Clifton Development Group Pty Ltd v Council of the City of Sydney

Land and Environment Court (NSW)|2022-06-14

Solicitors: Mills Oakley (Applicant) The Council of the City of Sydney (Respondent) File Number(s): 2021/325004

Judgment

These proceedings are brought pursuant to s 8.7(1) of the Environmental Planning and Assessment Act 1979 (EPA Act) in response to the Council of the City of Sydney's deemed refusal of development application D/2021/1129 (DA). The application seeks consent for the demolition of existing structures, site preparation works and the construction of a 7-storey building for the purposes of a commercial premises with ancillary retail tenancy (the proposed development) at 9-13 Brisbane Street, Surry Hills (the site).
On 9 June 2022, the applicant amended its DA to rely on the amended plans and documents listed in the Schedule to the Notice of Motion filed 1 June 2022. At the hearing of the matter on 14 June 2022 following the oral evidence of Mr Ding on behalf of the adjoining landowner Memocorp Australia, the parties requested that the proceedings be adjourned and reallocated to a conciliation conference under s 34 of the Land and Environment Court Act 1979 (LEC Act) to allow further consideration of the objectors' concerns and the Council's draft conditions of consent. The Court accommodated the parties' request and adjourned the hearing to allow the matter to proceed forthwith to a s34 conciliation conference, which I facilitated.

Floor space ratio (FSR)

The exceedance of the FSR standard in cl 4.4 of the Sydney Local Environmental Plan 2012 (LEP) has been addressed in the applicant's written request dated 26 May 2022 prepared by Urbis (Tab 4 of 'Exhibit AK-2' to the affidavit of Alexander Kingsbury dated 1 June 2022 in support of the Notice of Motion to amend the application dated 1 June 2022) (the request).
Relevantly, the request seeks an exception from compliance with the FSR standard under cl 4.4(2) of the LEP, which by reference to the Council's 'Floor Space Ratio Map' establishes a maximum FSR for the site of 5:1.
The proposed development has a total gross floor area (GFA) of 2486m2 which equates to a total FSR of 5.56:1. The breakdown of the GFA provision is set out in the table at p 9 of the request. The proposed floor space exceeds the 5.1 maximum FSR space by 0.56:1 or alternatively by the provision of 250.4m2 of floor space. Of this, 68m2 is attributable to the end of journey floor space that would be permissible without any cl 4.6 request if extra GFA for commercial and retail space had not been sought. The extra GFA for commercial and retail space is 182.4m2.
It is submitted that the extent of the floor space variation is considered minor - 11.2% in total but only 8.2% in terms of commercial and retail floor space (p 9 of the request). Accepting that the proposed contravention includes the end of journey floor space area as well as another additional gross floor space: Elimatta Pty Ltd v Read [2021] NSWLEC 75, in this instance cll 6.12(c) and 6.13(1) of the LEP do not strictly apply as the additional GFA will be greater than the additional GFA that is attributable to the "end of journey floor space".
That said, the request seeks to justify the proposed contravention in an analogous way to the justification set out in GM Architects Pty Ltd v Strathfield Council [2016] NSWLEC 1216 at [27] which dealt with similar incentive provisions.
For the reasons outlined below, I am satisfied that the request has adequately demonstrated that: 1. compliance with the development standard is unreasonable or unnecessary in the circumstances of the case; and 2. there are sufficient environmental planning grounds to justify contravening the development standard.
In that regard, I accept in accordance with cl 4.6(3)(a) that the objectives of the standard are achieved by the proposal notwithstanding the breach.
In addressing the objectives of the standard, the request records that the proposed development is intended to revitalise the redundant warehouse building on the site and provide a high-quality commercial building which will attract tenants within the creative industry commensurate with the site's location adjacent to the Oxford Street corridor and on the CBD fringe. It is submitted that the development will add to the developing innovative and diverse business clusters within the City Fringe which play a key role in contributing to the employment and productivity target for the Harbour CBD. As such, the proposal is said to support the initiative identified in Priority P2 of the City of Sydney's Local Strategic Planning Statement.
The request refers to the Oxford Street Floorspace Supply and Demand Study prepared by SGS Economics - appended to the Oxford Street Cultural and Creative Precinct Planning Proposal, which identified the need for 5,565m2 of office space-based floor space and 3,910m2 of creative industries floor space in that Precinct. While the site is located directly adjacent to that Precinct, it is submitted that the provision of floor space on the site reflects the broader need for commercial floor space for creative industries within the broader precinct.
It is submitted that the additional floor space will not impact adjacent local heritage items located to the west of the site on Wentworth Avenue and that specialist heritage and structural advice has informed the applicant's decision to demolish the existing building in order to provide a high quality commercial building which will be suitable for the future evolution and character of Surry Hills area. It is submitted that the proposed development better achieves the objects of the EPA Act set out in s 1.3(a), (b), (c) and (g) (see request p 16) than a compliant building because it offers an efficient use of the land in a way that creates no material adverse impacts for neighbours or the wider community. In short, it creates an opportunity to provide a commercial/retail space with distinct qualities that can accommodate niche activities (that are not likely to be accommodated in above ground floor space). It is submitted that the largely subsurface commercial/retail GFA are unlikely to compete with (or meet the same needs) as the above ground space that benefits from an exterior outlook. For example, these areas may be used as a gym, restaurant, or retail premises. As these types of uses are unlikely to be accommodated in any commercial building above the ground floor, it is submitted that there is no real prospect that the lower floor premises would be unused. These will be spaces for niche activities.
For the above reasons, I accept the submission that the proposed development will provide space to meet the anticipated development needs for the foreseeable future and achieve objective (a) of cl 4.4.
I also accept that the design of the proposed development responds well to the height and bulk of the surrounding urban context. The density of the development within City of Sydney is regulated by both the FSR and height controls in the LEP and also the height in storey and built form provisions of the Sydney Development Control Plan 2012 (DCP). In respect of the proposed development, it is to be noted that the proposal is below the height control of 27 m and the height in storeys control of 8 storeys.
It is submitted that the physical presentation of the proposed development to the public domain and its neighbouring properties will not change due to the contravention of the FSR control. Furthermore, that any additional vehicular traffic generated by the additional FSR in the retail and commercial components of the building is expected to be negligible and readily accommodated in the locality. Particularly, when the proposal encourages sustainable transport options by removing existing vehicular crossings and providing end of journey facilities and 25 bicycle spaces. It is submitted that the additional pedestrian traffic from the development will beneficially activate the laneways in the locality and promote safety through passive surveillance and improve the sense of vibrancy in the area. Ultimately, it is submitted that the building as designed will achieve a revitalised visible street corner with an engaging façade design without adverse impact. Based on the reasoning outlined from the request, I am satisfied that the proposal responds well to Section 3 of the DCP and Council's desired future character objectives for defining the public domain, activating the street and reinforcing the character of the surrounding streetscape. Therefore, objective (b) is achieved by the proposed development.
I am also of the opinion that the proposal satisfies objective (c) by providing an intensity of development that is commensurate with the capacity of existing and planned infrastructure. In that regard, I note that the proposed development is located in close proximity to the revitalised Central Station precinct and the Sydney Metro and the CBD Light Rail and thereby well placed to maximise the benefits of this recent government infrastructure. By adding a subsurface floor space for niche activities that would not normally be accommodated in a more conventional space above ground, the design offers a more efficient use of the land and thereby makes better use of the capacity of existing and planned infrastructure as compared to a compliant development.
I also accept the submission that the new development will achieve objective (d). Whilst the design reflects the very diverse and mixed built form character of Surry Hills, I am satisfied that the design of the development and the imposition of the agreed conditions will minimise any adverse amenity impacts for neighbouring sites. The contemporary development with its lightweight addition will address the street and activate the public domain - providing a contemporary layer of development in the evolution of the area consistent with the DCP provisions.
I also accept that the proposed development is consistent with the objectives of the B4 Mixed Use zone in which it is located. For the reasons already identified, those set out in the table at par 6.5 of the request I accept that the proposed development provides:

a mixture of compatible land uses in a built form; and
a development that integrates suitable business, office and retail uses in close proximity to public transport (and providing encouragement for walking and cycling) whilst supporting the viability of centres.

As the proposed development is consistent with the objectives of the development standard and the zone objectives I consider the proposal to be in the public interest: cl 4.6(4)(b)(ii).
The request at pp 15, 16 and 17 sets out the environmental planning grounds which are submitted as being sufficient to justify the breach of the standard. In that regard, the submission records that the element in breach of the standard does not generate any environmental harm and offers only positive planning benefits. The detailed shadow analysis prepared by Grimshaw provided with the plans shows the extent of the additional shadow caused by the development overall to be minimal and considered acceptable in recognition of the site's dense urban context. The additional floors space has been assessed and not generating any impact on the adjacent heritage items located to the west of the site on Wentworth Avenue. The development is said to better achieve the objects of the EPA Act set out in s 1.3 than a compliant building and after review I accept that submission. The proposed contravention supports good design in several ways - firstly by efficient use of a largely subsurface area that would otherwise be wasted or underutilised. Secondly, it will better activate the streetscape as the activities likely to be accommodated in the lower ground floor commercial/retail will likely contribute to pedestrian movement in the laneways. Thirdly, it will offer a tenancy mix of the new building which will contribute to a greater variety of activities in the locality with improved activation of the streetscape from the proposed lower ground floor commercial/retail area which will boast the amenity of the area.
Accepting that the focus of the written request must be on the aspect or element of the development that contravenes the development standard when considering the sufficiency of the environmental planning grounds for the purposes of cl 4.6(3)(b) (Initial Action Pty Ltd v Woollahra Council (2018) 236 LGERA 256; [2018] NSWLEC 118), I am satisfied that the applicant's request has proved sufficient environmental planning grounds to justify the contravening of the standard in this case.
The Secretary of the Department of Planning and Environment is assumed to have concurred to the variation. This is because of Department of Planning Circular PS 20-002 'Variations to development standards', dated 5 May 2020. This Circular is a notice under cl 64(1) of the Environmental Planning and Assessment Regulation 2000. A consent granted by a consent authority that has assumed concurrence is as valid and effective as if concurrence had been given.
Having decided that the applicant's cl 4.6 request should be upheld, I now turn to the other jurisdictional matters of relevance outlined in the parties' written submission filed with their s 34 agreement.

Sydney Local Environmental Plan 2012 (LEP) 1. The LEP applies to the DA and was amended on 26 November 2021 by the Sydney Local Environmental Plan 2012 (Amendment No 64). These amendments do not relevantly apply to this DA by reason of the savings provision inserted as cl 1.8A(5) of the LEP.

Clause 6.21(3) (as it stood prior to being amended on 26 November 2021) 'Design excellence' 1. The parties' experts have considered the matters listed in cl 6.21(4) of the LEP as it stood prior to being amended on 26 November 2021 and are satisfied that the proposed development exhibits design excellence. I accept this submission.

Clause 6.21(6) (as it stood prior to being amended on 26 November 2021) 'Competitive design process' 1. The proposed development will have a height above ground level (existing) greater than 25 m. 2. A competitive design process has not been held in relation to the proposed development. Holding a competitive design process for the proposed development would be unreasonable or unnecessary in the circumstances. 3. This is addressed on pp 27-29 of the Statement of Environmental Effects prepared by Urbis dated 24 September 2021 (Tab 5 to the Class 1 Application).

Clause 7.19 'Development must not result in long term adverse visual impact' 1. The proposed development involves the demolition of a building. 2. The land affected by the demolition will be comprehensively redeveloped under the development consent (if granted) and adequate measures will be taken to assist in mitigating any adverse visual impacts that may arise as a result of the demolition with regard to the streetscape and any special character area. 3. This is addressed in the architectural drawings prepared by Grimshaw dated 23 May 2022 (Tab 2 of 'Exhibit AK-2' to the affidavit of Alexander Kingsbury dated 1 June 2022 in support of the Notice of Motion to amend the application dated 1 June 2022) and the demolition work plan prepared by Mercon dated 13 January 2021 (Tab 27 in 'Exhibit AK-1' to the affidavit of Alexander Kingsbury dated 8 April 2022 in support of the Notion of Motion to amend the application dated 8 April 2022). I accept this submission.

Clause 7.20 'Development requiring or authorising preparation of a development control plan' 1. The proposed development is development for the purposes of a new building. The proposed development will result in a building with a height greater than 25m above ground level (existing). 2. A development control plan has not been prepared for the land. Preparation of a development control plan for the land would be unreasonable or unnecessary in the circumstances. 3. This is addressed on pp 27-34 of the Statement of Environmental Effects prepared by Urbis dated 24 September 2021 (Tab 5 to the Class 1 Application). I accept this submission.

State Environmental Planning Policy (Resilience and Hazards) 2021 - s 4.6 1. The land requires remediation and will be suitable for the purpose for which the development is proposed to be carried out once remediation has been undertaken as required by the conditions of consent. 2. This is confirmed on p 23 of the Statement of Environmental Effects prepared by Urbis dated 24 September 2021 (Tab 5 of the Class 1 Application), p 28 of the Detailed Site Investigation report prepared by EI Australia dated 9 July 2021 (Tab 15 of the Class 1 Application). I accept this submission.

I am satisfied that the parties' decision is one that the Court could have made in the proper exercise of its functions, as required by s 34(3) of the LEC Act.
As the parties' decision is a decision that the Court could have made in the proper exercise of its functions, I am required under s 34(3) of the LEC Act to dispose of the proceedings in accordance with the parties' decision.
The Court orders: 1. The applicant's written request under clause 4.6 of the Sydney Local Environmental Plan 2012 (the LEP) seeking a variation of the development standard for floor space ratio set out in clause 4.4(2) of the LEP is upheld. 2. The appeal is upheld. 3. Development consent is granted to development application D/2021/1129 for the demolition of an existing warehouse building, excavation and construction of a 7-storey commercial office building with ground floor cafe at 9-13 Brisbane Street, Surry Hills, subject to the conditions set out in Annexure A. ………………………… S Dixon Senior Commissioner of the Court Annexure A (1085570, pdf)

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 17 June 2022

(2018) 236 LGERA 256

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