Deancliff Developments v Hornsby Shire Council

Australian Gaslight Co v Valuer-General (1940) 40 SR (NSW) 126 Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 CASES CITED: Hope v Bathurst City Council (1980) 144 CLR 1 Randwick Municipal Council v Manousaki (1988) 66 LGRA 330 Zhang v Canterbury Council (2001) 51 NSWLR 589

Deancliff Developments Pty Limited Hornsby Shire Council PARTIES: May Harlow Pty Limited Felix Fei Chui

A: M Craig QC / H Irish COUNSEL: 1R: A Galasso 2&3R: B J Preston SC / J E Robson SC

A: Baker & McKenzie, Sydney SOLICITORS: 1R: Storey & Gough, Parramatta 2&3R: Adam Darke & Co, Berowra Heights

LOWER COURT JURISDICTION: Land & Environment Court

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40815/04 L&E 10184/04

BEAZLEY JA TOBIAS JA BROWNIE AJA

Thursday 18 August 2005 DEANCLIFF DEVELOPMENTS PTY LTD v HORNSBY SHIRE COUNCIL & ANOR Judgment 1 BEAZLEY JA: I agree with Tobias JA. 2 TOBIAS JA: The appellant, Deancliff Developments Pty Ltd (Deancliff), was at all material times the owner of Lots 1 and 2 in DP211638 being Nos. 24-26 Orara Street, Waitara (the subject land). The second respondent, May Harlow Pty Ltd (May Harlow), is the owner of a number of parcels of land both in Orara Street and Waitara Street, Waitara including Nos. 22 and 28 Orara Street, Waitara (No. 22 and No. 28 or, together, Nos. 22 and 28). The third respondent, Felix Fei Chui (Mr Chui), is the owner of No. 20 Orara Street, Waitara (No. 20). 3 On 11 September 2003, Deancliff lodged with the first respondent, Hornsby Shire Council (the Council), a development application with respect to the subject land in which it sought the Council's consent to demolish the existing buildings thereon and to erect a multi-unit housing development containing nine levels of residential accommodation comprising 26 dwelling units, three levels of basement car parking and one level of basement storage for the residential units (the proposal). On 17 March 2004 the Council refused that application. 4 According to Pain J, the primary judge, the two reasons underlying the Council's decision to refuse the application were summarised as being the proposal's failure to amalgamate certain allotments as contemplated by the relevant development control plan and its failure to comply with State Environmental Planning Policy No. 65 (SEPP 65) with respect to urban design issues. 5 Although the Council had refused the application on 17 March 2004, on 18 February 2004 Deancliff filed a Class 1 application in the Land and Environment Court appealing against the Council's deemed refusal of the development application. The appeal was heard by Pain J who, on 3 September 2004 ordered that the appeal be dismissed. Deancliff now appeals to this Court pursuant to s 57(1) of the Land and Environment Court Act 1979 which confines any such appeal to questions of law.

Deancliff's asserted questions of law 6 Deancliff confined its submissions to what it alleged were the following questions of law: (a) That the primary judge misinterpreted the provisions of the Council's High Density Multi-Unit Housing Development Control Plan 1998 (the DCP) in that she construed the objective of the Site Amalgamation Element of the DCP (which provided for integrated development that achieved the required dwelling yields and equitably distributed the development potential over all existing properties) and the performance criteria by which that objective was to be implemented (which required the development potential of existing properties to be distributed equitably), as requiring the Council, and the Court on appeal, when considering the equitable distribution of the development potential of existing properties to take into account the "locational benefits" or "locational advantage" or "locational inequities" which might result from amalgamation or non-amalgamation as the case may be. (b) The primary judge failed to provide reasons for her finding that: (i) the two landscaping issues identified by the Court appointed landscape expert, Ms Sontar, resulted in impacts by the proposal which were unacceptable; and (ii) a further consideration in favour of refusal of the application was that Deancliff was only prepared to donate a nine metre, and not a ten metre, strip of its land for the public open space indicated in the Landscape Masterplan which formed an essential part of the DCP. 7 The critical issue in the appeal was confined to the first alleged error of law identified above, it being properly conceded by senior counsel for Deancliff that, if he failed to convince the Court that her Honour had committed an error of law in construing the DCP in the manner referred to, then irrespective of whether she erred in the other respects alleged, Deancliff's appeal to this Court must fail. 8 As I am of the opinion that the primary judge did not misinterpret the DCP so that no error of law on her part has been established with respect thereto, it follows that it will be unnecessary to consider the correctness or otherwise of the other two alleged errors of law upon which Deancliff relied.

The relevant provisions of Hornsby Local Environmental Plan 1994 (the LEP) 9 The subject land, including that owned by May Harlow and Mr Chui, was zoned under the LEP as Residential D (High Density). Within that zone multi-unit housing, which expression was defined in the LEP in a manner which included the proposal, was permissible with the consent of the Council. 10 Clause 14 of the LEP was headed "Density". Under the sub-heading "Multi-unit housing", cl 14(4A) provided as follows: "The Council is not to consent to the erection of multi-unit housing on a site area consisting of the whole or part of any of the 9 numbered development sites shown edged heavy black on Diagram 1 in Schedule BA unless the council has considered whether it should require consolidation of all or some of the allotments comprising the numbered development site concerned." 11 Of the nine numbered development sites shown edged heavy black on Diagram 1 in Schedule BA of the LEP, Development Site 4 comprised 16 privately owned individual allotments of approximately equal area and dimensions of which nine had a frontage to Orara Street and the balance had a frontage to Waitara Avenue. Apart from the subject land owned by Deancliff and No. 20 owned by Mr Chui, the balance of the allotments in Development Site 4 were owned by May Harlow except for No. 35 Waitara Avenue which was owned by Woodsinta Pty Ltd, a company which appears to be controlled, as was May Harlow, by a Mr Tanner. 12 Clause 15 of the LEP was headed "Floor Space Ratio". So far as the subject zone was concerned, cl 15(1) provided the development therein was not to result in a building that exceeded a floor space ratio (FSR) of 1.6:1. This was, however, subject to cl 15(3) which provided as follows: "Despite subclause (1), the Council is not to consent to the erection of multi-unit housing on any of the 9 numbered development sites shown edged heavy black on Diagram 1 in Schedule BA unless the Council is satisfied that the development will result in a floor space ratio of not less than 1.6:1 and not more than 2:1."

It was agreed between the parties that the FSR of the proposal was 2.1:1 but no point was made at the hearing before the primary judge that that exceeded the maximum of 2:1 referred to in cl 15(3).

The relevant provisions of the DCP 13 Relevantly, the DCP was divided into "Strategy Controls" and "Specific Controls". Areas zoned Residential D were referred to in the DCP as "precincts". Under the heading "How does this DCP work?", the following appeared: "Control elements comprise element objectives, performance criteria and prescriptive measures. The element objective may be implemented by meeting the performance criteria. Meeting performance criteria enables the development of innovative schemes that meet the particular characteristics of an individual site." 14 Part 2 of the DCP contained the "Strategy Controls". They comprised a number of elements. The first such element was entitled "Masterplan". Its objective was to "provide an overall Town Centre structure" and its Performance Criteria required that development be in keeping with the future townscape and urban form provided in the relevant Masterplan. The relevant Masterplan for the Orara Street precinct was Map B1. It proposed three buildings containing high-density multi-unit housing within Development Site 4. Two of those buildings known as D1 and D2 had frontages to Orara Street whereas the third, D3, had a frontage to Waitara Avenue. Each was to have a maximum of eight storeys. Relevantly, Building D2 was located on Nos. 22, 24 and part of No. 26 Orara Street whereas Building D1 was located on Nos. 12-18 Orara Street. According to the Masterplan, No. 20 was to be used for the purpose of providing a combined vehicular access to serve both Buildings D1 and D2, the DCP providing for all car parking to be underground. 15 Map B2 which formed part of the DCP, was the Orara Street Precinct Landscape Masterplan. It provided for a large area of public open space referred to as the Village Green which straddled Orara Street (which was to be closed), was elliptical or oval in shape and was located in part upon Nos. 26 and 28. The public open space extended to either side of the Village Green to provide landscaped access to Romsey Street and Waitara Avenue. Relevantly, the whole of No. 28 and approximately two thirds of No. 26 were included in that public open space. 16 It is appropriate to observe at this point that Building D2, which was to be located on Nos. 22, 24 and part of No. 26, was intended by the Masterplan to be a single building which, as I have indicated, shared vehicular access to the underground carpark of both Buildings D2 and D1 which was to be located on No. 20. Apart from that shared vehicular access from Orara Street, the balance of No. 20 was to be landscaped. The intent of the Landscape Masterplan was that all car parking was to be underground so that the three buildings, D1, D2 and D3 within Development Site 4 were to be located in a landscaped "campus-like" setting containing joint communal facilities such a pool, barbeque areas and a tennis court. 17 A further element entitled "Green space linkages" had as its objective the making of green spaces more accessible and part of a series of open spaces threaded through the precinct for public active and passive recreation. One of its Prescriptive Measures was a through site green space link to be established between Romsey Street and Waitara Avenue and which included, as already noted, part of the Village Green and the whole of No. 28 and approximately two thirds of No. 26. 18 The nature of the landscaping, open space provisions and the linkages between them and their relationship to the built form was referred to in the DCP under the element "Site Amalgamation" as requiring the integration of buildings "into a campus-like setting with large areas of open space". 19 A further relevant element forming part of the "Strategy Controls" was that of "Density". Its Prescriptive Measures required that development should have a minimum FSR of 1.6:1 and a maximum of 2:1. However, it provided that "[t]he maximum density is only permitted where the development complies with the other provisions of this DCP."

As I have observed, the FSR of the proposal was 2.1:1 but, as the primary judge found, it did not comply with a number of provisions of the DCP. 20 The critical element for present purposes was that of "Site Amalgamation". This element formed the first of the Specific Controls in Part 3 of the DCP. It is appropriate to set it out in full: " Element Objective To provide for integrated development that achieves the required dwelling yields and equitably distribute the development potential over all existing properties Performance Criteria Development should be in keeping with the masterplans Development should achieve the maximum potential dwelling yields Buildings are to be integrated into a campus-like setting with large areas of open space The development potential of existing properties should be distributed equitably.

Prescriptive Measures Sites should be amalgamated into development sites in accordance with the site amalgamation diagram Development proposals should be accompanied by a subdivision plan which achieves a consolidation of allotments in accordance with the site amalgamation diagram "

21 Following the text was the Site Amalgamation plan which was consistent with the Masterplan insofar as it proposed amalgamation of allotments within each precinct so as to achieve with respect to Development Site 4 the proposed building locations for Buildings D1, D2 and D3 and their relationship to the Village Green/public open space as shown on the Landscape Masterplan which I have already described. 22 The only other Specific Control of relevance was the element "Setbacks". In the Orara Street precinct, a 20 metre setback between Buildings D1 and D2 was proposed, although in the text under the heading "Prescriptive Measures" it was provided that although setbacks should comply with the setback diagram, setbacks between buildings were to be a minimum of 12 metres.

Some further facts 23 Before dealing with the alleged question of law identified by Deancliff and the manner in which the primary judge dealt with the issue, it is appropriate to add the following observations to the foregoing provisions of the DCP which I have identified.

24 The primary judge found that if built according to the scale depicted in the Masterplan, Building D2 would have an east-west dimension of 35 metres and a north-south dimension of 23 metres. The proposal on the other hand, had an east-west dimension of 28.89 metres and a north-south dimension of only 14.315 metres. Accordingly, her Honour found (at [57]) that the proposal did not conform to Building D2 in plan dimensions because it was not as deep in the north-south dimension as D2 and was, therefore, inconsistent with the Masterplan. 25 The discrepancies were of some significance because at the time of the hearing before the primary judge Building D1 was under construction, essentially in the location and having the dimensions and orientation in the Masterplan. The effect of the proposal being confined to Nos. 24 and 26 owned by Deancliff was that, instead of there being a simple building erected upon Nos. 22, 24 and part of No. 26 as proposed, there would be two buildings: one of which would be the proposal and the other of which would be a similar building of similar dimensions, orientation and height erected upon No. 22 and possibly part of No. 20. 26 Accordingly, instead of there being two buildings (D1 and D2) with frontages to Orara Street, there would be three. The effect of this was demonstrated in a plan tendered before the primary judge which depicted two identical buildings of which the proposal was one and the other was immediately to its south, erected upon No. 22 and part of No. 20. This would result, firstly, in its north-facing units looking directly into the southern side of the proposal which would, being immediately to its north, have significant shadow effects in winter. This was clearly not what was envisaged by the Masterplan which provided for Building D2 to be orientated in an east-west alignment so that as many residential units as possible had both a northerly aspect and a view over the public open space including the Village Green. 27 Furthermore, Building D1 was to have its main orientation on a north-south alignment so that it presented a narrower east-west elevation to the southern elevation of Building D2, but with a significant landscaped area of 20 metres between the two. It therefore presented its main elevations to the east and west in a manner which, according to the Landscape Masterplan, would provide for views to the west over landscaped areas containing communal facilities located between Building C2 in Development Site 3 and Building A3 in Development Site 5, and views to the east over the landscaped communal areas between Building D3 in Development Site 4 and Building B2 in Development Site 6. In other words, the proposed buildings in the Masterplan have been so located as to provide for their lengthiest and primary elevations to be overlooking landscaped open space, whether public or private, rather than looking into the rear of another building as would be the case if the proposal was approved and No. 22 and part of No. 20 forced to be developed in the manner indicated. 28 These points were also acknowledged by her Honour (at [58] and [59]) to the effect that the objectives of the Masterplan by the development of Nos. 20 to 26 with a single building (Building D2) would not be achieved by the erection of two identical buildings having their main orientation in an east-west alignment where the building to the south would have its north-facing units looking directly into the southern elevation of the proposal which, according to the plans, comprised bedrooms, en-suites and the central lift well and fire stair. For obvious reasons, the balconies and living areas in respect of each of the three or four residential units per floor in the proposal faced north with views over the Village Green with uninterrupted sun.

The primary judge's reasoning 29 The first issue determined by the primary judge was the proposal's conformity with the relevant planning controls and, in particular, with what her Honour entitled "The Amalgamation and Village Green Components of the DCP". The submission of the Council, as well as May Harlow and Mr Chui, was that the four lots comprising Nos. 20-26 should be amalgamated or, preferably according to the Council's town planner, Nos. 20-28 should be amalgamated. Although it was acknowledged firstly, that cl 14(4A) of the LEP required amalgamation only to be considered and did not mandate it, and secondly, that compliance with the more detailed amalgamation provisions of the DCP was not a necessary pre-condition to the grant of development consent, nonetheless it was submitted that her Honour should not grant consent to Deancliff's development application unless she was satisfied that either the substantive outcomes of the DCP were met by the proposal (which on the Council's evidence would require amalgamation) or amalgamation could no longer occur. 30 The parties seemed to accept, and her Honour so held, that the provisions of the DCP and, in particular, this very detailed site-specific DCP, was required to be considered as a "fundamental element" in, or a "focal point" of, the decision-making process and that, as its provisions were directly pertinent to the determination of the particular development application, its provisions were "entitled to significant weight in the decision making process" although they were not determinative: see Zhang v Canterbury Council (2001) 51 NSWLR 589 at 602 [75] per Spigelman CJ, with whom Meagher and Beazley JJA agreed. 31 Her Honour accordingly considered (at [54]) that she should give significant weight to the wording of the provisions of the DCP and its diagrams. This was so notwithstanding that she found (at [53]) that, although the Council had not approved development throughout the Orara Street precinct in complete accordance with the Masterplan, and had applied a substantial degree of flexibility in its application, "the Council has nevertheless sought to implement the urban design outcomes of the DCP, to the extent it has been able to do so, given the nature of the development it has been asked to approve. The Council has, for example, been generally successful in having land dedicated for the 'Village Green'. " 32 The critical issue before the primary judge concerned the objective of the Site Amalgamation element that required "integrated development that achieves the required dwelling yields and equitably distributes the development potential over all existing properties". As I have indicated, the relevant Performance Criteria was that "[t]he development potential of existing properties should be distributed equitably." 33 Her Honour noted (at [38]) that May Harlow and Mr Chiu had argued that a factor to be taken into account in relation to the Performance Criteria which required the development potential of existing properties to be distributed equitably would be the opportunistic exploitation of the prime land within Development Site 4 if the land within that site was not developed together at the one time or was not developed in a fashion that equitably distributed the dwelling yield. Her Honour recorded the argument in these terms: "For instance, land which is not designated as 'village green' and which faces north and has its outlook over the 'village green', such as the land the subject of the applicant's development application, is favoured when compared to that land which is remote from the 'village green' and without a northern aspect. Thus it would be reasonable to expect that the owner(s) of the land designated 'village green' would seek to recoup some of the locational benefits afforded by this juxtaposition. Accordingly, the Second and Third respondents argued that unless the owner of the 'village green' land is part of the development venture adjoining the 'village green', he or she might not recoup the locational benefits of the adjoining land." 34 The primary judge thus recognised (at [49]) that a key issue in the decision-making process she was required to undertake was the manner in which she applied the Performance Criteria which called for the development potential of existing properties in Development Site 4 to be distributed equitably. Accordingly, it was necessary to ascertain the meaning of the expression "equitable distribution of development potential". Her Honour answered this question in the following terms (at [50]): "It certainly includes the distribution of dwelling yield. Does it relate to dwelling yield only or, as the Second and Third Respondents submitted, does it extend to locational advantage whereby prime land adjoining the village green has a greater value than land not so located? I accept the Second and Third Respondents' submission that, in order to achieve the urban design objectives of the DCP, it is necessary to take locational advantage into account in considering the 'equitable distribution of development potential'. This is particularly so because unless each landholder within the development site benefits through their landholding, the participation and co-operation of various land holders necessary to achieve the urban design outcomes of the DCP, particularly those relating to the 'village green', cannot be achieved. The locational advantages attaching to the land within Development Site 4, would be likely to be equitably distributed if all the land within that development site were developed at the same time in a related way. As the development sites are reduced in area there is a greater likelihood that locational inequities will result. In the present case if the subject land is developed it will overlook the 'village green'. Consequently, Mr Tanner or his companies, who own the land designated as 'village green' within Development Site 4, would not receive the locational advantages associated with the provision of the 'village green' despite the expectation under the DCP that they dedicate their land for the purpose of the 'village green'. " 35 After referring to authorities such as Zhang and concluding that significant weight should be given to the DCP, her Honour (in [55]) referred to Deancliff's town planner having submitted that an equitable distribution of the dwelling yield in Development Site 4 would be achieved by, inter alia, developing that site in the following two or three amalgamated sub-areas:

(i) the seven lots fronting Waitara Avenue and No. 28 Orara Street; and

(iii) Nos. 20-26 Orara Street. 36 Her Honour then continued: "This would achieve a FSR of 2:1 for each development. However, the locational advantages of placing a building to the south of the 'village green' would not be equitably distributed to the Second and Third Respondents. I am satisfied that the evidence indicates that the best way of achieving an equitable distribution of both the dwelling yield and the locational advantage would be to develop the five remaining lots being Nos. 20-28 Orara Street in Development Site 4. I am also satisfied that this option is more likely to ensure that the 'village green' would be provided as the developer, Mr Tanner, who owns the land designated 'village green' in Development Site 4 would get the locational advantage of land adjoining it was well."

In the light of the foregoing finding, her Honour concluded (at [56]) that the development application should be refused. 37 The primary judge also considered as part of the first issue a sub-issue which she headed "The Built Form/Landscape Components of the DCP". Having referred to the dimensions of the proposal as against those of Building D2, her Honour noted (at [58]) that, in order for her to achieve an equitable distribution of development potential over the four lots, being Nos. 20-26, in the amalgamated sub-area within Development Site 4 which were identified by the Masterplan as being covered by Building D2, a second building of similar dimensions to that of the proposal would need to be constructed about 16 metres to the south of the proposal upon Nos. 20 and 22. Thus, in place of a single Building D2, there would be two narrower buildings. She considered that that was not what was proposed by the Masterplan and would be inconsistent with it. I have made similar comments to that effect in [26] and [27] above. 38 Her Honour then turned (in [59]) to the question of vehicular ingress and egress. She noted that the DCP diagrams provided for a linked basement carpark shared between the buildings in their preferred location thus reducing the total amount of land required for vehicular ingress and egress points. This in turn, she opined, would increase the amount of landscaped area meeting the DCP stated Performance Criteria of the Site Amalgamated element of establishing a campus-like setting throughout the precinct with large areas of green open space. 39 She then concluded this issue in the following terms (at [66]): "I am of the view that, as the Council has generally adhered to the built form and masterplan in the DCP in relation to the Orara Street precinct, despite not requiring amalgamation of sites within each development site as originally envisaged in the DCP and despite approving several developments not in conformity with the built form in the masterplan, it is appropriate that the general built form of D2 be maintained if at all possible." 40 In [61] her Honour determined that the application should be refused "on this basis also" by which I understand her to mean that her refusal of the application because of its failure to conform with the general built form of Building D2 as depicted in the Masterplan was a separate and independent ground of refusal to that referred to in [55], which was founded upon the failure of the proposal to meet Performance Criteria of the Site Amalgamation element that the development potential of existing properties be distributed equitably. I mention this matter because May Harlow and Mr Chui submitted that even if her Honour erred in law with respect to the meaning of the expression "The development potential of existing properties should be distributed equitably", nevertheless she had refused the application on a separate and independent ground in respect of which there was no challenge as a consequence whereof there would be no utility in remitting the matter to the Land and Environment Court with the result that the appeal should in any event be dismissed.

Did the primary judge misinterpret the phrase in the DCP "The development potential of existing properties should be distributed equitably?" 41 The only question of law raised by the above question is whether the locational advantages or disadvantages identified by the primary judge as resulting or likely to result from the approval of the proposal were to be regarded as necessarily relevant or necessarily irrelevant to the development potential of existing properties within Development Site 4 which was required to be equitably distributed over all the properties within that site by the device of site amalgamation. If they were necessarily irrelevant to the equitable distribution of that development potential, then to take them into account in the process of distribution would be wrong in law. 42 On the other hand, if they were necessarily relevant to the process or if they were capable of being either relevant or irrelevant to that process according to the relative significance attached to them by the decision-maker, than a decision either way would involve only a question of fact and cannot be disturbed by this Court which is concerned only with questions of law: Australian Gas Light Co v Valuer-General (1940) 40 SR (NSW) 126 at 138; Hope v Bathurst City Council (1980) 144 CLR 1 at 10; Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 156; Randwick Municipal Council v Manourdic (1988) 66 LGRA 330 at 333. 43 Deancliff submitted that nowhere in the DCP was there any reference to the phrases "locational benefits", "locational advantage" or "locational inequities". They were, therefore, quite foreign to its provisions. And yet there was no doubt that her Honour considered (at [55]) that Nos. 20-28 should be amalgamated as "the best way of achieving an equitable distribution of both the dwelling yield and the locational advantage"

of the proposal's location immediately to the south of the Village Green thus providing for uninterrupted views onto and across public open space with no issue of overshadowing of the northern living areas of its residential units. 44 Deancliff therefore submitted that her Honour had, in effect, taken into account an irrelevant consideration as there was nothing in the DCP that required locational advantages, benefits or inequities to be taken into account when considering the manner in which the development potential of existing properties should be equitably distributed. It was contended that under the "Site Amalgamation" Element of the DCP, all that was intended was that development should achieve the maximum potential dwelling yields and that buildings should be integrated into a campus-like setting which the proposal achieved. 45 Her Honour thus erred in taking into account what, it was submitted, was private interest profit motives such as "locational benefits", "locational advantages" or "locational inequities" when she referred (at [50]) to the subject land, because it adjoined the proposed Village Green, as having a greater value than land not so located. The planning objective of equitably distributing the development potential of existing properties did not have an economic dimension and this was so notwithstanding that No. 28, which was owned by May Harlow, was not intended to be developed at all but was to form part of the Village Green/public open space in accordance with the Landscape Masterplan of the Orara Street precinct and, ultimately, to be dedicated to the Council for that public purpose. This was so also notwithstanding that all the land in the precinct was zoned Residential D (High Density) although, if the provisions of the DCP were to be implemented, only some of the land so zoned was intended to have buildings erected thereon. 46 The Council submitted that the concept of "locational advantage" referred to by the primary judge was neither a term of art nor an irrelevant consideration. On the contrary, it was nothing more than a shorthand manner of describing the advantage that some land owners had over others within the same development site area as a consequence of the provisions of the DCP and, in particular, the Precinct Masterplan and the Landscape Masterplan. It was as a consequence of the requirement of the DCP that development be consistent with the urban design guidelines and in keeping with the urban form provided in the Masterplan diagrams that there was a need for site amalgamation. It was as a matter of fairness to those landowners who were deleteriously affected by the Masterplan in that their particular land holdings were not identified for the erection of buildings thereon that the development potential of the land owned by those landholders whose land was so identified was to be equitably distributed amongst all the landholders within the development site by requiring site amalgamations. 47 In other words, the notion of locational advantages and disadvantages related to the fact that pursuant to the Masterplan certain land was identified for the construction of high density residential flat buildings therein and other land identified only for open space purposes, with the obvious consequence that the latter would be less valuable as an identifiable parcel of land than land on which multi-unit housing construction was proposed. Thus those allotments which were so earmarked for building in the urban design guidelines in the Masterplan would be "advantaged" by their location in comparison to those which were not: hence the resultant "inequities" with respect to the development potential of particular allotments between existing land holders and which were to be addressed by site amalgamation in order to achieve the equitable distribution of that development potential over all existing properties within the Development Site. 48 Thus, so it was contended, land earmarked for open space was to be amalgamated with high yield land as a consequence of which the "value" of the former would be increased whereas that of the latter would be reduced. A balancing process was thus required because some lots were locationally disadvantaged by being earmarked for open space whereas others were locationally advantaged by being earmarked for high-density residential buildings. 49 May Harlow and Mr Chui adopted the Council's submissions and added the point that the discussion by her Honour of "locational benefits", "locational advantages" or "locational inequalities" involved no more than a practical and commonsense explanation of how the objective in the DCP of equitable distribution of development potential could be achieved in light of the particular facts and circumstances relating to the Orara Street precinct within which the subject land was located. 50 It cannot be gainsaid that, as a consequence of the provisions of the Masterplans in their application to Development Site 4, the development of the subject land by the proposal and without site amalgamation would result in, firstly, No. 28 being isolated and incapable of development as it is earmarked for public open space; secondly, Nos. 20 and 22 being isolated from the Village Green; and thirdly, the need for any building erected on Nos. 20 and 22, in order to maintain the dwelling yield, to be designed so that its main elevation has an east-west alignment rather than north-south alignment as a consequence whereof its northern elevation will be set back only 12 metres from the south elevation of the proposal which will significantly impact upon the amenity of the residential units within that building both in terms of outlook and overshadowing. 51 It must follow from the foregoing that the development potential of the subject land, if it is to be developed as proposed, is significantly greater in terms of the environmental amenity of the residential units which it is to accommodate than that of any development on Nos. 20 and 22 and the total lack of development potential of No. 28. To permit these discrepancies in development potential to lie where they fall would be to ignore the objectives of the Site Amalgamation Element of the DCP which was to "equitably distribute the development potential over all existing properties". That objective was to be implemented by the Performance Criteria of equitably distributing the development potential of the existing properties over all properties within Development Site 4. 52 Two further points need to be noted. Firstly, the objectives of the Site Amalgamation Element has two parts: the first is to provide for integrated development that achieves the required dwelling yields; the second is to provide for integrated development that equitably distributes the development potential of Development Site 4 over all its existing properties. It must follow, as was alluded to by the primary judge [at 50] of her judgment, that the phrase "equitable distribution of development potential" includes more than just the distribution of dwelling yield. Secondly, the expression "development potential of existing properties" refers to the development potential determined in accordance with the provisions of the Masterplan of the individual lots comprised within the Development Site. That potential, as I have already observed, varies depending upon the location of the particular property within the urban design proposals contained in the Masterplan and the Landscape Masterplan. It thus follows that the development potential of the lots within the Development Site varies depending upon their particular location within that Site. In some cases that will result in a locational advantage and in some cases a locational disadvantage. 53 In my opinion, therefore, it follows that determining how the development potential of the existing properties within Development Site 4 is to be equitably distributed over all existing properties in the Site, as the objective of the Site Amalgamation Element seeks to do, necessarily requires those locational advantages and disadvantages to be taken into account in the exercise which is to be undertaken in accordance with the Performance Criteria in the implementation of the Element objective. Obviously, the locational advantages and disadvantages to which I have referred have an economic impact upon the particular landholder. However, contrary to the submission of Deancliff, I do not regard that factor as of any consequence.

Conclusion 54 Accordingly, for the foregoing reasons, in my opinion no error of law has been demonstrated in the primary judge's construction of the objective or Performance Criteria of the Site Amalgamation Element that provides for the development potential of existing properties to be distributed equitably over all existing properties within Development Site 4. As Deancliff has conceded that if it is unsuccessful in respect of this issue in the appeal it will be unnecessary to consider the alternative bases upon which it was submitted that her Honour erred in law, it follows that the appeal should be dismissed with costs. 55 BROWNIE AJA: I agree with Tobias JA. **********

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