Jam Ventures Australia Pty Ltd v Inner West Council

The site and the locality

1. The site is known as 465-467 Parramatta Road, Leichhardt and is located on the northern side of Parramatta Road. It comprises three allotments, legally described as Lot B DP 302029, Lot 1 DP 983848 and Lot 4 Section 3 DP 612. The combined site has an area of approximately 442.4 m² and has a frontage of 10.9m to Parramatta Road.
2. The site forms part of Leichhardt's commercial strip along Parramatta Road, and is located within the Parramatta Road Conservation Area and the Excelsior Estate Distinctive Neighbourhood - Parramatta Road / Jarrett Street Sub Area.
3. The property backs onto properties fronting Jarrett Street, which contain a mix of commercial buildings and residential dwellings, and is adjacent to the building on the corner of Rofe Street and Parramatta Road, which is known as 463 Parramatta Road and owned by Anglicare Retirement Villages.
4. An aerial photograph of the site is shown at Figure 1. The two sites identified as downstream properties through which stormwater could drain are 463 Parramatta Road, which would involve draining water to Rofe Street, and 62 Jarrett Street.
5. Stormwater currently drains from the site towards Jarrett Street, with the runoff conveyed along the driveway of 62 Jarrett Street, without the benefit of an easement for drainage.

The Planning Framework

1. In considering the appeal, the Court exercises the functions of the consent authority, the Council, in determining the modification application pursuant to s 4.56 of the EPA Act (see s 39 of the LEC Act). Sub-section (1) provides as follows: (1) A consent authority may, on application being made by the applicant or any other person entitled to act on a consent granted by the Court and subject to and in accordance with the regulations, modify the development consent if: (a) it is satisfied that the development to which the consent as modified relates is substantially the same development as the development for which the consent was originally granted and before that consent as originally granted was modified (if at all), and (b) it has notified the application in accordance with: (i) the regulations, if the regulations so require, and (ii) a development control plan, if the consent authority is a council that has made a development control plan that requires the notification or advertising of applications for modification of a development consent, and (c) it has notified, or made reasonable attempts to notify, each person who made a submission in respect of the relevant development application of the proposed modification by sending written notice to the last address known to the consent authority of the objector or other person, and (d) it has considered any submissions made concerning the proposed modification within any period prescribed by the regulations or provided by the development control plan, as the case may be.
2. Section 4.56(1)(a) requires the Court, in exercising the functions of the consent authority, to be first satisfied that "the development to which the consent as modified relates is substantially the same development as the development for which the consent was originally granted". I am satisfied that the proposed modified development is substantially the same as that for which consent is granted.
3. Section 4.56(1)(d) requires that the Court consider any submissions made concerning the proposed modification. Two submissions were received. The first is not relevant to the modifications the subject of the present application, and the second, written by the owners of 60 and 62 Jarrett Street, expresses a preference for stormwater to be drained to the Parramatta Road frontage. This is the subject of my consideration below.
4. Subsection (1A) of s 4.56 then provides that: In determining an application for modification of a consent under this section, the consent authority must take into consideration such of the matters referred to in section 4.15 (1) as are of relevance to the development the subject of the application. The consent authority must also take into consideration the reasons given by the consent authority for the grant of the consent that is sought to be modified.
5. Section 4.15(1)(a) of the EPA Act requires that the Court consider the provisions of any applicable environmental planning instrument, development control plan, planning agreement, certain draft instruments and regulations. Amongst other things, s 4.15(1) also requires consideration of the likely impacts of the development, the suitability of the site for development, any submissions made, and the public interest.
6. The Leichhardt Local Environmental Plan 2013 ("LLEP 2013") applies to the site. Clause 6.4 concerns stormwater management, and provides: 6.4 Stormwater management (1) The objective of this clause is to minimise the impacts of urban stormwater on land to which this clause applies and on adjoining properties, native bushland and receiving waters. (2) This clause applies to all land in residential, business and industrial zones. (3) Development consent must not be granted to development on land to which this clause applies unless the consent authority is satisfied that the development: (a) is designed to maximise the use of water permeable surfaces on the land having regard to the soil characteristics affecting on-site infiltration of water, and (b) includes, if practicable, on-site stormwater retention for use as an alternative supply to mains water, groundwater or river water, and (c) avoids any significant adverse impacts of stormwater runoff on adjoining properties, native bushland and receiving waters, or if that impact cannot be reasonably avoided, minimises and mitigates the impact.
7. The LDCP 2013 also applies, and at Part E1.2 concerns water management. The specific provisions are considered further below.

The expert evidence

1. Mr Joe Bertacco, an engineer employed by the Council, and Mr Pavel Kozarovski, an engineer engaged by Jam Ventures, gave evidence in a joint expert report and orally concerning the stormwater drainage plan. Their evidence is considered further below.
2. Mr Glen Hugo, a town planner employed by the Council, and Mr Tim Cooper, a town planner engaged by Jam Ventures, prepared a joint report that was tendered at the hearing. They agree that all of the requirements of condition 3 of the development consent are met through the amendments to the plans, and that the proposed modifications present no change to the approved building height or density. Further, they agree that if the stormwater design requires the awning to extend over the planter box and precludes a 6m tree from being located within the planter box, the proposed Frangipane Shrub is an acceptable species to be located within the courtyard space. As a result of their evidence, none of the town planning contentions remains in issue.

The issue in dispute

1. As a result of the evidence of the planners and of the engineers, the only issue that remains in dispute is whether the deferred commencement condition ought to be deleted in favour of the stormwater drainage plan that drains stormwater directly to Parramatta Road.

The attempts to secure an easement

1. Jam Ventures has made a number of offers to obtain an easement to drain across the adjoining downstream property at 463 Parramatta Road, to Rofe Street. The first offer of $40,000 was supported by a valuation that valued the easement as $5400. It was refused on 22 April 2016 by a representative of Anglicare Retirement Villages, who made a counter offer of $148,575 based on the sale price value (full property value) of the whole of the land the subject of the proposed easement, and was not supported by a valuation report. A further offer of $38,880 was made by Jam Ventures on 19 August 2019, supported by a valuation of $36,000. Based on the terms of the letter, a response to the letter was required within 14 days. As at 5 September 2019, no response had been received.
2. Jam Ventures has also made an offer to the owners of 62 Jarrett Street, Leichhardt, to obtain an easement over their property. The offer of $49,680 was made on 19 August 2019 and was supported by a valuation of $46,000. Based on the terms of the letter, a response to the letter was required within 14 days. As at 5 September 2019, no response had been received.

The stormwater drainage design

1. In lieu of drainage through a downstream property as anticipated by the deferred commencement conditions, the proposed alternative stormwater drainage design for which approval is sought incorporates the following:

• A system of box gutters, downpipes, pits, floor wastes and pipes that captures the runoff from the roof and awnings and directs it by gravity to the rainwater tank.
• A 5000L rainwater tank which captures the roof runoff, and recycles the collected water for toilet flushing and irrigation.
• A 3.6 cubic metre OSD tank, combined with a 7m2 raingarden, which collects the overflow from the rainwater tank and filters the water. This area is used to store the excess volume of stormwater and dispose of it to a discharge control pit.
• A discharge control pit to capture water from the OSD tank before disposal by gravity to Parramatta Road, with an orifice plate to control the amount of discharge.
• An overflow pit that captures water from the discharge control pit, and has an oversized grate to intercept and convey site runoff in an 80% blockage scenario.
• Two pipes, 150mm in diameter, to convey water from the overflow pit to Parramatta Road by gravity.
• An undercroft evaporation area to capture stormwater from the rear courtyard planter bed area that is not roofed (around 8m2). The capacity of the undercroft area is 70 cubic metres of stormwater each year, which is at least 10 times the estimated 5 cubic metres each year captured from wind-driven rain on the 8m2 area.

1. The box gutters are sized in accordance with the Australian Standard for the 1 in 100 year storm event, and are designed to capture wind effects on rain.
2. The design of the OSD tank, raingarden, and discharge control pit, results in a reduction in the site runoff so that it is equal or less than the runoff during the 1 in 2 year storm for all storm events up to and including the 1 in 100 year storm.
3. The uncontested evidence of Mr Kozarovski is that the capacity of the system is sufficient to capture and convey the 1 in 100 year storm event flow from the contributing catchment even in the event of 80% blockage of the inlet and 50% blockage of the pipe, and that the volume of runoff from the site would be less than the current run off under existing conditions, which will improve the performance of the existing drainage system in the street.
4. Mr Kozarovski's evidence is also that the operation potential of the undercroft evaporation area is about ten times larger than what can enter, so there can be certainty that there will be no seepage, or any discharge of water to adjoining properties. There was no evidence to the contrary from Mr Bertacco.
5. Mr Kozarovski considers that the drainage design satisfies the requirements of the BCA and the relevant Australian Standards. This was not disputed by Mr Bertacco.

The Council's opposition to the stormwater drainage plan

1. The Council's position is that drainage over downstream adjoining properties through a stormwater easement is mandated by the LDCP 2013, and that it is not appropriate to allow a departure from the provisions of the LDCP 2013 in circumstances where the proposed stormwater design requires ongoing maintenance for it to remain effective over time without causing a nuisance.
2. The Council submits that cl 6.4(3)(c) of the LLEP 2013 is particularly relevant, and that the LDCP 2013 provides the guidance as to how cl 6.4(3)(c) is achieved. Specifically, the Council relies on E1.2.5, which sets out in the following in the introduction to the controls on Water Disposal: "The discharge should always be in the same direction and within the same catchment as the site naturally drains. The discharge of subsurface waters from basement structures to the public drainage system should be avoided as it can cause nuisance or public health risks. Where possible subsurface water should be retained on site or otherwise be connected to the piped trunk drainage system."
3. The objective of E1.2.5 is to "maintain existing natural drainage patterns and avoid nuisance and flooding to the drainage system and downstream properties". The Council says that for this objective to be met, an easement is required over a downstream property in compliance with control C2, which provides (emphasis added): "Where the site naturally drains away from all street frontages and cannot discharge stormwater directly to Parramatta River or Sydney Harbour, stormwater runoff should be drained to a piped trunk drainage system, if it passes through the site, or an existing registered drainage easement benefiting the site. Where neither of these options is available but the roof areas of the development may be drained to the street: a. for minor developments that result in additional roof area of less than 20sqm of roof area (including a garage or carport), the existing site drainage system may be utilised; b. for minor developments that result in the addition or alteration of more than 20sqm but less than 40sqm of roof area, as much roof and surface areas as practicable should be drained by gravity to the street frontage above; c. for development to a single dwelling that results in the addition or alteration of more than 40sqm of roof areas, the entire roof areas of the existing dwelling should be drained by gravity to the street frontage above; and d. for new single dwellings, at least 80% of all paved/impermeable surfaces should be drained by gravity to the street frontage above. The drainage of any roof and surface areas that cannot drain to the street must be designed to cause no concentration of flows or nuisance to downstream properties."
4. The Council points out that the concession afforded in (a) to (d) of C2 is not available to the demolition and rebuild development the subject of the consent, but is constrained to apply only to single dwellings and minor works to a residential, commercial or industrial building.
5. Similarly, the Council points out that the exception allowed for in C3 is not available in the present proceedings. C3 provides: "Where the controls in E1.2.5 C2 cannot be met, a drainage easement over a downstream property to the street below should be sought. Council will not consider alternative solutions unless detailed evidence of the efforts to obtain an easement is provided and the development is for a single dwelling or minor works to a residential, commercial or industrial building."
6. The stormwater drainage design is also set out in E1.2.2, which provides at C4: "C4 The site drainage system must be designed to collect and convey flows by gravity and include a pipe system for frequent rainfall events combined with an overland flow path to convey larger flows that are generated during storms."
7. Accordingly, the Council submits that the stormwater flows should be collected by gravity and a drainage easement should be obtained over the downstream properties.
8. The Council therefore submits that Jam Ventures should instead pursue an application for an easement pursuant to s 40 of the LEC Act, which gives the Court the power to exercise the jurisdiction of the Supreme Court under s 88K of the Conveyancing Act 1919 in certain circumstances. Section 88K then allows the relevant court to make an order "imposing an easement over land if the easement is reasonably necessary for the effective use or development of other land that will have the benefit of the easement." The Council submits that a s40 application would allow the Court to learn that the easement is necessary for the development of the land, and proceed to the question of valuation. In support of this submission, the Council relies on the decision of the Court in Castagnet Investments Pty Ltd v Woollahra Municipal Council [2006] NSWLEC 171.
9. The Council also relies on the evidence of Mr Bertacco, who opines that the proposed stormwater drainage plan is not acceptable as it does not adequately deal with the possibility of blockages and the resulting overland flow and requires ongoing maintenance to ensure that no blockages occur. Mr Bertacco opines that an overland flow path should be provided from the terraces below street level, and a drainage easement should be obtained for those flows in accordance with C4 of E1.2.2.
10. Mr Bonanno also made a submission on behalf of the Council that Jam Ventures was seeking to avoid the cost of what the Council considers to be a "normal cost" associated with development, and that the expense associated with obtaining an easement should not be a reason for allowing a departure from the provisions of the LDCP 2013.
11. In support of its position, the Council relies on the decision of the Court in Mauro Poletti v Inner West Council [2017] NSWLEC 1325, in which the Commissioner determined to retain a deferred commencement condition requiring the registration of an easement. It also relies on the decision in Wren Investments Pty Ltd v Willoughby City Council [2011] NSWLEC 1167, in which the Court refused a modification application for an alternative drainage design without the need for an easement.
12. Finally, the Council submits that it is a matter of public interest that the LDCP 2013 is applied to regulate stormwater in a consistent manner. The Council submits that if individual proponents can evade the LDCP 2013 then this consistent regime will be compromised.

Jam Ventures' submissions on the stormwater drainage plan

1. In support of the proposed stormwater drainage plan, Jam Ventures points out that the system relies on gravity, does not rely on a pump out system, discharges the water to the same catchment, and is designed in accordance with the LDCP 2013 to capture and convey the 100 year average recurrence interval storm event flow from the contributing catchment in the event of a 80% blockage of the inlet and 50% blockage of the pipe. Jam Ventures relies on the evidence of Mr Kozarovski that this design complies with the relevant Australian Standards, collects all the stormwater from the site and will not result in any stormwater discharge to adjoining properties.
2. Jam Ventures submits that there is no evidence from the Council that leads to the conclusion that cl 6.4(3)(c) is offended by the stormwater drainage design. Instead, it submits that the proposal provides for better drainage than the existing situation, and reduces the flow of stormwater as compared to the existing situation. As such, Jam Ventures submits that cl 6.4(3)(c) is satisfied as the proposed design avoids any adverse impacts of stormwater runoff on adjoining properties, native bushland and receiving waters.
3. Further, Jam Ventures points out that the evidence is that the proposed design meets the design criteria set by the Council in C5 of E1.2.2 of the LDCP 2013, which provides as follows: "C5 Where an overland flow path cannot be provided due to the position of existing buildings and structures that are to be retained, the capacity of the pipe system must be designed to capture and convey the 100 year Average Recurrence Interval storm event flow from the contributing catchment assuming 80% blockage of the inlet and 50% blockage of the pipe."
4. Jam Ventures submits that the Council could not succeed in an argument that cl 6.4(3) of the LLEP 2013 has been offended in circumstances where the stormwater drainage plan meets the design criteria that is specified in C5 and applies in circumstances where there is no overland flow path.
5. Jam Ventures also submits that the approach to be taken to the provisions of the LDCP 2013 should reflect s 4.15(3A) of the EPA Act, such that the provisions of the LDCP 2013 should be applied flexibly to allow for reasonable alternative solutions that achieve the objectives of those standards for dealing with that aspect of the development. Jam Ventures submits that this is precisely what is occurring here, where it is proposing an alternative solution that is as good as the drainage easement, in circumstances where it could not secure a drainage easement. As such, Jam Ventures submits that, to the extent that any provision of the LDCP 2013 is not complied with, flexibility should be applied because the design nevertheless meets the objective for the drainage of stormwater without causing a nuisance, and does so in accordance with the design criteria in the LDCP 2013 that applies where no overland flow is available.

The stormwater drainage plan is acceptable

1. In my view, the question before me concerns the adequacy of the proposed stormwater drainage plan, including whether cl 6.4 of the LLEP 2013 is met and whether the plan achieves the relevant objectives of the LDCP 2013. In doing so, I am also required to consider whether it is appropriate, in the circumstances, to allow the stormwater drainage plan where do so requires a departure from the controls in the LDCP 2013.
2. I accept, based on the evidence, that the stormwater drainage plan is adequate to capture, retain and dispose of stormwater so that there is no runoff or nuisance to adjoining properties. I consider that the system has been designed with adequate safeguards to ensure that its capacity is far greater than the 1 in 100 year storm event, and, with respect to the undercroft evaporation area, greater than the annual rainfall expected to be captured. For the disposal of stormwater from the roof areas, this is achieved by meeting the design criteria for there to be capacity to capture and convey the 100 year average recurrence interval storm event flow in the event of a 80% blockage of the inlet and 50% blockage of the pipe, which incorporates the inclusion of two discharge pipes and the overflow pit. For the capture of rainwater in the undercroft area, this is by designing an area that is at least 10 times what the anticipated capacity of captured stormwater will be.
3. The only potential for overland flow arises from blockage, and that blockage must be at greater than 80% during a significant rainfall event for there to be an overflow of the system. In my view, the conditions of consent that require ongoing maintenance will ensure that blockage, about which the Council is concerned, is prevented.
4. As a result, I am satisfied that each of the elements of cl 6.4(3) of the LLEP 2013 are met by the proposed stormwater drainage plan, including (c), that the design avoids any significant adverse impacts of stormwater runoff on adjoining properties, native bushland and receiving waters.
5. Further, the stormwater design achieves the objectives of the LDCP 2013 concerning water management. This includes:

• The on-site conservation of water in the rainwater tank and in the evaporation pit meets objective O1 in E1.2.1: "O1 To design development to improve water conservation and increase on-site storage of rainwater for reuse"
• The proposed design captures all of the stormwater with additional capacity to prevent flooding and avoid run-off altogether, in satisfaction of objective O1 in E1.2.2: "O1 To integrate site layout and the drainage system to avoid nuisance flows and flooding within the development and onto neighbouring properties."
• The proposed design reduces the total stormwater discharge to the street as compared to the current situation, and also reduces the flow to a maximum of 11L/s (the equivalent of a 1 in 2 year storm event flow) during a 1 in 100 year storm event, and therefore satisfies the objective O1 in E 1.2.3: "O1 To reduce the peak stormwater flows into the public drainage system and reduce the probability of downstream flooding."
• The proposed design uses gravity to discharge water to the Parramatta Street frontage in the same catchment as if it was draining through downstream properties, it reduces and controls that discharge, and has the capacity to collect and discharge all of the stormwater that falls on the site (with additional safeguards in place for additional capacity and blockage). It therefore meets objective O1 in E1.2.5: "O1 To maintain existing natural drainage patterns and avoid nuisance and flooding to the drainage system and downstream properties."

1. As such, whilst the proposed drainage system is contrary to a number of the specific LDCP 2013 controls identified by the Council, it achieves the objectives of those particular controls. This is a sufficient basis on which to exercise flexibility to allow the stormwater drainage design as proposed, and to remove the deferred commencement condition requiring the creation of the easement for drainage. This is consistent with flexibility mandated by s 4.15(3A) for a development application, although s 4.15(3A) does not strictly apply to the present modification application. It is also consistent with the principles in Zhang v Canterbury City Council (2001) 115 LGERA 373, which makes it clear that a relevant provision in a development control plan is entitled to significant weight but is not determinative.
2. An additional reason that flexibility ought to be afforded is that Jam Ventures has sought to pursue the creation of an easement, but the offers made for the purchase of an easement, which have been based on valuations, have not been accepted.
3. Each of the cases referred to by the Council are readily distinguishable from the present circumstances. In both Castagnet Investments Pty Ltd v Woollahra Municipal Council and Mauro Poletti v Inner West Council there was no dispute that an easement was required for stormwater drainage over adjacent properties. In Wren Investments Pty Ltd v Willoughby City Council, the alternative design relied on a pump out system, which is not what is proposed in the present application.
4. Further, the submission by Mr Bonanno that Jam Ventures is utilising an alternative scheme to avoid costs is not relevant, is not supported by the evidence, and does not lead to any unreasonableness in proposing the alternative scheme. Firstly, the Council has not furnished any evidence that Jam Ventures was unreasonable in refusing the counter offer. Indeed, the counter offer was not supported by valuations for compensation for an easement, and was instead calculated by the sale value of the land the subject of the proposed easement. Secondly, the evidence establishes that the alternative scheme is an effective way of draining stormwater by gravity and it has the advantage of not affecting third party property rights. As such, there is no unreasonableness about the alleged avoidance of costs of obtaining an easement.
5. Further, and as a result of the evidence in the proceedings, there is no evidence to support the Council's position that an easement over the downstream properties is required, and should be obtained by s 40 of the LEC Act. Even if the question of satisfaction of s 40 of the LEC Act and s 88K of the Conveyancing Act was relevant in the present appeal, which I consider it not to be, the evidence is that the proposed alternative system is adequate. It is therefore questionable whether the pre-condition for the grant of an easement under s 88K, that the easement is "reasonably necessary", is met.
6. Finally, I do not accept the Council's submission that allowing a variation to the LDCP 2013 through the alternative design will create an undesirable precedent. Each application for a stormwater drainage plan that forms part of a development proposal must be considered on its merits, and there is no evidence that there will be a cumulative impact caused by multiple properties using stormwater design proposals that discharge to their frontage by gravity in lieu of draining through downstream properties. Indeed, in the context of a development application, the consideration of alternative designs that achieve the objectives of the LDCP 2013 is mandated by s 4.15(3A) of the EPA Act.

Outcome of the appeal

1. In circumstances where I consider that the proposed stormwater drainage design is acceptable, it is appropriate for the modification application to be granted and the deferred commencement conditions to be deleted.
2. The Court orders that: 1. The appeal is upheld. 2. The application to modify development consent D/2015/680 for the mixed use development at 465 and 467 Parramatta Road, Leichhardt (granted by the Land and Environment Court on 6 May 2016 in proceedings 10011 of 2016), by amending condition 1 of Part B, deleting the deferred commencement conditions, and deleting conditions 3, 22 and 40(d) of Part B, is granted. 3. The development consent referred to in order (2), for the demolition of the existing structures with retention and refurbishment of the façade at 465 Parramatta Road, Leichhardt, and construction of a 5 storey mixed use building comprising commercial premises and a boarding house of 22 rooms and a manager's residence at 465 and 467 Parramatta Road, Leichhardt, is now subject to the modified conditions of consent contained in Annexure A. 4. The exhibits are returned, except for Exhibits A, C and E.

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: 26 September 2019