development proposal achieves a high standard of design that satisfies the spirit and intent of Sydney Regional Environmental Plan No. 26 - City West (REP) and the associated Urban Development Plan - 1999 Update (UDP) and will sit comfortably within its context. Strict compliance with the relevant development standards for height and floor space ratio is considered unnecessary given the high standard of design and compliance with the principles of the REP and general compliance with the UDP.

It may be assumed that the Department had not previously granted its concurrence (instead it merely had communicated to the Council its support of the Applicant's SEPP No 1 objection) because the Council had determined to refuse to grant development consent, and hence the question of concurrence did not strictly arise: see EP&A Act s 79B(1) .

In the present case, I regard the Department's grant of concurrence to be a particularly significant matter, not only because of its overarching responsibility under SEPP No 1 (cf: the observations of Handley JA in Fast Buck$ at 100) but even more so in the present case, in view of the fact that the relevant development standards are contained in the REP (the preparation of which was the responsibility of the Department: see EP&A Act s 40 to 51).

There is, in my opinion, yet another involvement of the Department in the administration of the REP that underscores the significance of the Department's grant of concurrence in the present case, namely the fact (noted earlier) that the REP nominates the Minister as the "consent authority" in respect of the development of (i) all waterfront land on Pyrmont peninsula, (such land commencing immediately north of the Street block); and (ii) land situate immediately south of the development site along Wattle Street down to Fig Street (including the land on the eastern side of Wattle Crescent developed by the "Parkview Towers" development). There is, in my opinion, a twofold significance for the present case in the Department's involvement in the administration of the REP in relation to development of these designated lands, which places the Department in a position of particular awareness and advantage in assessing the Applicant's proposed development of the development site (particularly in the light of the two factors stipulated in cl 8 of SEPP No 1) namely - (i.) the advisory responsibility and role of the Department in the determination of development applications by the Minister (as nominated consent authority) made in respect of lands physically proximate to the development site; and (ii.) the fact that the REP does not contain any floor space ratio controls in respect of any residential development of these lands (the development of these lands generally requiring the existence of a Master Plan under cl 40, in circumstances where such a Master Plan may, by virtue of cl 48A, adopt height controls that exceed the maximum building height controls imposed by cl 23).

In my opinion, this twofold significance of the Department's involvement in the administration of the REP is very apt to properly inform the Director's mind and judgment in discharging the concurrence role in terms of cl 8 of SEPP No 1 in the present case (that I have held to have been effectively exercised in favour of the Applicant's development proposal by virtue of the Department's written advice to the Court contained in Exhibit 8).

This is so, notwithstanding the apparent anomaly that the Street Block (including the development site) constitutes an isolated island, surrounded by the designated lands, in respect of which the REP nominates the Minister as the consent authority, and imposes no floor space ratio control for any residential development of the lands. Rather, the involvement of the Department in the administration of the REP, combined with the Director's role under SEPP No 1, goes far in overcoming the planning anomaly and the potentially discriminatory consequences of that anomaly.

However, to return to the matters raised by Ms Sureda's opinions, I do not find them (either collectively or individually) to be of such weight as to subvert the preponderance of expert opinion, which I accept, in support of my finding that the Applicant's SEPP No 1 objection is well founded.

In so concluding, I think that Ms Sureda has not given sufficient recognition to the potential scope of the operation of SEPP No 1, even in respect of the relevant development standards imposed by the very recent 1999 Amendment to the REP. That this is the case, is in my opinion, made very clear by Ms Sureda's opinion based upon the fact that the Applicant has not resorted to cl 27C of the REP by declining to prepare a block urban development plan for adoption by the Minister which might contain controls allowing for the exceedance of the otherwise applicable maximum building height control or floor space ratio control.

The opportunity provided by cl 27C of the REP for action to be taken pursuant to the REP so that an approved development may exceed the relevant height and floor space development standards does not, in my opinion, exclude the operation of SEPP No 1. The basis for the operation of SEPP No 1 is far more general than the basis for the operation of cl 27C. Moreover, SEPP No 1 operates in respect of a proposed development of a development site and thus is available to the Applicant, whereas action under cl 27C of the REP would require the concurrence of all persons having an interest in the several parcels of land that form the Street Block.

In my judgment, it has been established that the Applicant's SEPP No 1 objection is well founded. In so concluding, I accept the preponderance of expert opinion that the proposed development fulfils the underlying purpose or object of the floor space ratio control and the maximum building height control. Additionally, in the case of the maximum building height control, I am satisfied that the purpose or object of that control is not prejudiced by the proposed development, because of only the minor degree of exceedance of the prescribed maximum height, namely by 600 mm in respect of that component of the building that contains eight floors (involving some 40% of the overall building footprint and approximately 50% of the building facades presenting to both Wattle Street and Wattle Crescent) where the remaining components of the building containing seven floors and six floors respectively attain heights of 19.2 m and 16.6 m respectively, well below the prescribed maximum height of 21 m.

These findings stand, both as a matter of logic and as a result of my evaluation of the evidence, notwithstanding the fact (if it be the fact, by dint of the opinion of Ms Sureda and the earlier opinion of the Central Sydney Planning Committee) that the height control and floor space ratio control imposed by the 1999 Amendment to the REP are considered to be "reasonable and necessary" standards.

In Fast Buck$, Handley JA at 97 discussed various ways in which an objector under SEPP No 1 might present his case (including a case where no challenge was made to the standard being reasonable and necessary). His Honour said:

Before the assessor the appellant attempted to establish that compliance with the development standard was unreasonable or unnecessary because the standard itself was unreasonable or unnecessary. There were other ways in which an objector under SEPP 1 might present his case. He might accept that the standard was both reasonable and necessary, but seek to establish that enforcing compliance in his case would be unreasonable or unnecessary. This would be a sensible approach where the departure from the standard was modest, where its underlying purpose would not be prejudiced, or where it would be fulfilled in another way.

In the present case, the Applicant's SEPP No 1 objection has not challenged whether the relevant development standards are both reasonable and necessary, but the Applicant has established its case that compliance with the relevant standards is unnecessary , because the proposed development either fulfilled, or did not prejudice, the underlying purpose or object of the relevant standards, being the particular purpose or object which the Applicant's evidence has established.

For all the foregoing reasons I am satisfied that the Applicant's SEPP No 1 objection is well founded.

This conclusion means that it is strictly unnecessary to consider the alternative case for relief under SEPP No 1 advanced by the Applicant, at the hearing, namely that the affordable housing objectives of the REP could not be achieved in respect of the proposed development unless there was a relevant dispensing with the height control and floor space control imposed by the REP (1999 Amendment).

In respect of this alternative case it will be recalled that I received evidence from Mr Richard Perkins, General Manager of the Applicant, but the evidence was received subject to the Council's objection on the grounds of relevance. The basis for the Council's objection was that the questions of the economic feasibility or viability of a proposed development or of economic considerations affecting a proposed developer, were legally irrelevant to the determination of a development application in terms of the EP&A Act. No authority was cited in support of the Council's submission, but as will presently appear, there are many statements in the decided cases that appear to support the Council's submission.

For completeness (particularly since the evidence was provisionally admitted) and because it raises an important point of general planning principle, I think that I should express my views on the question of the admissibility of the Applicant's evidence concerning economic considerations of the proposal, as affordable housing development expressly mandated by the REP. These views will include consideration of the Applicant's alternative case for relief under SEPP No 1 based upon economic considerations.

G. RELEVANCE OF ECONOMIC CONSIDERATIONS PERTAINING TO THE PROPOSED DEVELOPMENT

In my judgment, Mr Perkins' evidence concerning economic considerations of the development proposal is admissible in the present proceedings because it is relevant to:- (i.) the evaluation of the planning merits of the proposal in terms of the EP&A Act s 79C and in particular, because it is relevant to "the social and economic impacts of the proposed development in the locality" (subsection (1)(b)) and "the public interest" (subsection (1)(e)); and (ii.) the Applicant's alternative case for relief under SEPP No 1.

Before discussing my reasons for these conclusions, I should briefly note the scope of Mr Perkins' evidence, which was not challenged, and which I accept: (i.) The Applicant was incorporated in June 1994 as a non-profit housing organisation for the purpose of implementing the City West Affordable Housing Program established under the REP. It is the only qualified organisation under the Official Program. (ii.) More particularly, the object of the Applicant is to provide affordable rental housing to "very low, low and moderate income households". (iii.) The Applicant does not distribute any profits; any surplus of income over expenditure being applied in furtherance of the Applicant's objectives. (iv.) The Applicant currently owns 221 residential units, all of which are tenanted and maintains a waiting list of 550 eligible applicants seeking tenancy of affordable housing. (v.) The proposed development which will provide 57 residential units is considered "critical" to the Applicant achieving its objectives under the Affordable Housing Program. (vi.) Any forced reduction in the number of units (say by 15) in order to comply with the 3:1 floor space ratio control of the REP would increase the unit cost of the project beyond the limit currently fixed by the Applicant's approved three year Business Plan and may result in the Applicant not being able to proceed with the project for economic reasons. (vii.) The development proposal represents "one of the last opportunities" for the Applicant to secure comparable land in the Ultimo - Pyrmont Precinct "at a price which will allow construction of residential units at a reasonable cost". (viii.) Not to proceed with the project would limit the Applicant's ability to fulfil its objectives under the Affordable Housing Program with consequent detriment to the housing needs of eligible prospective tenants on the Applicant's waiting list.

According to the "Revised City West Affordable Housing Program" adopted on 21 July 1996 and embodied in the published document prepared by the Department of Urban Affairs and Planning, the "provision of affordable housing in City West is a fundamental component of planning for the area".

The Affordable Housing Program contemplates "over the next 30 years" a rental stock of up to 600 units of affordable housing for "very low, low to moderate, and moderate households" in the Ultimo - Pyrmont Precinct, within the context of an overall estimated housing stock of some 7500 to 9000 units.

Generally speaking, I consider Mr Perkins' evidence to be a more moderate version of the Applicant's written submission to the Council (Exhibit 2 ) which, in addition to containing the Applicant's SEPP No 1 objection that I have earlier recited and discussed, contains in section 4.6 a separate submission under the heading "Achievement of Affordable Housing, Social and ESD Objectives". That submission includes the following content: · City West Housing (CWH) Pty Ltd is committed to providing affordable housing and its feasibility investigation for the site over the last 2 years confirmed that affordable housing could be achieved on the site under the statutory planning controls (SREP and UDP) at the time. City West Housing Pty Ltd has been undertaking planning on this site for a considerable time and the new control of 3:0:1 places a significant financial constraint on the development on the land and would prohibit the achievement of affordable housing. · An FSR of 3.0:1 is both unfair and unrealistic in comparison with other residential development constructed in the vicinity. CWH is finding it increasingly difficult to meet the charter (and statutory role) of providing affordable housing in the Ultimo - Pyrmont Precinct to meet social and community objectives contained in the urban renewal initiative within the area. · The majority of CWH tenants have long standing connections with the Ultimo-Pyrmont areas. If it were not for the availability of affordable housing, many of these households would be forced to move to the fringes of Sydney due to increasing inner city rents. Furthermore, CWH has a waiting list of an additional 500 households currently living in unsuitable accommodation (i.e. overcrowding, cost of rent etc) causing significant housing stress). · Due to increased cost of development land any reduction in the number of units in the proposed scheme will threaten the feasibility of the whole proposal. This will impact greatly on CWH's ability to meet the current high demand and the future demand. · Since City West Housing's first affordable housing project in 1995 land costs have risen by 384%. This is partly as a result of a general upturn in global land values in Sydney, but also, and more significantly, due to the success of the Ultimo Pyrmont urban renewal initiative to attract private investment. (Refer to Fig 1). · The new FSR significantly reduces the potential development yield, and correspondingly increases unit cost, which would result in the project not proceeding. An increasingly scarce opportunity to provide affordable housing for the community would be lost. Diminishing land availability and increasing land costs provide few, if any, alternative locations. · The proposed development yield is therefore vital and essential for City West Housing to meet its charter and contribute to the population diversity of Ultimo/Pyrmont. Most importantly however the FSR is required to meet the affordable housing objectives contained within the SREP, which cannot be achieved with the application of an FSR of 3:1.

Therefore, quite simply, the achievement of SREP No. 26 Affordable Housing objectives cannot be achieved by application of the FSR and Height controls. To achieve a yield which enables affordable housing to be feasible and simultaneously comply with SREP No. 26 would require significant relaxations to UDP controls. This would in turn create an unacceptable and poor urban design outcome which City West Housing does not believe is in the best interest of either its future tenants or existing surrounding residents.

If this submission is taken as providing an alternative basis or ground for objection under SEPP No 1 (as I would find to be the case) there can be no doubt that Mr Perkins' evidence is relevant to that alternative objection under SEPP No 1.

As I have earlier indicated, Mr Perkins' evidence adopts a more moderate prognosis, than does the Applicant's submission to the Council, on the likely fate of the development proposal, if it were necessary to reduce the number of residential units in the building in order to comply with the floor space ratio control. However, even Mr Perkins' more moderate opinion on the probable jeopardisation of the Applicant's development proposal, if it were necessary that it comply with the current floor space ratio control, provides a legitimate ground for objection under SEPP No 1. A paraphrase of the objection is to the following effect:

If it were necessary for the proposed development to comply with the relevant development standards, there is the likelihood of a reduction in the number of units from 57 to 42; that reduction in units would significantly raise the per unit cost of the proposal, exceeding the upper cost limit fixed by the Applicant's current Business Plan; creating a real risk to the economic feasibility of the proposal; with the probable result that the Applicant would not proceed with the proposal to the obvious detriment of the housing needs of prospective eligible tenants under the Affordable Housing Program established by the REP.

What then is the force of the Council's objection that economic considerations central to the aforesaid process of reasoning (urged by the Applicant in support of its alternative case for relief under SEPP No 1) are irrelevant planning considerations rendering the evidence wholly inadmissible?

In answering this question, it may be necessary to distinguish between the two identified separate issues in respect of which the evidence may be held to be potentially relevant, namely (i) the alternative ground for objection under SEPP No 1, and (ii) the EP&A Act s 79C.

At first glance, it would appear to be clear beyond argument that the evidence is relevant to the SEPP No 1 objection, it being recalled that SEPP No 1 does not contain any express limit on the scope of grounds for objection. However, it may be accepted that in exercising its statutory discretion under cl 7 of SEPP No 1 to be satisfied that the objection is well founded and the granting of development consent is consistent with the aims of the Policy, the consent authority will be confined to "proper planning considerations": cf the following passage from the judgment of Cripps CJ in Legal and General Life at 203 (expressly approved by the Chief Justice on appeal see 69LGRA 201 at 203):

The discretion vested in councils under SEPP No 1 is wide and, subject to limitations to be found in the instrument itself and in its relation to the E nvironmental Planning and Assessment Act , is unconfined. The express limitation is that the council must be of the opinion that the objection is well founded and the grant of consent is consistent with the aims set out in cl 3 of the policy. The implied limitation is that the discretion must be exercised by reference to planning considerations the width and generality of which is to be found in s 5 and s 90 of the Environmental Planning and Assessment Act . The above interpretation of the width of the discretion derives essentially from SEPP No 1 itself, the validity of which was not challenged. Moreover, I can see no reason in principle why the discretion should not be wide. The purpose of SEPP No 1 is to provide flexibility in the decision making process.

Thus, even in respect of relevance to the alternative objection under SEPP No 1, the Council's general objection to the admissibility of evidence must be resolved because, in effect, it asserts that economic considerations are not a proper planning consideration. More particularly, that objection is that economic considerations pertaining to a proposed development or to the particular developer are not relevant to the determination of a development application in terms of the EP&A Act s 79C. As I have mentioned, that basis for objection is supported by statements found in some of the decided cases and it is necessary to consider them.

The question was more emphatically and categorically resolved in decisions on the scope of town planning legislation in New South Wales that predated the EP&A Act. (That legislation was found principally in the provisions of the Local Government Act 1919 Parts XII and XIIA).

Thus, in a land subdivision case, Gosford Shire Council v Anthony George Pty Ltd (No 2) (1968) 16 LGRA 165 Else-Mitchell J held that the Board of Subdivision Appeals fell into legal error in considering "the economic position of a subdivider or the economics of a subdivision": at 167.

His Honour surveyed the decided cases in the Land and Valuation Court and concluded at 167:

(F )or the most part, the current of authority in this Court is opposed to the admission of evidence of economic factors in applications or appeals relating to the subdivision of land under Part XII of the Local Government Act .

In a development appeal, decided by the Land and Valuation Court four years later, J M Watson and Associates v Auburn Municipal Council (1972) 1 NSWLR 84, Else-Mitchell J citing his earlier decision held that " financial hardship, economic feasibility and similar considerations and evidence respecting them as a matter of law are inadmissible " as being matters " not relevant to the consideration of a development application ".

Just a few weeks after the decision in J M Watson & Associates Else-Mitchell J in Sydney City Mission v Sydney City Council (1972) 1 NSWLR 341 qualified his view in holding that the "well-established principle that financial hardship is irrelevant to the consideration of a development application…. is one which has been applied and logically should probably be limited, to development by persons engaged in profit-making enterprises or those seeking to develop for profit-making purposes" at 347. That case, which involved a development application by the Sydney City Mission "a leading charitable and welfare organisation", to develop a men's hostel to provide housing for homeless men, may be considered more apposite to the present case than the other decisions of the Land and Valuation Court, in view of the charitable nature of the Applicant in providing affordable housing, and the public nature of the development proposal.

However, whatever be the position under the previous law, the enactment in 1979 of the EP&A Act materially and radically changed the scope of planning law in this State. No longer could it be said, in the face of s 90(1)(d), that economic or social considerations were irrelevant to the determination of a development application. Rather, by virtue of that provision "the social and economic effects" of the proposed development "in the locality" became a material planning consideration.

The evidence in the present case overwhelmingly supports the finding that a beneficial social effect in the locality of the carrying out of the proposed development is that it will provide affordable housing. Such provision would fulfil a number of the express aims or objectives of the REP, including the first of the enumerated "affordable housing principles" contained in cl 56 of the REP. Conversely, a detrimental social effect in the locality would be caused if the proposed development were not carried out.

In these circumstances, the Applicant's evidence of economic considerations pertaining to the proposed development and to itself (as the exclusively appointed agency for implementing the "affordable housing program" established under the REP) must, in my judgment, be self-evidently regarded as a relevant planning consideration in the present case. Although this conclusion is founded upon the express provisions contained in the REP concerning "affordable housing" and upon the status of the Applicant as the exclusive agency to administer the "affordable housing program" established under the REP, I am further of the opinion that the evidence is also admissible upon a more general basis which is relevant to planning law and its application and which I would formulate by adopting the expression from the judgment of Kerr LJ in R v Westminster City Council ex parte Monahan (1989) 2 All ER 74, as "the relevance of financial constraints on the economic viability of a desirable planning development". The passage in which that particular expression appears is at 96 and is worth repeating because it contains a judicial exposition which I would respectfully adopt and apply in the present case:

Financial constraints on the economic viability of a desirable planning development are unavoidable facts of life in an imperfect world. It would be unreal and contrary to common sense to insist that they must be excluded from the range of considerations which may properly be regarded as material in determining planning applications. Where they are shown to exist they may call for compromises or even sacrifices in what would otherwise be regarded as the optimum from the point of view of the public interest. Virtually all planning decisions involve some kind of balancing exercise. A commonplace illustration is the problem of having to decide whether or not to accept compromises or sacrifices in granting permission for developments which could, or would in practice, otherwise not be carried out for financial reasons. Another, no doubt rarer, illustration would be a similar balancing exercise concerning composite or related developments, ie related in the sense that they can and should properly be considered in combination, where the realisation of the main objective may depend on the financial implications or consequences of others. However, provided that the ultimate determination is based on planning grounds and not on some ulterior motive, and that it is not irrational, there would be no basis for holding it to be invalid in law solely on the ground that it has taken account of, and adjusted itself to, the financial realities of the overall situation.

In that case, the English Court of Appeal was considering the meaning and scope of the expression " material considerations " in the context of s 29(1) of the Town and County Planning Act 1971 which relevantly provided:

…where an application is made to a local planning authority for planning permission, that authority, in dealing with the application, shall have regard to the provisions of the development plan so far as material to the application, and to any other material considerations….

In so concluding, I am aware that Lloyd J in Architectural Property Services Pty Ltd v Rockdale City Council (1999) NSWLEC 83 has recently stated:

(A)part from the limited extent to which economic impacts in the locality may be relevant, described in Kentucky Fried Chicken Pty Ltd v Gantidis (1979) 140 CLR 675, I agree with Mr Hale's submission that economic considerations are not generally relevant under s 79C of the EP&A Act.

In so concluding, His Honour also cited a passage from the judgment of Ackner J in J Murphy and Sons Ltd v Secretary of State for the Environment (1973) 1WLR 560 at 565.

However, it is clear from subsequent English decisions, including in particular R v Westminster City Council that the view of Ackner J has not prevailed: see Encyclopaedia of Planning Law and Practice (1999) Vol 2 at pars 70.12, 70.13, 70.13/1, 70.13/2, 70.13/3, 70.13/4. I would respectfully follow the later English cases in preference to the earlier decision of Ackner J.

Again, with respect of Lloyd J, I do not regard the High Court's decision in Kentucky Fried Chicken, which was concerned with the provisions of the Victorian Town and Planning Act 1961, as providing much guidance to the judicial exposition of the meaning and scope of s 79C(1)(b) of the EP&A Act and in particular, the phrase "social and economic impacts in the locality". Rather, with respect, having regard to the content of the legislation being considered and to its vintage, I would regard the decision in Kentucky Fried Chicken as expressing similar or compatible views to those contained in the cited decisions of the Land and Valuation Court of NSW, in respect of the earlier town planning laws that were contained in the Local Government Act 1919 Pt XII and Pt XIIA.

Once the far more comprehensive reach and content of environmental planning under the EP&A Act compared to earlier models of town and county planning legislation (such as was provided in the Local Government Act Pts XII and XIIA ) is fully appreciated, it is apparent that some of the earlier jurisprudence will not provide apposite guidance to the current task of the Court in interpreting and applying the provisions of the EP&A Act. By way of example, a consideration of the meaning and scope of the expression "the public interest" appearing in the EP&A Act s 79C(1)(e) is not, in my respectful opinion, likely to be assisted by adopting the approach taken by Else-Mitchell J in Anthony George to the statutory function imposed by the Local Government Act 1919 Pt XII upon the Board of Subdivision Appeals to "have regard to this Act, the ordinances, the circumstances of the case and the public interest", in respect of which his Honour held (at 167):

…but I do not consider that these general words and phrases should be treated as embracing the economic position of the subdivider or the economics of a particular subdivision "

No doubt, that approach aptly reflected his Honour's proper understanding of the scope and purpose of town planning, as provided for in the Local Government Act 1919 Parts XII and XIIA. However, given the much more comprehensive scope, content and purpose of the EP&A Act , it would be clearly inappropriate to apply the approach taken in Anthony George No 2 to the interpretation of the expression " the public interest " within the meaning of the EP&A Act s 79C(1)(e) .

Rather, the meaning to be given to that expression, operating as a "material planning consideration" to the determination of a development application, is one that is consistent with the far wider scope and purpose of the EP&A Act particularly as expressed in the objects stipulated in the EP&A Act s 5. Indeed, the adoption of this wider connotation of the expression "public interest" in the EP&A Act s 79C is already established by the Court of Appeal's decision in Shoalhaven City Council v Lovell (1996) 136 FLR 58 where Mahoney JA in giving the leading judgment at 63 made the following observations:

However, by s 90(1)(q) and (r) the Land and Environment Court is to take into account, in exercising such a discretion, the circumstances of the case and the public interest . The ambit of these terms is wide. In my opinion, the public interest includes measures taken to reduce the risk of aircraft accidents and matters of that kind, whether such risks affect those in the aircraft, those in the air base, or those who, in land near the air base, may be affected by aircraft crashes and the like.

The term public interest is not defined in the legislation. The matters comprehended by it are in my opinion of a wide ambit. In O'Sullivan v Farrer (1989) 168 CLR 210 at 216, Mason CJ, Brennan, Dawson and Gaudron JJ said:

Indeed, the expression in the public interest, when used in a statute, classically imports a discretionary value judgment to be made by reference to undefined factual matters, confined only in so far as the subject matter and the scope and purpose of the statutory enactments may enable … given reasons to be [pronounced] definitively extraneous to any objects the legislature could have had in view: Water Conservation and Irrigation Commission (NSW) v Browning (1947) 74 CLR 492 at 505 per Dixon J.

In Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335 at 339, Kirby P referred to the significance of public interest in the context of environmental planning legislation.

For all the foregoing reasons, I would hold that Mr Perkins' evidence concerning economic considerations pertaining to the proposed development and to the Applicant itself, is relevant to - (a) the following matters contained in the EP& A Act s 79C namely - (i) the social and economic effects of the development in the locality and (ii) the public interest and (b) the Applicant's alternative SEPP No 1 objection. Hence, the evidence is admissible.

My evaluation of the evidence will be undertaken in two separate stages - firstly, its effect on the Applicant's alternative SEPP No 1 objection and secondly, as part of my overall evaluation, pursuant to s 79C, of the planning merits of the case.

I am satisfied that the Applicant's alternative SEPP No 1 objection is well founded. I so conclude because I am satisfied on the evidence that if the Applicant's development proposal had to comply with the maximum building height and floor space ratio controls of the REP, there would inevitably be a reduction in the number of residential units in the proposal with the probable consequence that the Applicant, for financial or economic reasons, would not proceed with its affordable housing proposal, the result being a lost opportunity for the provision of affordable housing to the detriment of the realisation of the REP's objectives for affordable housing to be provided in the Ultimo - Pyrmont Precinct and to the ultimate detriment of eligible prospective tenants of such affordable housing development.

The factors which lead me to conclude that it would be unreasonable in the circumstances of this case to insist upon compliance by the proposed development with the relevant standards are - (i.) the belatedness in the planning history of the Applicant's development proposal, of the imposition of the standards; (ii.) the dislocative economic effect of the belated imposition of the standards upon the Applicant's affordable housing proposal; (iii.) the probable result of the Applicant not proceeding with its affordable housing program in the event of enforcement of the floor space ratio control; and (iv.) that result would be an undesirable social result and would be contrary to the public interest inasmuch as a desirable planning opportunity created by the Applicant's proposed development of the development site by affordable housing would be lost.

These factors may be elaborated as follows: (i.) the Applicant's planning of the proposed development (including economic feasibility analysis and entering into the conditional contract for the purchase of the Wreck Air site) commenced and was developed at a time when the REP contained no floor space ratio control for residential development, and imposed a higher maximum height control (28 m) for the development site than that now imposed (21 m); (ii.) at the time the Applicant lodged its original development application in October 1998, it was aware of the publicly exhibited proposed changes to the REP, but advanced its argument as to why the proposal should be approved notwithstanding the proposed changes to the REP; (iii.) by the time the 1999 Amendment to the REP came into force, the Council had already determined the Applicant's development application by refusing consent and the Applicant had already filed its appeal to this Court against the Council's determination; (iv.) not only was the 1999 Amendment untimely in its impact upon the Applicant's development application but it significantly affected the economic feasibility or viability of the Applicant's affordable housing proposal and necessitated the re-submission of the proposal to the Council, supported by the objection under SEPP No 1; (v.) by all accounts, the Applicant's proposal is to be regarded as a desirable planning outcome because, it provides the opportunity for the Applicant to make a significant contribution to the stock of affordable housing, provided in fulfilment of the specific objectives of the REP for such development to occur in Ultimo/Pyrmont Precinct to the social and economic advantage of eligible prospective tenants of the affordable housing program established under the REP; and (vi.) the probable result in the present case of enforcing compliance with the relevant controls (especially the floor space ratio control) would be that the Applicant would not, for economic reasons, proceed with its project, to the detriment of the REP's specific objectives for the provision of affordable housing and to the detriment of the needs of prospective tenants of affordable housing.

For the foregoing reasons, I am satisfied that the Applicant's alternative objection under SEPP No 1 is well founded, in that compliance with the relevant standards is unreasonable in the circumstances of the case.

In so concluding, I have again placed considerable reliance upon the concurrence under SEPP No 1 granted by the Department of Urban Affairs and Planning, which in its evidence to the Court (Exhibit 8), expressed the opinion "that the proposed development is considered to be an ideal opportunity to provide affordable housing in the Pyrmont area in a building appropriately designed for its context".

Finally, I should say a few words on the Council's submission that it was significant that when the 1999 Amendment to the REP came into force, it contained no savings or transitional provision in respect of pending development applications (including the Applicant's development application). It is often a difficult and risky endeavour to draw reliable inferences from the absence of savings and transitional provisions in primary or delegated legislation which is enacted to replace or change an existing statutory regime. However, assuming in favour of the Council's submission, that the absence of appropriate savings and transitional provision from the 1999 Amendment to the REP, was a deliberate decision with the legal consequence that thereafter all development applications (including pending applications) were to be determined by reference to the REP as amended by the 1999 Amendment, the short, but complete, answer to the submission is that given by Mr Davidson, in his oral testimony, namely that the Department knew that the new standards imposed by the 1999 Amendment were amenable to the objection process under SEPP No 1.

Accordingly, in determining whether the Applicant's objection under SEPP No 1 (either the primary or alternative objection) is well founded, the fact that the 1999 Amendment to the REP contained no savings or transitional provision is legally and factually irrelevant.

In leaving this matter, I think that I should emphasise that my conclusion that the Applicant's alternative objection under SEPP No 1 is well founded is not founded on the premise that affordable housing development, because of its perceived beneficial social effects, is either expected not to comply with relevant standards concerning residential development imposed by the REP or is otherwise entitled to some automatic dispensation from those standards. Acceptance of that premise would involve an impermissible reinterpretation of the affordable housing provisions contained in the REP which give no countenance to such a premise. Rather, my conclusion is founded upon the circumstances of this particular case as I have expounded them.

I. EVALUATION OF THE PLANNING MERITS PURSUANT TO THE EP&A ACT S 79C

Having concluded that the Applicant has established both its objections under SEPP No 1 in that in the circumstances of this case, compliance with the relevant maximum building height control and floor space ratio is unnecessary (upon the basis of the Applicant's primary objection under SEPP No 1) and is unreasonable (upon the basis of the Applicant's alternative objection under SEPP No 1), I come finally to consider the planning merits of the proposed development.

As stated in paragraph 11, on the hearing of the appeal, the Council has focussed principal attention on three related issues: (i.) the height of the proposal; (ii.) the floor space of the proposal; and (iii.) the relationship of the proposal with the Sydney Water Pumping Station, a heritage item.

Additionally the Council relies upon the other issues raised, but concedes that they (in themselves or collectively) carry less weight than the three principal issues.

Accordingly, I proceed to determine these issues (which I have reformulated in question form) in the following order: (i.) Are the height and floor space of the proposal excessive? (ii.) Is the relationship between the proposal and the adjoining heritage item satisfactory? (iii.) Is the proposal consistent with the planning principles contained in Pt 2 and Pt 3 of the REP? (iv.) Does the proposal achieve an appropriate level of residential amenity? (v.) Is the extent of the proposal's non compliance with the UDP significant? (vi.) Does the proposal unreasonably interfere with the amenity of resident objectors from the Parkview Towers development? (vii.) Is the proposal provided with adequate light and ventilation? (viii.) Should the proposal be approved in the absence of a Street Block master plan or urban development plan? (ix.) Would approval of the proposal be in the public interest?

Inspiring most of these questions are relevant provisions of the REP which I have earlier recited. In respect of some of the questions (eg questions (i) (ii) and (iii)), the relevant REP provisions have an interlocking or overlapping effect. For this reason I shall initially proceed to answer the questions that I have posed in isolation from each other but finally I shall address the interlocking effect of the relevant REP provisions on my answers to the individual questions.

My finding that the Applicant's primary SEPP No 1 objection is well founded does not, of course, preclude a finding that on the planning merits the proposed development is too high or contains too much floor space.

The Council's case, based principally upon Ms Sureda's opinion is that the height and scale of the proposal is "inconsiderate" in relation to: (i.) its proximity to the waterfront and the low rise development of the Sydney Fish Markets' complex; (ii.) its proximity to the Sydney Water Pumping Station; (iii.) the height of existing buildings in the Street Block; and (iv.) the Parkview Towers development.

This opinion is opposed by the weight of expert opinion adduced by the Applicant, much of which I have already mentioned in my consideration of the Applicant's primary objection under SEPP No 1, and will not repeat here.

Leaving aside for the moment the question concerning the relationship of the proposal with the adjoining heritage item (which I shall next consider), I emphatically prefer the expert evidence adduced in the Applicant's case as to the appropriate form (including height and scale) of the proposal.

On this basis, I would find that the proposal's height and scale (including its floor space) is not inappropriate for a residential redevelopment of the development site, having regard to its physical context and its Residential-Business zoning under the REP. In particular, I would find the proposal to be physically compatible with the greater height and scale of the Parkview Towers development.

Likewise, I would find it to be compatible with any likely future redevelopment of the remainder of the Street Block (excluding the Sydney Water land) carried out conformably to the REP.

Finally, in its physical context, I would find the proposal to be not incompatible with the Sydney Fish Market's low rise waterfront complex of buildings, given the entirely different purposes and types of development respectively carried out on the two sites each located within the same Residential - Business Zone under the REP.

The REP includes in Schedule 4 the following as a heritage item:

" Heritage Item " is defined in Schedule 1 to the REP as

a building, work, relic, tree or place identified on Map 4 as a heritage item and described in Schedule 4".

Map 4 (Sheet 1) identifies heritage items in the Ultimo - Pyrmont Precinct by distinctive colour and by separate number. (The numbers coincide with the numbers 1 to 106 enumerated in Schedule 4).

As I have noted in paragraph 43 the distinctive colouring showing the Sydney Water Pumping Station does not include the whole of the site. Rather, it shows a small section, which I would interpret as being confined to the building only, and no part of its curtilage or site.

In these circumstances, I deduce that the heritage item is relevantly the "building" comprising the Pumping Station, in contradistinction to "the place" comprising the whole of the Sydney Water site (which currently comprises some 1200 m2).

A description of the heritage item emerges from the following extracts from (i) the City of Sydney Heritage Inventory (1989) and (ii) the Register of the National Estate:

Southern region sewer maintenance, city district, Blackwattle Depot. Despite the utilitarian function of the building, the designer has used a fashionable style of the period. Attention to details, including sandstone sills and lead-lighted windows are indicative of this treatment.

…This sewage pumping station is a small square brick building with a gabled hip roof clad in terracotta tiles. It has half height pilasters detailed as buttresses with sandstone copings and rectangular window openings, two on each frontage. The building sits above an approximately 10m deep excavation lined in reinforced concrete which contains the sewage pumps and associated pipes and valves. The early use of reinforced concrete is significant as the material was then still in its experimental phase.

The former source identifies the following significance of the Pumping Station:

Of historical and aesthetic significance for its functional requirements and stylistic qualities common to its contemporaries in Sydney.

The latter source identifies the following significance of the pumping station:

Statement of Significance : Commissioned in 1904, Sewage Pumping Station No 2 (SPS No 2), Pyrmont, is historically significant as an important period element in the evolution of Sydney's sewerage infrastructure. It played a salient role at the time and remains one of the earliest electrical sewage pumping stations still in use (Criterion A.4) (Historic Theme: 4.2 Supplying urban services). The station is technically important for being one of the first generation of integrated electrical low level sewage pumping stations constructed to serve the low lying areas of Sydney. It was also one of the group of stations connected to the new Southern Ocean Outfall. Further, the station's pumping chamber illustrates early use of reinforced concrete (Criterion F.1).

The question of the relationship between the proposal and the heritage item involves a number of related considerations, reflecting the overall effect of the heritage provisions contained in the REP, namely cl 29, cl 30 and cl 31 (recited in par 44 ) and cl 26 (recited in par 34 ).

These considerations involve the following sub-questions: (i.) Does the height of the proposal provide "an appropriate transition in scale" between it and the heritage item. (cl 26)? (ii.) Is the proposal compatible with the conservation of the heritage significance of the heritage item (cl 29)? (iii.) Does the proposal adversely impact upon the heritage significance of the heritage item and its setting (cl 30)? (iv.) Is there a need in the present case for the preparation of a conservation management plan or heritage impact statement (cl 31)? (v.) Is the proposal likely to impact on any archaeological material (cl 33)?

In posing these questions, it needs to be recalled that the development site includes part of the Sydney Water Pumping Station site, namely some 364 m2 (of the 1200 m2 site area) being lot 2 in the draft plan of subdivision (being Annexure A hereto). There are two important consequences flowing from this fact, namely:- (i.) the proposed development which is built to the adjusted common boundary with the Sydney Water Pumping Station site will be physically much closer to the Pumping Station Building than would have occurred had the development site not included any part of the Sydney Water Site; and (ii.) because the proposed development includes within its "development site" part of the Sydney Water Pumping Station site, the subdivision of the Sydney Water site (necessary to create the development site) is properly to be regarded as "development relating to a heritage item" within the meaning of cl 31 of the REP.

In relation to the second mentioned consequence, I should note that Ms Sureda was of the opinion that cl 31 applied to the proposal because (i) the development site included part of the Sydney Water site and (ii) the heritage item, being the pumping station building, included "its surrounding title". This opinion appears to have been shared by Mr David Logan, a Heritage Consultant, in his report (Exhibit D at par 5.18 - 5.21).

Notwithstanding these opinions, I think the better view of the effect of cl 31 is that it has direct application in the case of the proposed subdivision of the Sydney Water land, but not in respect the Applicant's development application (which does not include the proposed subdivision). Rather, the development application is dependent upon the proposed subdivision being effected so that the development site is made complete (both legally and factually). If the proposed subdivision is effected, and the Applicant purchases from Sydney Water the portion of its site that has been included in the development site, the portion will thereupon (both legally and factually) cease to be part of the curtilage or "surrounding title" (to adopt Ms Sureda's description) of the heritage item, and become instead part of the Applicant's development site. Upon such translation of the factual and legal status of the land, cl 31 of the REP will not apply because the Applicant's development proposal will "not relate to" a heritage item. However, the necessary subdivision of the Sydney Water site directly relates to a heritage item and cl 31 of the REP would apply to that subdivision.

For the foregoing reasons, I do not accept the Respondent's experts' views that cl 31 of the REP applies to the Applicant's development proposal. However, in my opinion, it does apply to the proposed subdivision of the Sydney Water site. For this reason, and for the added reason that development consent must be given in respect of a legally defined and recognised land unit, it would be appropriate, should the Applicant's appeal be upheld, to grant a deferred commencement consent by requiring (i.) the proposed subdivision of the Sydney Water site to be effected; and (ii.) any development application necessary for such subdivision to be effected to satisfy the requirement of cl 31 of the REP.

The need for any development application for the proposed subdivision to comply with cl 31 of the REP has significance for the present case, because it can reasonably be expected that the required conservation management plan or heritage impact statement will address, not only the proposed subdivision, but the probable resulting development (being an integral part of the Applicant's proposed development) to be carried out on the portion of the Sydney Water site to be acquired by the Applicant: cf. Shoalhaven City Council v Lovell (1996) 136 FLR 58 at 63. If this were to occur, it is likely to overcome some of the deficiencies apparent in the Applicant's evidence, concerning assessment of the heritage significance of the Pumping Station, including need for archaeological investigation.

In determining whether the relationship between the proposal and the heritage item is satisfactory, it is in my judgment of first importance to identify the "heritage significance" (as that term is defined in the REP) of the Pumping Station. The evidence clearly suggests that its significance is primarily "historical", rather than "aesthetic", and I would so find.

This finding does not oust the need for the proposal to be satisfactorily related to the heritage item. However, it does inform the necessary evaluation of matters of curtilage, setting, scale and height relationship.

Ultimately, I have concluded that the relationship is satisfactory even though the proposed building will be placed only 8 m from the Pumping Station building and will attain the height of 16.6 m, being stepped down two storeys or 5 m from the higher section of the building at the corner of Wattle Street and Wattle Crescent.

The physical proximity of the proposal to the heritage item comes about by virtue of the Applicant's decision to include part of the Sydney Water site in the development site for its proposal. It is to be noted that this decision was encouraged by advice from the Council and from the Department of Urban Affairs and Planning. The six storey element of the proposal on the adjusted common boundary will replace a nondescript two storey storage/workshop building erected on the Sydney Water site, set back some 12 m from the heritage building.

The differences in height and scale between the proposal and the heritage building are obvious. However, in my judgment, the relationship between the buildings will be satisfactory and the conservation of the Pumping Station building will not be compromised by the existence of the proposal, which in my judgment, incorporates, by virtue of being stepped down alongside the adjusted common boundary, an appropriate transition in scale between the overall height of the proposal and the heritage building.

Other important factors in my conclusion of the satisfactory relationship between the buildings are: (i.) the fact that the heritage building is centrally located on the Sydney Water site, enjoying generous setbacks from Pyrmont Bridge Road and Wattle Street and less generous, but adequate, setbacks from the proposal; and (ii.) the fact that the Pumping Station continues to exist as operational infrastructure of Sydney Water;

Question (iii) (consistency with the planning principles of the REP)

Ms Sureda's report identifies some of the principles contained in cl 15 of the REP under the heading " Urban Design " which she considered to be not fulfilled by the proposal. These particular principles mainly focus on " building height and scale " of new development.

Since I have earlier found the height and scale of the proposal to be appropriate, I do not accept Ms Sureda's opinion. Clause 15 of the REP contains a host of planning principles addressing many planning issues, and I do not think it a particularly helpful exercise to focus attention on particular principles, especially in circumstances where the REP specifically imposes in Div 5 of Pt 3 urban design principles pertaining to height and scale.

The proposal, in my judgment, is consistent with the relevant planning principles of the REP, understood globally and applied generally (as I consider cl 18 of the REP requires) .

Ms Sureda's report draws attention to the proximity of the proposal to the Sydney Fish Markets complex and to the nearby Hymix concrete batching plant. She also notes the proximity of the proposal to busy arterial roads, including Pyrmont Bridge Road and Wattle Street.

She opines that the proposal, by virtue of its exposure to these sources of noise and odour pollution, is "not endowed with an appropriate level of pre-existing amenity for residential development". These opinions are, of course, relevant to the last sentence of cl 18 of the REP.

There is no dispute that the proposal is physically proximate to these potentially polluting sources. However, so are the 225 flats in the "Parkview Towers" development.

Moreover, the REP expressly provides for "mixed" commercial and residential development.

Additionally, the development site enjoys compensatory advantages eg water views, and being located directly opposite Wentworth Park (a generously proportioned open space).

In my judgment, the proposal will achieve an appropriate level of residential amenity. In so concluding, I accept the weight of expert opinion adduced by the Applicant in preference to Ms Sureda's opinion.

Ms Sureda's report summarises the proposal's non-compliances with the UDP as follows:

< Exceeding the maximum street wall height by over 2 m; <Exceeding the scale of height in relation to a heritage item by 4 storeys; < Exceeding the height of the building envelope with regard to an internal courtyard by 3 storeys; < No rear setback where a 6m setback should be applied; < Exceeding the street wall height with regard to corner articulation; < Overlooking of habitable rooms with regard to privacy; < Disregard for recommended curtilage setback to heritage item; < Interruption of views of and to heritage item; < Disregard for view sharing with adjoining buildings; < Lack of block analysis; < Lack of ground level uses addressing street; < Failure to conceal lift over-run or indicate roof plant; < No provision of public art; < No provision of direct street access to ground floor units; < Not achieving minimum floor to ceiling heights; < Not providing adequate storage facilities for units; < Under providing private open space; and < No servicing the building's garbage needs off-street.

This summary may be accepted as providing an accurate analysis of the relevant UDP provisions with which the proposal does not comply. In many instances, the degree of non-compliance is slight.

Ultimately, I have concluded that the non-compliances with the UDP are not significant. In so concluding, I accept the opinion of the Department of Urban Affairs and Planning that "the proposal achieves a high standard of design that satisfies the spirit and intent of" the REP and the UDP…. meeting "all the major planning and design principles of the REP and UDP and the majority of the quantitative and qualitative provisions" (Exhibit 8).

Question (vi) (Impact on amenity of residents of Parkview Towers development)

I accept Ms Sureda's opinion that some residents of the Parkview Towers development will experience a loss of some views by virtue of the proposal coming into existence. This loss of views will particularly affect residents in the block nearest to the corner of Wattle Street and also in the next block and the views lost will be of Blackwattle Bay. These undoubtedly are prime views. However, views in other directions will not be affected by the proposal. The loss of views presently enjoyed by residents of the Parkview Towers development across the development site (and indeed the whole of the Street Block) is almost inevitable with any likely redevelopment of those sites, which are currently underdeveloped.

Although the proposal contains a small built element at the Wattle Street, Wattle Crescent corner that exceeds the maximum height of 21 m prescribed by the REP, it also contains elements, below that height, by virtue of its stepped design.

In these circumstances, I have concluded that the proposal will not unreasonably interfere with the amenity of residents of the Parkview Towers development.

In its submission to the Council ( Exhibit 2 ), the Applicant included written advice from Sydney Water of its approval in principle to the creation of an easement for light and ventilation 4 m wide along the adjusted common boundary of the adjoining properties.

Ms Sureda thinks that the easement should be 6 m (reflecting a requirement of the UDP).

Ultimately, the Applicant appears to have adopted the position that no easement was necessary because of the unlikelihood of Sydney Water redeveloping the site of the Pumping Station.

In my judgment, the proposed 4 m wide easement is required and is adequate. The creation of such an easement will be the subject of a deferred commencement condition.

Ms Sureda rightly (in my opinion) considered that recourse to a Master Plan would provide the opportunity to resolve a number of issues raised by the proposal, including compatibility with any potential redevelopment of the Street Block.

However, there is no compulsion under the REP for such a process to be undertaken and the Applicant cannot speak for other owners of land in the Street Block.

In my judgment, there is no need in the present case for any master plan to be prepared in respect of the Street Block and there is no justification for withholding development consent because no master plan exists.

In my judgment, there is considerable public interest in granting consent to the proposal by virtue of the opportunity presented to provide a significant amount of affordable housing in the Pyrmont area in fulfilment of the express objectives of the REP and to the social benefit of eligible prospective tenants.

My evaluation of the planning merits leads me to conclude that development consent should be granted. In so concluding, I am also satisfied that that result is consistent with the interlocking provisions of the REP that I have earlier mentioned, and that my answers to the individual questions raising the planning merits, satisfy those provisions.

I am also of the opinion that the grant of consent is consistent with the aims set out in cl 3 of SEPP No 1.

Not only is strict compliance with the relevant development standards unreasonable and unnecessary in the circumstances of the case, for the reasons I have given in upholding the Applicant's objections, but strict compliance would "tend to hinder the attainment of the objects specified in s 5(a)(i) and (ii) of the EP&A Act", especially in terms of "promoting the social and economic welfare of the community and a better environment".

For all of the foregoing reasons, development consent should be granted, subject to appropriate conditions, as have been essentially agreed upon by the parties. However, for the reasons I have given, the development consent should be a deferred commencement consent, subject to deferred commencement conditions relating to (i) the subdivision of the Sydney Water site and (ii) the creation of an easement for light and ventilation 4 m wide over the Sydney Water site along the adjusted common boundary with the development site.

The parties are invited to bring in short minutes to give effect to my determination.

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