Estate Constructions of Australia Pty Limited v Council of the City of Sydney

Environmental Planning and Assessment Act 1979 Residential Flat Design Code LEGISLATION CITED: Sydney Development Contributions Plan 2006 South Sydney Development Control Plan 1997 State Environmental Planning Policy No 70 - Affordable Housing South Sydney City Council's Green Square Affordable Housing Development Control Plan

DATES OF HEARING: 22/10/2007, 23/10/2007 and 24/10/2007

APPLICANT Ms S. Duggan, solicitor Instructed by Ms J De-Torres of Henry Davis York LEGAL REPRESENTATIVES:

RESPONDENT Mr M. Craig, QC Instructed by Ms C. Rose of Maddocks

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

10074 of 2007 & 10054 of 2007 Estate Constructions of Australia Pty Limited v Council of the City of Sydney This decision was given extemporaneously. It has been revised and edited prior to publication.

JUDGMENT 1 On 23 June 2005 the City of Sydney Council approved a four-stage master plan ("the Master Plan") for land comprising the Sydney Gate site at the southeast corner of Lachlan and Bourke Streets, Waterloo.

2 The four stages comprising Blocks A, B, C and D provide for the redevelopment of the site for large scale residential, commercial and retail purposes together with certain public domain works. These two appeals under s 97 of the Environmental Planning and Assessment Act 1979 ("the Act") relate to Blocks A and B.

3 The first appeal relates to a development application dated 24 July 2004 for the development of Block A that is situated at the corner of Lachlan and Bourke Streets generally in accordance with the Master Plan. That development comprises a 2 to 9-storey commercial/retail building with basement car parking and associated road construction and landscaping.

4 This development application has not been determined by the council and the appeal was made on the basis of the application's deemed refusal. The principal issue of concern in relation to this development application involves overshadowing of the neighbouring residential flat building at 11A Lachlan Street to the east and the proposed public open space to the south.

5 The second appeal relates to a modification application under s 96(1A) of the Act for the amendment of the deferred commencement development consent granted by the council for the development of Block B. This consent dated 25 November, 2005 is for the construction of a 9 to 11-storey mixed residential and retail building containing 259 dwellings and 5 retail units with associated car parking.

6 The modification application seeks changes to the consent in relation to the configuration of 58 dwellings within the development mainly by converting 1 bedroom dwellings to 2 bedroom dwellings and 2 bedroom dwellings to 3 bedroom dwellings within the existing approved building envelope.

7 The modification application was refused by the council on 22 January, 2007 for reasons involving the unsatisfactory amenity of some of the amended dwellings resulting from them having insufficient or unsatisfactory internal living areas and balconies. This became the principal issue in relation to the modification appeal.

8 As a result of a number of observations made by myself in relation to the principal matters in issue for both appeals and subsequent discussions between the parties' experts the applicant produced amended plans for body developments that now sufficiently meet the concerns of the council such that the issues of concern are no longer pressed.

9 I have examined the plans and accept them as being satisfactory. I particularly note the changes made in terms of overshadowing from block A and the residential amenity of the dwellings in Block B. In this regard I note the agreement arrived at between Mr J Harrison, the applicant's consultant town planner, and Ms S McMahon, the respondent's town planner and the requirements of the Residential Flat Design Code and the relevantly applicable provisions of the South Sydney Development Control Plan 1997.

10 I have now been provided with conditions of consent for both matters, these conditions now being largely agreed between the parties. These conditions each contain deferred commencement conditions that provide for the owner entering into a planning agreement under s 93F of the Act which conditions are unopposed by the applicant except for the requirement that the associated monetary contributions be paid prior to the release of a construction certificate. The conditions also contain requirements for contributions under s 94 of the Act that are to be paid before the issue of a construction certificate and conditions requiring the payment of affordable housing contributions also prior to the issue of a construction certificate.

11 The applicant agrees with these monetary contribution requirements but submits that they need only be paid prior to the release of any occupation certificate and that the conditions should be amended accordingly. For the entire master plan site these contributions amount to about $7.4 million. 12 For Block A the s 94 contributions amount to about $1.7 million and the affordable housing contributions amount to about $0.6 million.

13 For Block B the s 94 contributions amount to about $4.1 million and the affordable housing contributions amount to about $3.2 million.

14 Section 94 of the Act provides that where the development for which consent is sought will or is likely to require the provision of or increase the demand for public amenities and public services a condition of consent may be imposed requiring a reasonable contribution towards these amenities and services. In this regard there was no dispute that there is a demand resulting from the two development proposals for the amenities, facilities and services referred to in the conditions.

15 Section 94 does not, in relation to the future provision of public amenities and public services contain any provisions as to when the payments or land dedication, if that were required, should be made. However, the City of Sydney Development Contributions Plan 2006 upon which the agreed contributions rely does this in s 2.2. It requires that in relation to development involving construction work only (and here I assume that this does not exclude the subsequent use of the building) the contributions are required to be paid in full before the approved construction certificate is released.

16 The provisions of the Act dealing with voluntary planning agreements do not contain any provisions as to when any payments referred to in such an agreement should be made but do not exclude the possibility of including such a requirement.

17 In relation to affordable housing ss 94F and 94G of the Act enable the imposition of conditions of consent in accordance with a State environmental planning policy requiring the dedication of land for the payment of a monetary contribution for this purpose. In this regard State Environmental Planning Policy No 70 - Affordable Housing ("SEPP 70"), is relevantly applicable to these development applications, the sites comprising land within the Greater Metropolitan Region and the local government areas of the City of South Sydney and the City of Sydney, these being identified as having a need for affordable housing.

18 Other than making a requirement with respect to the imposition of conditions relating to the provision of affordable housing SEPP 70 does not indicate (in the manner of s 94 of the Act) that the need for such housing arises from the development for which consent is sought, nor does it contain any provisions as to when the payments or land dedication should be made.

19 In this regard I was referred to the South Sydney City Council's Green Square Affordable Housing Development Control Plan ("the Green Square DCP"). This DCP in its terms is subject to the South Sydney Local Environmental Plan 1998 and can be considered in relation to SEPP 70 and in the context of s 79C of the Act.

20 Section 3.3 of the Green Square DCP sets out how monetary contributions towards affordable housing as required in a condition of consent are to be made. In particular, it requires that before the granting of any construction certificate the applicant must provide evidence to council of payment of the contribution. In the alternative, the applicant can provide a bank guarantee. Such a condition of consent will, according to the Green Square DCP, be satisfied when payment has been made and that evidence to this effect will be required before the granting of any occupation certificate.

21 Central to the submissions made on behalf of the respondent is the notion of coincidence of completion. In other words, any demand of public services and public facilities arising from development proposals should be able to be met by the authorities concerned at the time when that demand occurs, in this case by the occupation of the buildings. The inference of this is that the services and facilities can be provided if the payments are made prior to the issue of a construction certificate. Conversely, the making of the payments for these services and facilities at the time of the issue of the occupancy certificates is simply too late. Hence the conditions requiring the payments be made when the construction certificates are issued are reasonable.

22 The applicant's submissions contain several elements. Firstly, the quantum of the contributions as referred to above is such as to make payment at the construction certificate stage rather than at the occupancy certificate stage, unreasonable. Second, the s 94 contributions relate to demand and there is no actual demand until the dwellings and the commercial floor space is occupied. Also, s 94 allows the provision of services and facilities into the future as can be provided for in works plans. Similarly, the applicable affordable housing requirements are not based on a demand generated by these developments. Third, all of the associated and immediate demands for services and facilities are catered for by the developments themselves, for example, roads, parks and child care facilities. The applicant also submits that contributions towards the categories of management, the art program and the administration centre do not suddenly become critical when the developments are occupied. 23 It is also of concern to the applicant that the council would receive a windfall financial benefit if the developments do not proceed, taking into account the difficulties of recouping such contributions. However, I give no weight to this submission.

24 Whilst the contributions plan requires that the contributions be paid in full before the approved construction certificate is released it is my opinion that, in the circumstances of this case this requirement is unreasonable for essentially the reasons marshalled on behalf of the applicant.

25 In order to accept the respondent's proposition in relation to the s 94 contributions I would need to be persuaded that the moneys paid by the applicant would not only be expended but the amenities, facilities and services be actually provided at the time of occupation of the two developments. There was no evidence to show how this could occur, particularly taking into account the array of services and facilities provided for in the conditions and especially with these being provided on an ongoing basis. I also heard no evidence to suggest that there would be a significant absence of any reasonably necessary services and facilities for those occupying these developments after completion.

26 For the same reasons and bearing in mind that there are no planning controls for voluntary planning agreements in relation to the timing of contributions I find that the requirement for payment of these contributions at the construction certificate stage is unreasonable and should not be imposed.

27 As for the requirement for the payment of contributions for affordable housing the very provisions of the SEPP 70 do not require that the Department of Planning have the required moneys as distinct from a bank guarantee on hand before the release of any occupancy certificate. Taking this into account together with the fact that there is no evident demand for the provision of affordable housing as a direct consequence of these developments and for the same reasons as I have expressed in relation to the s 94 contributions I find that the requirement for the payment of these contributions at the construction certificate stage to be unreasonable.

28 I also accept that in relation to all three categories of contribution that the very significant dollar value can be taken into account although whilst weighing against early payment this is not by itself determinative.

29 I have therefore decided to uphold both of the appeals.

30 In relation to matter No 10054 of 2007 the development application is approved and development consent as sought is granted subject to the agreed conditions with the proviso as I have already discussed that contributions be required to be made prior to the release of any occupancy certificate.

31 Similarly, in relation to matter No 10074 of 2007 the development consent is amended in accordance with the agreed conditions, again with the proviso that contributions be required to be made prior to the release of any occupancy certificate.

32 Exhibits M and H are retained on their respective files. The plans which are Exhibits C and J are retained on their respective files and when I have the amended conditions, which will become exhibits, 14 and 15, they will also be retained, otherwise the exhibits are returned.

      T A Bly
      Commissioner of the Court
      A.K./ljr

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.