IPM Pty Ltd v Mosman Municipal Council

Land and Environment Court (NSW)|2014-03-26

Mr M Staunton, barrister (Respondent) Henry Davis York (Applicant)

Pikes and Verekers (Respondent) File Number(s): 10528 of 2013

Judgment 1This is an appeal against the refusal by Mosman Municipal Council (council) of development application 8.2012.114.1 (the Application) for the reconfiguration of the ground level from the approved three retail tenancies into two retail tenancies and the fit out and use of one tenancy for retail liquor premises (Dan Murphy's) and associated signage at 710 Military Road, Mosman (site). 2The key dispute between the parties is whether the site is suitable for the proposed use due to the impacts of traffic and noise on the residential amenity of the area.

The site and its locality 3The site is located in Spit Junction on the northern side of Military Road, between Civic Lane and Field Way/Mandalong Road. It has an area of 1530sqm with a frontage of 37.69 m to Military Road and 38.065m to Horsnell Lane at the rear. 4The site is developed with a recent five storey mixed use building with 32 residential units and ground floor retail constructed over an existing basement car park. The residential units are occupied and the retail is vacant. 5To the east, the site adjoins the Mosman Fire Station (730 Military Road) and, to the west, it adjoins a three storey masonry building used as a shop (706 Military Road). To the north, on the opposite side of Horsnell Lane, are two residential buildings (11-17 and 5-9 Clifford Street), which have vehicular access from the lane and also have frontages to Clifford Street. Horsnell Lane connects to Clifford Lane to the west and to Field Way to the east. There are two residential flat buildings which front the eastern side of Field Way (1 Field Way and 3 Clifford Street). The surrounding area consists of a mix of residential, retail and commercial development.

Planning framework 6The site and Horsnell Lane are within the B2 Local Centre zone under Mosman Local Environmental Plan 2012 (MLEP). The proposed development is permissible with consent. The Fire Station and Military Road are zoned SP2 Infrastructure and land to the north and east of the site, including Field Way and Mandalong Road, are within the R3 Medium Density Residential Zone. 7Mosman Business Centres Development Control Plan (DCP) applies to the development. Part 4.3.1 refers to the Spit Junction Business Centre and Part 6 includes provisions for Advertising and signage (Part 6.2), Visual and acoustic privacy (Part 6.6), Transport access and parking (Part 6.11) and Waste management (Part 6.15).

Background and the proposal 8On 23 February 2012, the Joint Regional Planning Panel (JRPP) approved a development application (8.2011.232.1) which was modified by the Mosman Development Assessment Panel (MDAP) on 20 March 2013. The development is for the demolition of the existing building (known as "Cache"), except for the basement car park, and erection of a five storey mixed use building comprising ground floor retail and 32 residential apartments (Approved Development). 9Condition 90 of the Approved Development requires a minimum of 89 car spaces to be provided on site (40 resident spaces, 9 resident visitor spaces to also be utilised as public car parking spaces, and 40 shop/public car parking spaces). 10Condition 116 of the Approved Development requires the Basement carpark (excluding the 40 resident spaces) to be controlled and managed by council as a free public carpark available for all members of the public. 11Condition 120 of the Approved Development restricts the length of delivery vehicles to a maximum of 6.5m to ensure that only vehicles that are suitable for the local street network and size of the delivery bay on site are used. 12The Application was lodged on 8 June 2012. It comprises:

reconfiguration of the ground floor of the approved building from three retail tenancies to two retail tenancies, being 948sqm and 65sqm.
the fit out and use of the 948sqm tenancy for a retail liquor premises (Dan Murphy's) including a main retail area, cool room, back of house facilities, storage areas, a loading dock and ancillary offices.
associated 'Dan Murphy's' signage on the Military Road frontage, Horsnell Lane frontage and east elevation. 13The Application seeks to permit the use of the loading dock by vehicles up to a maximum of 8.7m in length. An Operational Plan of Management (PoM) would limit the number of trucks to one truck per hour between 9am -3pm (a total of six trucks per day comprising 3 x 6.5m vehicles and 3 x 8.7m vehicles). In addition, there would be a maximum of four delivery vans per day which could park in the carpark before 9am and after 3pm or in the loading dock at other times. The parking for staff and customers would be in the basement car park and would be the same arrangement as that in Condition 90 of the Approved Development. 14The hours of trading would be 9am to 9pm Monday to Saturday and 10am to 7pm on Sundays. 15On 10 March 2014, a Complying Development Certificate (CDC) under State Environmental Planning Policy (Exempt and Complying Development Codes) 2008 (SEPP) was issued for the first use of the major tenancy as a liquor store and the minor tenancy as general retailing. The parties disagree on the validity of the CDC but this is not a matter to be determined in this appeal. The CDC does not permit the use of trucks greater then 6.5m as this would contravene Condition 120 of the Approved Development (cl 5.6 of the SEPP). The CDC must also be subject to the conditions in Schedule 8 (cl 5.25 of the SEPP), which include hours of operation, noise and use of the car driveways and car spaces. The Application seeks approval for matters "approved" in the CDC, including the reconfiguration and use of the premises for retail liquor premises, as well as additional matters such as servicing by larger trucks. The existence of a CDC does not alter the obligation on the Court to assess the application that is before it under s 79C of the EPA Act. Whether or not parts of the development could proceed under a CDC is not of relevance to the development that is the subject of the development application that is before the Court, other than a broad public interest consideration. 16An appeal against the refusal of an earlier development application to refurbish the Cache building for use as a supermarket was dismissed by Hussey C on 14 January 2011 (FKP Funds Management Pty Ltd v Mosman Council [2011] NSWLEC 1000)

Evidence 17The Court visited the site and surrounding area and heard from objectors to the Application, including the Zone Commander of NSW Fire, Superintendent McNamara. The concerns of the objectors reflected the contentions raised by council. Superintendent McNamara was principally concerned about the ability of fire engines to exit the station in the event of an emergency if traffic was queued along Military Road. In his opinion, Military Road is already congested and the Station experiences operational difficulties that would be exacerbated by the increase in traffic generated by the proposal. The Applicant has offered to provide line marking outside the station to prevent access being blocked, which was supported by Superintendent McNamara, but he did not accept that this would resolve the issue and referred to a similar situation in Crows Nest. 18The objectors shared Superintendent McNamara's concerns about traffic in Military Road and were particularly concerned about the increase in traffic using the laneways around the site. They considered that the number of cars and trucks likely to be generated by the proposal would have unacceptable impacts on their amenity through traffic congestion and conflict, pedestrian and vehicular safety and noise. Concerns were also raised about the social impacts of the sale of discount alcohol. 19The residents of the development considered that they had purchased their units based on the three retail tenancies in the Approved Development which they considered would be small specialty shops with a 6.5m limit on truck sizes. Similarly, the residents in 11-17 and 5-9 Clifford Street were concerned about the increase in traffic and the potential conflict with pedestrians, cars and large trucks reversing into the loading dock and their ability to access their driveways. They were also concerned about noise likely to be generated by truck and traffic movements as well as by patrons using Dan Murphy's. 20The Court heard expert evidence from:

Mr T Rogers (applicant) and Mr J Coady (council) on traffic and parking issues
Dr R Tonin (applicant) and Mr S Cooper (council) on acoustic issues
Mr J Harrison, (applicant) and Mr K Nash (council) on planning issues. 21The traffic experts disagree on the likely parking demand and traffic generation of the proposal. The parties agree that it is necessary for me to make findings on these matters to determine the noise levels and the impacts of the proposal on residential amenity.

Parking and traffic What is the likely traffic generation? 22Colston Budd Hunt & Kafes (CBHK) undertook surveys of Dan Murphy's stores at Alexandria, Burwood, Manly Vale and Wentworthville. Mr Rogers considered that the average traffic generation rate in the CBHK surveys provides an appropriate basis for calculating the traffic generation of the proposal. Although he accepted that the Burwood rate is atypical and should be excluded. 23Mr Coady accepted that the base average generation rates are appropriate for assessing the proposal (Option 1), however, he considered that a sensitivity analysis should be applied (Option 2). He raised concerns with the surveys, including whether they included the traffic generation of vehicles not parked in the car park serving the store (ie on the street or in other carparks). He referred to his own experience with the Manly Vale Dan Murphy's store where people park in the street or in the KFC carpark. He considered a survey of users of the stores should have been done to determine if they parked in the Dan Murphy's carpark or elsewhere. 24Mr Coady also noted that the proposed Dan Murphy's store is smaller in floor area than the shops surveyed, being about two thirds of the average floor area. He did not accept that there is a direct correlation between traffic generation and store size and considered that the proposed store may generate greater traffic than two thirds the traffic generation rate in the surveys. In his opinion, the Wentworthville Dan Murphy's (1120sqm) is the most comparable in size to the proposal (948sqm) but has a higher traffic generation rate to the stores surveyed. Mr Coady noted that Wentworthville is 73% the size of Manly Vale Dan Murphy's store and should therefore generate 73% of Manly Vale's traffic (198 weekday peak and 95 Sat peak) but generates 218 on weekday peak (12% more) and 184 Sat peak (95% more). He therefore recommended that the traffic assessment of the proposal should be subject to a sensitivity analysis with a higher traffic generation rate than the average in the surveys. He undertook a sensitivity analysis (Option 2) based on the highest traffic generation rate in the CBHK surveys (Alexandria Friday January 2013) of 25.7/100sqm (rounded to 26). 25The different traffic generation rates for each option are set out in Table 1: TABLE 1 Average traffic generation rates (vtph) based on CBHK surveys (excluding Burwood) Traffic generation (vtph) Fri PM Sat Pm Fri PM Sat PM Base (Option 1) 21.7/100sqm 15.1/100sqm 219 159 Sensitivity analysis (Option 2) 26/100sqm 263 216

26Mr Rogers considers the sensitivity analysis is an unreasonable basis upon which to determine the likely traffic generation of the development. He accepted there is no direct correlation between store size and peak traffic generation, but considered there is no reason to assume that a Dan Murphy's located in Mosman would produce traffic generation in excess of the surveyed stores. These stores are located on main roads carrying higher volumes of traffic than Military Road; have direct access from a main road; and are located in less densely developed areas than Mosman with less potential for people to walk. Consequently, he considered the generation rate might be less than that estimated using the average from the survey results. What is the traffic generation of the Cache development and the Approved Development? 27The experts held different opinions about the type of shops in the Cache development and Approved Development. 28Mr Coady reviewed the development consents for the Cache development and concluded that the traffic generation of the retail component should be based on the rate for "specialty shops and secondary retail" (99 vtph Fri and 189 vtph Sat). Mr Rogers initially considered the Cache development had the traffic generating characteristics of a "small shopping centre" (222 vtph Fri and 290 vtph Sat). He conceded, having heard the evidence of residents, that the traffic generation from Cache was more akin to "specialty shops" but noted that the specialty shop category refers to secondary retail where stores are grouped as they tend not to be primary attractors to the centre and accordingly he considered it too conservative to assume that the Cache use should be based solely upon the specialty shop traffic generation use. 29To estimate the traffic generation of the Approved Development, Mr Coady assumed a traffic generation rate based upon "specialty shops and secondary retail" (63 vtph Fri and 120 vtph Sat). Whereas, Mr Rogers assumed a traffic generation rate based upon the "small shopping centre" rate (140 vtph Fri and 182 vtph Sat). The experts agreed that the larger of the approved retail spaces (315 sqm plus a back of house component) could be used for a fruit shop, a liquor store or a discount chemist, which would result in a traffic generation greater than that applicable to specialty shops, but that this would be subject to a further development consent and the limitations on the size of delivery vehicles and the loading dock. What is the likely parking demand? 30The basement car park was retained under the Approved Development. It provides 98 spaces of which there are 40 resident spaces, 9 resident visitor spaces/public car parking spaces and 40 shop/public car parking spaces. 31Consequently, there are 49 spaces available for use by Dan Murphy's and the small retail store that are to be also used as a public car park, including the resident visitor spaces. Currently the public carpark permits parking for up to three hours. 32Mr Coady identifies a short fall of three spaces for the parking provision for Dan Murphy's but agrees with Mr Rogers that the number of onsite parking spaces is generally adequate to serve the proposed development. However, Mr Coady is concerned that the 49 spaces are also to be used as a public carpark and that Dan Murphy's customers will not have exclusive right or priority to use the spaces. In his opinion, this will result in the carpark being regularly filled to capacity because a proportion of the car spaces will be used by people who are not customers of Dan Murphy's. If the carpark is full, some motorists will queue in Horsnell Lane, exacerbating traffic congestion, or circulate in the road system seeking alternative parking. Purchases from Dan Murphy's may need to be transported by trolleys to vehicles parked in the street, which will result in abandoned trolleys within these streets. He acknowledged that this could be addressed by fitting magnetic locks to the trolleys so that they cannot leave the carpark. 33Mr Rogers considers that there is a public benefit in permitting the dual use of the carpark by customers of Dan Murphy's and the public as this will result in an increase in parking supply or availability within the Spit Junction business centre and will provide greater flexibility for parking within that area. The conditions propose electronic signage to inform potential users of the carpark of the available spaces, which will limit the likelihood that drivers will circle the area or queue in the laneway. He considered that a magnetic strip or a coin operated trolley with regular collection is an appropriate way to prevent trolleys being left in the surrounding streets. 34Mr Coady also raised concerns that the existing carpark does not comply with the Australian Standard and that these deficiencies will be exacerbated by the proposed shared use and the number and frequent turnover of vehicles. Mr Rogers considers that the carpark is existing and has been used and recently approved as a retail/public carpark.

Findings Traffic generation 35I accept that there are some questions as to the extent to which the average figures in the CBHK surveys should be relied on to calculate the average traffic generation rate of the proposal. In particular, it cannot be assumed that there is a direct correlation between the size of the store and the likely traffic generation. The proposal is smaller than the surveyed stores but is a "new push" for Dan Murphy's in terms of store size. The most comparable in terms of size is Wentworthville which generates a greater demand for carparking than the other larger stores. I accept Mr Coady's evidence that Dan Murphy's would provide an extensive product range and be a destination store and as such it could generate greater traffic than the surveyed average of 21.7/100sqm Fri PM and 15.1/100sqm Sat. Although, I do not accept the sensitivity analysis for both Fri PM and Saturday being based on the highest traffic generation rate in the surveyed results. 36Even if I accept the average rates in the survey (Option 1) agreed to by the experts as an appropriate base to determine traffic generation, it is unclear how the traffic generation of 219 vtph Fri PM and 159 vtph Sat have been calculated. Mr Staunton submits that they do not include the public car park and are based on Table 2.2 in Mr Rogers' Statement of Evidence (Exhibit J) which stated the size of the Dan Murphy's retail to be 925sqm. Table 2 below provides revised traffic generation for the proposal calculated on the traffic generation rates for the uses in Table 2.2 and the average peak traffic generation rates per 100sqm in the CBHK survey (excluding Burwood) applied to the retail floor area for the proposed Dan Murphy's (948sqm). TABLE 2 Size Generation Rates Traffic Generation (vtph) PM Saturday PM Saturday Dan Murphy's 948 sqm 21.7/100 sqm 15.1/100 sqm 205 143 Retail 65sqm 12.5/100 sqm 16.3/100 sqm 8 11 Residential 32 units 0.29/unit 0.29/unit 9 9 Public spaces 12 spaces 1/space 1/space 12 12 Total 234 175

37Based on Table 2, the figures of 219 vtph Fri PM and 159 vtph Sat PM in Option 1 appear to be low, and the sensitivity analysis recommended by Mr Coady would also result in higher figures. However, even based on the lower figures in Option 1, the proposal will generate a high volume of traffic, particularly if this is compared to the traffic that was likely to have been generated by the Cache Development and under the Approved Development. Mr Coady and Mr Rogers disagreed on the approach to calculating this traffic generation based on the nature of the shops that were in the Cache development and would be likely in the Approved Development. Mr Rogers' opinion that the proposal would generate acceptable traffic levels relied heavily on his estimates for Cache and the Approved Development and that Dan Murphy's would generate less or similar traffic levels. 38I accept Mr Coady's evidence that the Cache development is appropriately characterised as "specialty shops and secondary retail" as this is supported by the history of development consents, the evidence of the residents and was generally accepted by Mr Rogers. The resident evidence also indicated that the Cache development was not frequently serviced by trucks. 39The three shops in the Approved Development are also best categorised as "specialty shops and secondary retail". I acknowledge that it may be reasonable to increase the traffic generation for the retail component of the Approved Development above the 63 estimated by Mr Coady given that there is the potential for the larger shop to be used for a more intense use. Although, this would be subject to a further development application, which is required under the conditions of consent for the Approved Development. These conditions also limit the size of delivery trucks to a maximum length of 6.5m. Furthermore, the Traffic Report that supported the Approved Development (although based on 750sqm of retail space) estimated 85 peak traffic movements. 40Table 3 below provides a comparison of the traffic generation of the Cache based on Coady's figures; options for the Approved Development based on the Traffic Report, Mr Coady's figures and Mr Rogers' figures; the agreed base for the Proposal (Option 1); and Mr Coady's sensitivity analysis for the Proposal (Option 2). The figures do not appear to include an allowance for the public car parking. TABLE 3 Size (sqm) Traffic Generation Rates Traffic generation (vtph)

Fri PM Sat Fri PM Sat Cache retail 1764 5.6/100sqm 10.7/100sqm 99 189 commercial 425 2/100sqm 9 0 Total 108 189

Approved Development (Traffic report) retail 750* 10/100sqm 75 residential 35* units 0.29/unit 10 Total 85

Approved Development (Coady) retail 1117 5.6/100sqm 10.7/100sqm 63 120 residential 32 units 0.29/unit 0.29/unit 9 9 Total 72 129

Approved Development (Rogers) retail 1117 12.5/100sqm 16.3/100sqm 140 182 residential 32 units 0.29/unit 0.29/unit 9 9 Total 149 191

Proposal Base adopted by Coady and Rogers (Option 1) 21.7/100sqm 15.1/100sqm 219 159 Sensitivity (Coady) (Option 2) 26/100sqm 26/100sqm 263 216

based on 1117sqm of retail floor space and 32 units the traffic generation would be 120 vtph 41Based on these figures, it would appear that during the weekday peak the proposal, even on the agreed Base (Option1), would result in a significant increase in the traffic generation compared to the Cache development and the Approved Development. During the Saturday peak, other than Mr Coady's figures for the Approved Development, there would be a reduction in traffic generation. However, it is interesting to note that the traffic generation rates generally have a higher rate during the Saturday peak when compared to the weekday peak, which is the opposite to the average generation rate in the CBHK surveys and the proposal. 42These traffic generation rates are similar to the peak generation rate of 230 vtph in FKP which Hussey C found to be unacceptable due to the constrained context and access to the site. Parking 43The DCP requirement for parking is 1 space per 16sqm of retail floor space. The Approved Development indicated 735sqm of retail floor space (in the approved plans) and 750sqm of retail floor space (in the traffic report), which under the DCP required 47 spaces and was met by the shared parking arrangement. However, this did not include the storage/back of house retail floor space (382sqm). The retail floor space of the Approved Development is therefore 1117sqm, which under the DCP would require 70 car parking spaces. Under the DCP, the carparking required for the retail floor space of Dan Murphy's (948sqm) is 60 and the retail shop (65sqm) is 4. 44Under the RTA Guide, Mr Rogers would categorise the Dan Murphy's use as a 'Fast Trader' (A(F)) which has a rate of 1 space per 25sqm, resulting in a requirement for 38 spaces plus parking for the small retail. The Dan Murphy's stores in the CBHK surveys have an average parking rate of 1 space per 24 sqm, which equates to 40 spaces for Dan Murphy's. Under the RTA Guide 'Specialty Shops and Secondary Retail' has a higher parking rate of 1 space per 22.2sqm. Mr Coady considers the Cache and the Approved Development would be categorised as 'Specialty Shops and Secondary Retail' and under the RTA Guide the Approved Development would require 50 spaces. 45Specialty shops and the public car park have a slow turnover of spaces and consequently a higher parking rate (but lower traffic generation rate) whereas Dan Murphy's as a "Fast Trader" has a high turnover of spaces and consequently the parking rate is less as each space may be used more often but for shorter periods (but with higher traffic generation). 46The traffic experts accept that the car spaces provided will meet the needs of Dan Murphy's. The only disagreement is whether, because the spaces are shared with residential visitors and users of the public car park, the demand for spaces will at times exceed the amount provided and people will park on the street or in other carparks. This is exacerbated by the three hour carparking limit for the public carpark which may result in a slow turnover of spaces. While I accept that this is likely to be the case and that there will be times when the car park is full and when customers of Dan Murphy's will park elsewhere, the demand for parking is not dissimilar to that of the Approved Development and, of itself, would not be a reason to refuse the application. The proposed condition for signage to indicate the capacity of the carpark would address traffic trying to access the carpark when it is full but not the issues associated with cars circulating the streets looking for alternate parking. A condition restricting trolleys to within the development (although opposed by the applicant) would prevent them being left in surrounding streets.

Impacts of the proposal What is the impact on laneway system? 47The experts also held different opinions about the impacts of other aspects of the proposal on the laneway system, which include the use of 8.7m trucks, environmental capacity and pedestrian safety. Mr Coady acknowledged that individually these matters would not be a reason to refuse the application but in combination with the other matters the proposal was unacceptable. Servicing the proposal 48The proposal is to be serviced by a maximum of six truck deliveries per day (3 x up to 6.5m and 3x up to 8.7m). The truck deliveries would be limited to one per hour between 9 am to 3 pm Monday to Saturday. In addition, there would be a maximum of four delivery vans per day, which could park in the carpark before 9am and in the loading dock at other times. 49The route for the trucks to access the site is via Military Road, Mandalong Road, Clifford Street, Field Way and Horsnell Lane. The exit route is via Horsnell Lane, Field Way and Clifford Street and Spit Road. 50The experts agree that the 8.7m trucks can access the loading dock and can be unloaded with the loading dock door closed. Mr Coady is concerned that the access route for the trucks is through narrow lanes and that, although Horsnell Lane and Field Way are two way, they are not wide enough for vehicles to pass. In particular, while the 8.7m truck can turn into Field Way (north) it must cross to the other side of the lane. In his opinion, the parking on the west side of Field Way north of Horsnell Lane would need to be removed, which would impact on the already short supply of on street parking. Furthermore, the turning test for the 8.7m truck was done under controlled conditions and not with high traffic flow. Pedestrian conflict 51Based on the pedestrian counts that were undertaken in Field Way and Horsnell Lane, Mr Rogers and Mr Coady agreed that the level of pedestrian activity on that laneway system is relatively minor..... taken in isolation issues associated with pedestrian/vehicle conflict in the laneway system which provides local access to the Dan Murphy's proposal is not of sufficient significance to be fatal to the proposed development. However, Mr Coady considers that the pedestrian facilities in the laneway are substandard and that the increase in traffic would further discourage pedestrian use. Mr Coady also raised concerns about potential conflicts at the intersection of Military Road, Field Way and Mandalong Road which has a complicated arrangement and high pedestrian volumes. Environmental capacity of Horsnell Lane 52Mr Coady and Mr Rogers agree that the capacity of Horsnell Lane is related to its intended function and that it services uses in the business zone. However, Mr Coady considers that as Horsnell Lane is at an interface with a residential zone and has frontages to residential uses, it can be considered to be an "accessway" for the purpose of applying Table 4.6 of the RTA Guide to Traffic Generating Development (RTA Guide). He acknowledges that the maximum level of traffic activity should not be restricted to 100 vtph, but that this provides a guide as to an appropriate level of traffic activity for a laneway with residential frontages. In his opinion, the additional traffic generation of the proposal exceeds the environmental capacity of the lane and would impact on the amenity of the residential flat buildings at 11-17 Clifford Street and 1 Field Way. 53In Mr Rogers' opinion, the relevant provisions of the RTA Guide apply to residential streets in residential areas. He does not consider that Horsnell Lane is a residential lane or that environmental capacity is an appropriate criterion. In his opinion, the level of traffic generated by the proposal is acceptable as it is similar to that of the Cache development and the Approved Development and does not compromise pedestrian safety or amenity. Findings 54The traffic experts disagree on whether 'environmental capacity' is an appropriate criterion to apply to Horsnell Lane. Section 4.3.1 of the RTA Guide states: Environmental capacity considerations are relevant to streets in residential areas, neighbourhood shopping centres and educational precincts. 55The capacity of Horsnell Lane is related to its intended function to provide access to uses which front Military Road, including retail and residential uses. It also provides access to residential uses which front Clifford Street. Both sides of the lane front residential uses and the environmental capacity performance standard in Table 4.6 of the RTA Guide is a relevant consideration. 56Mr Coady acknowledges that the maximum level of traffic activity should not be restricted to the environmental performance standard of 100 vtph, but that this provides a guide as to an appropriate level of traffic activity for a laneway with residential frontages. Pedestrian safety is of 'primary concern' in limiting traffic on minor roads and the number of pedestrian using Horsnell Lane are low. However, s 4.3.1 of the DCP seeks to extend the network of laneways and rear streets to improve pedestrian accessibility, safety and amenity. It identifies Horsnell Lane and Field Way as part of this pedestrian network which would be impacted by the level of traffic likely to be generated by the proposal. As discussed above, the traffic would be a significant increase on that generated by the Cache development and the Approved Development. Retail uses which generate traffic generation levels similar to that anticipated in the Approved Development (120 vtph based on 1117sqm of retail) would be more consistent with the environmental capacity of the laneway and the function anticipated in the DCP to provide access for both vehicles and pedestrians. 57Hussey C in FKP also found that "the predicted traffic volume in the order of 230vph significantly exceeds the environmental capacity criterion, which is a further negative aspect of the proposal." 58It has been demonstrated that trucks can access the loading dock. Due to the constraints of the surrounding streets the designated route is through narrow laneways. Horsnell Lane is within the B2 Local Centre Zone and it can be argued that access for trucks to service uses along this lane is anticipated, however, not necessarily the number of trucks proposed with the resultant noise levels. Field Way is within the R3 Medium Density Residential Zone, it is narrow and if cars are parked does not provide sufficient width for two way traffic. The use of Field Way to provide access for a truck every hour for six hours a day is not consistent with this zoning, particularly as 1 Field Way and 3 Clifford Street front Field Way with minimal setbacks. The number of trucks and the resultant noise impacts are not 'reasonable impacts'. What are the noise impacts? 59The experts agree that the mechanical plant noise would comply with the noise criteria subject to the implementation of the noise mitigation measures recommended by Dr Tonin. They also agree that it had been demonstrated that the 8.7m trucks could be accommodated within the loading dock and that provided the door was closed the unloading and loading of trucks would be acceptable. Dr Tonin recommended that garbage trucks not be loaded from within the loading dock due to noise from reversing and manoeuvring. Mr Cooper maintained a residual concern that the noise from collection of trolleys and night fillers had not been assessed. 60The main disagreement between Mr Cooper and Dr Tonin was the impact on residential amenity resulting from the noise from traffic generated by the proposal, particularly from the 8.7m trucks. They agreed that the NSW Road Noise Policy (RNP) provides guidance on traffic noise impacts created by additional traffic on local roads related to land use development and that the noise assessment criterion for the proposal is 55 LAeq, (1 hour) measured at the façade of any residential property. The experts disagreed on aspects of the RNP, in particular, the interpretation of the "build option" and the "no build option" for the purposes of comparing the noise environment if the development proceeds and if it does not. 61Mr Cooper noted that the steps in s 3.4.1 of the RNP for applying the noise criterion are more related to road projects than to increased traffic from developments. He considered that the proposal should be compared to the existing noise situation ie the Approved Development with vacant retail space. Whereas, in Dr Tonin's opinion, the "no build option" is the previous Cache development. He compared the noise level calculated for the Application with the noise level calculated for the Cache for residences in Horsnell Lane and Field Way (Exhibit M). During the hearing, Dr Tonin also prepared a comparison of noise levels between the Application and a "no build option" being the Approved Development, based on different traffic generation rates (Exhibit P). Other than the "low range option" the Application does not increase the noise level by more than 2dB above that of the Approved Development. The "low range option" is based on Mr Coady's estimates of the traffic generation for the retail component of the Approved Development (63 vtph), which, for the reasons discussed above, Mr Rogers considered to be too low. In Dr Tonin's opinion, the Application therefore complies with the criterion in the RNP. 62Mr Cooper accepted that if the proposal were limited to the use of 6.5m trucks it would result in similar noise impacts to that of the Approved Development based on the traffic generation figures in Exhibit P. However, he maintained his concerns about the use of larger trucks and raised concerns about Dr Tonin's assumptions including that they relied on ambient noise levels measured by Koikas Acoustics in 2009. In Mr Cooper's opinion, these underestimate the existing situation. Furthermore, while he accepted the use of a logarithmic average from the measured noise levels of individual trucks, he questioned the inclusion of an older 6.4m truck (UQS794), which produced a greater noise level than the other trucks (below 6.5m), particularly the fleet truck (BD04YH). Findings 63Mr McEwen and Mr Staunton made competing submissions about the interpretation of the RNP, particularly the 'no build option' and the 'build option' as well as whether a 2dB exceedance of the noise criterion is acceptable. Section 3.4 of the RNP provides: Where existing traffic noise levels are above the noise assessment criteria, the primary objective is to reduce these through feasible and reasonable measures to meet the assessment criteria. The secondary objective is to protect against excessive decreases in amenity as a result of a project by applying the relative increase criteria. In assessing feasible and reasonable mitigation measures, an increase of up to 2 dB represents a minor impact that is considered barely perceptible to the average person. 64Section 3.4.1 outlines the process for applying the assessment and relative increase criteria. Step 1 requires identification of the study area for assessment. Step 2 requires the identification of where 'for existing residences ... affected by additional traffic on existing roads generated by land use developments, the total traffic noise level from existing roads and the traffic generating development exceed the 'traffic generating development' criterion for residences in table 3....' 65Step 3 requires that 'where exceedences are identified in Step 2, identify feasible and reasonable mitigation measures...' such as road design and traffic management. 66Step 4 states: For existing residences and other sensitive land uses affected by additional traffic on existing roads generated by land use developments, any increase in the total traffic noise level should be limited to 2 dB above that of the corresponding 'no build option'. 67The 'no build option' is not defined other than in s 2.5.3 which deals with the assessment criteria time frame for new road projects and road redevelopment projects. It specifies that for each time frame a comparison should be made between: + The road traffic noise levels if the project proceeds (termed the 'build option'), and + The corresponding road traffic noise levels, due to general traffic growth, that would have occurred if the project had not proceeded (termed the 'no build option'). 68In applying this to Step 4 the increase in total traffic noise levels of the 'project' should be compared to what would have occurred if the project had not proceeded, ie the exiting development. 69Mr Staunton and Mr McEwen agree that the 'no build option' must be either the Cache or the Approved Development but Mr Staunton submits that this will depend on what constitutes the 'project'. If the 'project' is Dan Murphy's then the Approved Development is the 'no build option'. If 'the project' is the Approved Development then the 'no build option' is the Cache. They also disagree on whether the +2dB applies and held different interpretations of cl 3.5 which deals with cumulative impacts from traffic generating developments and seeks to limit multiple increases in the overall level of traffic noise. Mr McEwen submits that 2dB may be added if the 'no build option' is 53dB or above. Whereas, Mr Staunton submits that if this is correct there would be no limit in multiple increases in the overall level of traffic and the noise criterion would be 57 rather than 55. 70A comparison between the Cache development and the Approved Development under the RNP would not have been required as part of its assessment as the traffic report indicated that there would be a reduction in peak generation for the retail/commercial use in Cache (189 vtph) and the residential/retail use in the Approved Development (85 vtph based on 750sqm of retail). Although, an underestimate of the retail component, there would have been a significant reduction in traffic noise. 71In practical terms the 'project' is Dan Murphy's and the 'no build option' is the Approved Development as this is what currently exists on the site and is what will remain if Dan Murphy's does not proceed. Consequently, any increase in the total traffic noise level should be limited to 2 dB above that of the Approved Development. However, I do not accept that this increase can occur if the 'no build option' is 53dB or above. The intent of s 3.4 and the steps in s 3.4.1 is to not exceed the noise assessment criterion and, where it is exceeded, to employ feasible and reasonable measures to meet the criteria. An increase of 2db above the 'no build option' is acceptable where the criterion is not exceeded. However, where it is exceeded, mitigation measures should be examined (Step 3) and justification provided that all feasible and reasonable mitigation measures have been applied. (Step 4). 72Dr Tonin considered that mitigation measures cannot be applied in this case. However, this is based on physical measures such as road design and noise barriers. A limitation on truck size and frequency as well as traffic numbers are presumably traffic management mitigation measures, some of which have already been applied to the development. However, in all the different options (Exhibit P) the proposal would exceed the noise criterion of 55LAeq and further traffic management measures could be employed to better achieve compliance. 73Even if the increase of 2dB above the traffic noise level of the Approved Development which results in an exceedance of the noise assessment criterion is the correct approach, I am not satisfied that the assumptions on which the options in Exhibit P are based demonstrate the likely increase in traffic noise between the 'build option' and the 'no build option'. The Approved Development is residential with ground floor retail over a basement carpark, which includes public carparking. The building, other than the retail, is now occupied and measurements to determine the existing traffic noise levels could have been undertaken with assumptions then made for the contribution of traffic for the approved retail. However, this was not done and rather the existing noise levels are based on measurements taken in 2009 with assumptions then made about traffic noise from the different options. Mr Cooper undertook two sample measurements which indicated higher noise levels that may result in the Approved Development being close to or above the RNP criterion and mean that further exceedance is to be avoided. 74The inclusion of the 'noisy' truck (UQS794) to calculate the logarithmic average for the trucks below 6.5m gives a higher noise level. While trucks such as this may visit the site, it is likely to be on an occasional basis and is not within the range upon which the noise levels should be based. Similarly, the noise levels for the trucks below 6.5m should not be based solely on the quieter fleet truck (BD04YH). 75The noise of trucks contributes significantly to the traffic noise levels and there is a marked difference between the noise from a small truck and a large truck. Mr Cooper noted that the total existing noise contribution including a 6.5m fleet truck (passby) is 43.6 LAeq(1hr) compared to the contribution including a 8.7m fleet truck (passby) of 51.8 LAeq(1hr). Whereas, the different traffic number between Option 1 (219 vtph Fri PM, 159 vtph Sat) and Coady's sensitivity analysis (Option 2) (263 vtph Fri PM, 216 vtph Sat) result in a noise increase of 0.4 LAeq(1hr) for 0900-1500 and 0.6 LAeq(1hr) for 1700-1800. 76Although not its primary position, Mr McEwen stated that the applicant would accept a condition that restricts deliveries to a maximum of 6.5 m trucks which would require a total of eight such vehicles, together with four smaller delivery trucks so as to maintain the necessary delivery capacity. Truck delivery hours would therefore need to be expanded to 9 am to 5 pm to ensure no more than one arrival per hour of a 6.5 m truck. Mr Staunton submits that this would conflict with peak hour traffic and periods of increased pedestrian activity. 77I note that Mr Cooper has accepted that based on the figures in Exhibit P, if the proposal is limited to 6.5m trucks, it would have a similar noise impact to the Approved Development. However, the calculations in Exhibit P assumed a contribution of 1 truck per hour for each option. While this reflects what is proposed for Dan Murphy's it is not likely to be the situation for the Approved Development. It is unlikely that the Approved Development would need to be serviced by 6.5m trucks as regularly as 1 per hour between 9-5. The Approved Development includes a condition that restricts trucks to a maximum of 6.5m and while it does not limit the number of trucks, it requires a further development application for the use of the retail units and truck numbers could thereby be conditioned. This would be harder to coordinate than for a single large shop but I accept that the number of trucks per day for the approved development is likely to be significantly less than what is required for Dan Murphy's. The calculations in Exhibit P for the Approved Development include one truck per hour, which may represent the worst noise scenario but does not represent the scenario which is likely to most often occur, where only smaller trucks and vans service the retail component. 78For the above reasons, I am not satisfied that the proposal when compared to the Approved Development would satisfy the criterion in the RNP.

Are the impacts reasonable? 79Mr McEwen submits: The 'fundamental and critical question to be answered for the purpose of the resolution of this appeal is whether the proposed use of an existing retail space for a Dan Murphy's store (948 m2) and a small retail tenancy (65 m2) is acceptable on amenity grounds. It is important to recognise that the relevant question is not whether a retail use (or multiple uses) could be established on the subject site with a lower traffic generation rate. It is not to the point that the use of the retail space as retail premises will result in a substantial change to the existing environment which is focused on the use of the laneway which separates the commercial land from residential land. There will inevitably be an increased level of road traffic and road traffic noise. The surrounding residents cannot reasonably expect the current level of relative inactivity to remain constant. The answer to the fundamental question is informed by consideration of a more direct question: What should be the reasonable expectation of occupiers in residential properties which adjoin a commercial centre and who are separated from that centre by a service laneway system which is required by the applicable planning controls to be used for access to retail premises for its parking and servicing requirements in conjunction with public parking and residential access? 80To determine the reasonable expectations, Mr McEwen submits that there are a number of factors which need to be taken into account, in particular, the zoning of the site and the intended function of the lane way. Mr McEwen also recognises that the 'zone interface planning principle' outlined in Seaside Property Developments Pty Limited v Wyong Shire Council [2004] NSWLEC117at [25] is relevant to determining 'reasonable expectations'. 81Mr McEwen submits that when compared to other zones in LEP 2012, the most appropriate location for the proposed Dan Murphy's development is in the B2 Local Centre zone under LEP 2012. The objectives for the B1 Neighbourhood Centre zone encourage 'small scale retail.... that serve the needs of people who live or work in the surrounding neighbourhood' and seeks to 'minimise the effect of business uses on the amenity of adjacent residential areas having regard to building design, operation and activities, traffic generation and the carparking capacity of local roads'. 82Whereas, the objectives of the B2 zone do not require retail uses to be 'small scale' and they are to also serve the needs of people who 'visit the local area'. A further objective seeks to 'enhance the viability, vitality and amenity of the local centres'. 83Both zones seek to 'encourage residential development as part of the mixed use of sites' but, Mr McEwen submits, the objectives indicate a priority for retail use in the B2 zone. 84Furthermore, Mr McEwen submits that the provisions of the DCP 'confirm the intended function of the site within the Spit Junction business centre and the function of the rear laneway system'. In particular, he noted that the Spit Junction business centre is the primary business and retail centre in Mosman and that vehicular access to properties on Military Road is to be avoided and to be provided from secondary roads and rear lanes. 85In Mr McEwen's submission, 'the LEP and DCP controls clearly encourage the location of a liquor store of the type proposed in the B2 zone and it is submitted that there are no unanticipated consequences of that use which would act to disqualify the subject site for the proposal'. 86Mr Staunton submits that the permissibility of retail uses within the B2 Zone does not mean that any retail use of any size can occur. A merit assessment must be carried out that has regard to the suitability of any site within the zone for the proposed development. He notes that the B2 zone would be the most appropriate zone in Mosman to place a 2,000 sqm full line supermarket. However, in FKP the Court rejected such a proposal on the site because of its context and constraints that made it an unsuitable site for such a use. He submits that the constraints have not changed nor have the planning controls changed in substance. 87Mr Staunton acknowledges that the DCP requires access from rear lanes for sites which front Military Road but that does not mean that narrow streets with limited environmental capacity are appropriate for a high traffic generating use. Furthermore, the DCP seeks to extend the network of laneways and rear streets to improve pedestrian accessibility, safety and amenity. 88Mr Staunton submits that the Spit Junction B2 zone is to be a mixed use area with both retail and commercial as well as residential. However, there is nothing in the LEP or DCP that gives preference to retail or commercial uses over residential. Mr Staunton also referred to the principle in Seaside Properties and that the location of the site on a boundary with residential zone needs to be recognised in the assessment of the application. 89The submissions reflected the evidence of Mr Nash and Mr Harrison.

Findings 90The retail nature of Dan Murphy's means that it is largely car dependent and consequently results in high traffic generation and demand for parking, albeit for a short period, and regular servicing by trucks up to 8.7m long. The key issue is whether this will result in adverse impacts on residential amenity, particularly from increased traffic and noise, and whether these impacts are reasonable in the context of the planning controls. In particular, whether the zoning of the land and the surrounding area and the DCP controls anticipate a development, which would result in this level of traffic generation and consequent impacts. 91Retail uses are permissible in the B2 Local Centre Zone and, within the Mosman local government area, it is the most appropriate zone for a retail use such as that proposed. However, the suitability of the site for the particular development and the likely impacts must also be assessed. 92The site is located on Military Road near its intersection with Spit Road, which is already subject to traffic congestion. Consequently, the planning controls for Spit Junction Business Centre in s 4.3.1 of the DCP seek to avoid vehicular access to properties from Military Road which is to be provided off secondary roads and rear lanes. 93The controls in s 4.3.1 also seek to improve pedestrian accessibility, safety and amenity in the three lanes which service the site: Civic Lane, Horsnell Lane and Field Way. These are narrow with predominantly residential uses. Due to the constraints of the laneways, servicing by trucks is restricted to a designated route which results in trucks using Horsnell Lane as well as Field Way. Field Way is within the R3 Medium Density Residential Zone and its use to provide access for a truck every hour for six hours a day is not consistent with this zoning, particularly as the residential flat buildings at 1 Field Way and 3 Clifford Street front Field Way with minimal setbacks. 94Horsnell Lane also has residential flat buildings with apartments that are orientated towards the lane. Consequently, although it is zoned B2 Local Centre, it is at a zone interface and the principles in Seaside Properties are relevant. Bly C states at [25]: As a matter of principle, at a zone interface as exists here, any development proposal in one zone needs to recognise and take into account the form of existing development and/or development likely to occur in an adjoining different zone. In this case residents living in the 2(b) zone must accept that a higher density and larger scale residential development can happen in the adjoining 2(c) or 2(d) zones and whilst impacts must be within reason they can nevertheless occur. Such impacts may well be greater than might be the case if adjacent development were in and complied with the requirements of the same zone. Conversely any development of this site must take into account its relationship to the 2(b) zoned lands to the east, south-east, south and south-west and the likely future character of those lands must be taken into account. Also in considering the likely future character of development on the other side of the interface it may be that the development of sites such as this may not be able to achieve the full potential otherwise indicated by applicable development standards and the like. 95The residents in Horsnell Lane cannot expect to maintain the level of amenity that they would enjoy if they did not border a B2 Local Centre Zone. However, there will be a significant increase in traffic generation in Horsnell Lane which I have found does not meet the environmental capacity criteria in the RTA Guide. I am also not satisfied that the traffic noise, particularly the added truck noise, meets the criterion in the RNP. For these reasons, the impacts on amenity are beyond the reasonable expectations established by the planning controls and therefore the application must fail.

Orders The orders of the Court are: (1)Appeal is dismissed. (2)The development application for the reconfiguration of the ground level from the approved three retail tenancies into two retail tenancies and the fit out and use of one tenancy for retail liquor premises (Dan Murphy's) and associated signage at 710 Military Road, Mosman, is refused. (3)The exhibits, except Exhibits 1, A and B, may be returned. Annelise Tuor Commissioner of the Court

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: 16 July 2014

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