Karavellas v Sutherland Shire Council

Land and Environment Court (NSW)|2004-05-17|Before: Mrs J, Mr P

Introduction 1 This an appeal against the refusal by Sutherland Shire Council (the council) of a development application for the demolition of existing buildings and construction of two residential flat buildings with basement car parking at 498-502 President Avenue and 139 Acacia Road, Sutherland.

The site and it context 2 The site is at the south western corner of President Avenue and Acacia Road and is an amalgamation of four allotments being: lot 9 DP 663145, lots B, C and D DP354504. It has a site area of approximately 3271.8m2, with a frontage of about 50 metres to President Avenue and about 54 metres to Acacia Road. Its southern boundary adjoins the railway easement. The land slopes about three metres from north to south. 3 Existing development on the site is four houses with associated structures. The site has some vegetation, especially in the south western corner. 4 Adjoining the site to the west is a single storey house (504 President Avenue). Further to the west and across both President Avenue and Acacia Road are three storey residential flat buildings. Background

7 In response to the Directions, a further offer was made to Mr Khoury, the owner of 504 President Avenue, amended plans were prepared which lowered the building. A further joint statement by the planners, Mr Nash, for the council, and Mr Long, for the applicant, was also prepared as well as a statement by the traffic engineers, Mr P Anderson, for the council, and Mr T Lawrence, for the applicant, which addressed car access off President Avenue.

Proposal 8 The proposal is to demolish four existing dwellings and to construct two residential flat buildings comprising 39 units and basement car parking for 68 cars, including eight visitor spaces. The building fronting President Avenue, known as Block A is three storeys, and Block B, at the rear of the site along the railway easement, is four storeys. The car park is within a split level basement that extends between the two blocks, in part, beyond the footprint of the buildings and above existing ground level.

Statutory framework 9 Under Sutherland Local Environmental Plan 2000 (LEP 2000) the site is zoned 2(c) residential. The proposal is permissible with consent. 10 Draft Sutherland Local Environmental Plan 2004, Sutherland Shire residential flat buildings in the 2(c) residential and 9(a) mixed residential/business zones and Sutherland Shire DCP Precinct Six (Precinct Six DCP) are also relevant. 11 State Environmental Planning Policy No 65-Design Quality of Residential Flat Development (SEPP 65) also applies to the site and the Residential Flat Design Code (RFDC) must be considered. 12 The application exceeds the floor space ratio (FSR) standards in LEP 2000 and the applicant has submitted an objection under State Environmental Planning Policy No1 (SEPP1). This policy allows development standards to be varied provided their application is either unnecessary or unreasonable

Issues 13 The Statement of Issues filed by the council contained 10 issues which can be summarised into the key issues of whether:

i) the proposal will result in the inefficient and uncoordinated development of the area as 504 President Avenue is left in isolation, and ii) the height and bulk of the proposal is appropriate.

Amalgamation 14 In relation to the first issue, Clause 37 of LEP 2000 specifies a minimum allotment size for development within 2(c) residential zone as being: For residential flat building development, except where a development control plan specifies a minimum amalgamation of parcels or minimum allotment size for residential flat development, the minimum allotment size is 1800 square metres. The consent authority must consider any minimum amalgamation of parcels or minimum allotment size specified in any development control plan applying to the land. 15 Precinct Six DCP identifies the subject site together with 504 President Avenue as a minimum amalgamated development site. 16 The proposed development does not include 504 and therefore does not comply with the minimum allotment size. In determining whether this non-compliance is reasonable, the two questions I must consider are whether reasonable efforts have been undertaken to facilitate amalgamation of 504 into the development site and what are the consequences if amalgamation of 504 is not feasible. Planning Principles 17 The general questions to be answered when dealing with amalgamation of sites or when a site is to be isolated through redevelopment are:

· Firstly, is amalgamation of the sites feasible? · Secondly, can orderly and economic use and development of the separate sites be achieved if amalgamation is not feasible?

18 The principles to be applied in determining the answer to the first question are set out by Brown C in Melissa Grech v Auburn Council [2004] NSWLEC 40. The Commissioner said: Firstly, where a property will be isolated by a proposed development and that property cannot satisfy the minimum lot requirements then negotiations between the owners of the properties should commence at an early stage and prior to the lodgement of the development application.

Secondly, and where no satisfactory result is achieved from the negotiations, the development application should include details of the negotiations between the owners of the properties. These details should include offers to the owner of the isolated property. A reasonable offer, for the purposes of determining the development application and addressing the planning implications of an isolated lot, is to be based on at least one recent independent valuation and may include other reasonable expenses likely to be incurred by the owner of the isolated property in the sale of the property. Thirdly, the level of negotiation and any offers made for the isolated site are matters that can be given weight in the consideration of the development application. The amount of weight will depend on the level of negotiation, whether any offers are deemed reasonable or unreasonable, any relevant planning requirements and the provisions of s 79C of the Environmental Planning and Assessment Act 1979. 19 In the decision Cornerstone Property Group Pty Ltd v Warringah Council [2004] NSWLEC 189, I extended the principles of Brown C to deal with the second question and stated that: The key principle is whether both sites can achieve a development that is consistent with the planning controls. If variations to the planning controls would be required, such as non compliance with a minimum allotment size, will both sites be able to achieve a development of appropriate urban form and with acceptable level of amenity.

To assist in this assessment, an envelope for the isolated site may be prepared which indicates height, setbacks, resultant site coverage (both building and basement). This should be schematic but of sufficient detail to understand the relationship between the subject application and the isolated site and the likely impacts the developments will have on each other, particularly solar access and privacy impacts for residential development and the traffic impacts of separate driveways if the development is on a main road.

The subject application may need to be amended, such as by a further setback than the minimum in the planning controls, or the development potential of both sites reduced to enable reasonable development of the isolated site to occur while maintaining the amenity of both developments. 20 In applying these principles to the application before me, I find that in answering the first question the amalgamation of the sites is not reasonably feasible. I do not accept council's submission that as the parties are only $50,000 apart, amalgamation is feasible. Inherent in the concept of whether amalgamation is feasible is whether it is also reasonable. While it appears feasible to amalgamate the sites, it is on the basis that Mr Khoury's counter offer is accepted. I do not see it as the role of the Court to enter into negotiations on a final purchase price but rather to be satisfied that a reasonable offer has been made. Given the history of negotiations between the parties and the evidence before the Court I am satisfied that a reasonable offer has been made and that Mr Khoury is fully aware that access through his site is not required and the implications for re-development of his site in the event that it is not amalgamated with the adjoining sites.

21 In examining the attempts to amalgamate the site under the principles outlined by Brown C, firstly negotiations were commenced at an early stage. Mr Khoury's expectations at that time (of around a million dollars) were considerably greater than the applicant's valuation for this property. Mr Khoury appears to have held these views on the basis that the Precinct Six DCP does not permit vehicle access off President Avenue and that the easement for access passed through his land. The applicant took out options for the other sites, which expire in July 2004. The options for the three President Avenue properties ranged $710,000 to $740,000. These properties are comparable in size, location and characteristics to 504. On the basis of Mr Khoury's requested purchase price, the applicant lodged the development application, which did not include 504 in the site. 22 Secondly, the development application and the evidence before the Court include documentation of the negotiations between Mr Khoury and valuations, including an independent valuation on behalf of council. These indicate that the latest offer to Mr Khoury of an option for $800, 000, while not at the maximum end of the valuation, is a reasonable offer. 23 While amalgamation of the sites is likely to achieve a better planning outcome, I find that the principles outlined by Brown C have been met and that amalgamation of 504 is not reasonably feasible. In reaching this decision I have given weight to the efforts made by the applicant to initially amalgamate the sites; the application subsequently not including 504; the fact that the options for the other sites are about to expire and the rejection of the latest offer by Mr Khoury in full knowledge of the implications for his site. Amalgamation of the sites to achieve a desirable outcome must be balanced against one property owner frustrating the overall development and the property interests of other owners. 24 In dealing with the second question, can orderly and economic use and development of the separate sites be achieved if amalgamation is not feasible? While a development envelope for 504 was not prepared both experts examined the development yield and likely impacts of and on development at 504. The experts agreed that a development of 504 would not comply with the minimum allotment size of Cl 37 having a site area of 674 square metres where 1800 square metres is required and the frontage requirements of clause 38 in that it has a frontage of approximately 16 metres where 30 metres is required. Clause 39 permits development of a site with less than the minimum allotment size but only if the FSR does not exceed 0.7:1 and has a minimum landscape area of 65%. 25 While the evidence of the experts is that a development of 0.7:1 is achievable on the site they disagreed on whether the landscape area would be able to be achieved considering the driveway access and that car parking may exceed the footprint of the building. The submission of council, not raised in the first hearing but after the further information to satisfy the Court's direction was provided, was that acceptable solar access would not be achieved if 504 were developed separately. The evidence does not support this. I accept Mr Nash's opinion that an amalgamated site would enable more units to be orientated to the North but neither expert expressed the opinion that solar access would be unacceptable. 26 In relation to the Court's request that further evidence be provided on car access to 504, a joint statement was prepared which raised no objection to a separate car access off President Avenue. 27 The subject site and 504 is identified as an "amalgamated" development site in Precinct Six DCP. Objective (b) of cl 37 of LEP 2000 is to reduce the instances of isolated parcels being left with reduced development potential" To achieve this objective the minimum amalgamated site in Precinct Six DCP must be considered. I accept that development of this amalgamated site is desirable and is likely to achieve a better planning outcome. However, for the reasons outlined above, I am satisfied that amalgamation is not reasonably feasible and that a reasonable development at 504 is likely to be achieved as an isolated site.

Height and Bulk 28 In response to the Court's preliminary findings, the application was amended to reduce the height of the basement above ground by 500 mm. I am satisfied that this change will reduce the impact of the basement podium when viewed from the streets, particularly in the southeast corner and from 504. 29 The only outstanding issues between the experts were the four-storey height of Building B and the bulk of the development. Precinct Six DCP states: A maximum of 25% of the building footprint may be considered for 4 storey height allowance (including corner features) provided that overall civic design quality of the project add significantly to the locality. Items to be addressed in civic design quality include: i. Adequate provision of deep soil areas to ensure quality landscaping and native tree canopy provision. ii. Harmonious relationship between neighbouring buildings. iii. Enhancement of the street frontage and other public area. iv. the achievement of a single building mass where possible. v. sensitive application and integration of building materials, colours and tree plantings. vi. retention of significant trees. 30 The DCP identifies sites where a four storey height may be considered including adjacent to the railway embankment and on designated street corners. 31 Under Precinct Six DCP the corner of Acacia Road and President Avenue is designated as suitable for a corner feature of four storeys. The proposed development does not provide four storeys on this corner but rather along the railway embankment. The extent of the four storeys also exceeds the 25% maximum and instead provides 50% of the building footprint. 32 The experts agree that the proposed forth storey did not result in any adverse amenity impacts and that it is consistent with the civic design quality objectives of Precinct Six DCP. Although Mr Nash later qualified this by stating that he did have concerns about the impact of the four storeys on the streetscape and its relationship to 504. 33 Mr Long's opinion was that the four storeys met the civic design quality objectives. He stated that it was not desirable to have four storeys on the corner of President Avenue and Acacia Road, as this would overshadow the development itself. The location of the four storeys along the railway embankment and at the lower part of the size had no impact on the streetscape as it was not visible from many vantage points and due to the slope of the land would read as a building of similar height to Building A. 34 The proposed development also does not comply with the FSR controls in cl 35 of LEP 2000 having an FSR of 1.1:1 where 1:1 is the maximum. The experts agreed that this non-compliance was as a result of the definition of gross floor area, which includes car circulation space (680sqm). This area and one additional car parking space (20sqm) exceeded the standard. Mr Long submitted a SEPP 1 objection, which stated that compliance with the standard was not necessary as its objectives were met in that the FSR exceedance would not add to the bulk of the building. 35 I accept that both the four storey height of Building B and the FSR are reasonable. The development will provide a degree of consistency for existing residents as to the size and bulk of potential buildings in their neighbourhood" and therefore meets objective (a) of cl 35 I LEP 2000. The four storey height will read as a similar height to the other building in the development and to other buildings along Acacia Road. It meets the civic design quality requirements and does not adversely impact on the amenity of this development or other developments in the vicinity.

Conditions 36 The parties agreed on conditions with the exception of the condition requiring the overhead wires along Acacia Road to be placed underground. Precinct Six DCP states: All overhead wires along street frontages are to be placed underground on redevelopment. 37 The applicant did not object to this requirement along President Avenue but objected to it along Acacia Road, primarily on the basis that this is a major road, being an extension of the Princes Highway, and that the feasibility of undergrounding these overhead wires due to the number of services likely to be within the footpath was not reasonable. The DCP requirements are specific and should have been known to the Applicant at the time of submitting the development application. Accordingly I have agreed to the imposition of the condition sought by Council. Order The orders of the Court are:

Development application DA03/1755 for the demolition of existing dwellings and the construction of residential flat building consisting of 39 units and basement parking at 500-502 President Avenue and 139 Acacia Road, Sutherland, is determined by the grant of development consent subject to conditions in Annexure A.

The exhibits, except exhibits, N, 9 and 15, may be returned

                                                      Annelise Tuor
                                                      Commissioner of the Court

11658 of 2003 Karavellas Applicant v Sutherland Shire Council Respondent

Note: This preliminary finding was given orally at 3.30 on 15 April 2004. The Direction was issued at 2pm on 16 April 2004. The following is not a transcript but reflects the reasons and directions that I made.

38 The key issues in this appeal can be summarised as:

i) whether the proposal will result in the inefficient and uncoordinated development of the area as 504 President Ave. is left in isolation, and

ii) whether the height and bulk of the proposal is appropriate, considering the SEPP 1 Objection for FSR and the four storey height of Building B.

Amalgamation 39 In relation to the first issue, cl 37 of Sutherland Shire Local Environmental Plan 2000 (LEP 2000) specifies a minimum allotment size for development within 2(c) residential zone as: For residential flat building development, except where a development control plan specifies a minimum amalgamation of parcels or minimum allotment size for residential flat development, the minimum allotment size is 1800 square metres. The consent authority must consider any minimum amalgamation of parcels or minimum allotment size specified in any development control plan applying to the land" 40 Sutherland Shire Development Control Plan - Precinct 6 (Precinct Six DCP) identifiers the subject site and 504 President Avenue as a minimum amalgamated development site. 41 The proposed development does not include 504 and therefore does not comply with the minimum allotment size standard. In determining whether this non-compliance is reasonable, the two questions I must consider are whether reasonable efforts have been undertaken to facilitate amalgamation of 504 into the development site and what are the consequences if amalgamation of 504 is not feasible? 42 In dealing with the first question, the evidence as I understand can be summarised as follows:

43 The solicitors for the applicant made two offers to Mr Khoury, the owner of 504 President Avenue, being $725,000 on 9 July 2003 and $750,000 on 19 August 2003. The second offer was based on a valuation.

44 Mr Khoury rejected these offers and made a counter offer of 1.2 million later reduced to one million on 17 July 2003 and 6 September 2003 respectively. Mr Khoury also stated that he intended to develop the sites and referred to a right-of-way easement that runs through his property which he considered was necessary to gain access to the proposed development.

45 The development application was lodged on 10 October 2003.

46 Mr Khoury, on the 28 October 2003 objected to the development application, again indicating his assumption that access to the site would not be available from President Avenue, as had been the case when he had developed the adjoining site at President Avenue. He also indicated that approval of the development application would reduce the development potential of his site. 47 Mr Khoury wrote a further letter to council on 12 November 2003 in response to a letter from Counsel dated 5 November 2003, which is not in evidence. In his letter he says I again state that I'm willing to negotiate the inclusion of 504 by sale or by purchase of the whole site and even propose a meeting with the developer at the council chambers in front of you or a nominated officer to solve this problem. I like to add that at this meeting it will be the first time we have spoken to him about the amalgamation. There is no response to this letter in the council's bundle of documents. 48 Council undertook an independent valuation of number 504 on 9 September 2003 which stated that $750,000 is a reasonable purchase price and that under normal circumstances and adjoining owner will pay a premium in excess of market value which is generally accepted to be up to 10% which would support the purchase price therefore under the subject circumstances of $825,000. Obviously it is more desirable for number 504 President Avenue to be included within the amalgamated development site, hopefully the respective registered proprietors can reach formal agreement on the purchase price somewhere between $750,000 and $825,000. 49 In response to this valuation the applicant undertook a further valuation dated 29 January 2004 which reiterated the opinion that $750,000 is above market value and a reasonable expectation. By letter dated 5 February 2004, council's valuer agreed that $750,000 reflects market value and in the opinion of the opposing valuer, it does include a premium for inducement to sell. He further stated that the owner of number 504 was seeking considerably in excess of the above-mentioned figure and therefore, could be considered as being unreasonable in his negotiations"

50 This opinion was supported in the confidential report to council of 15 March 2004. Which concluded that refusal of the proposal of the grounds of variation to the amalgamation requirements would be hard to justify"

51 While from the evidence before the Court it would appear that the offer made to Mr Khoury is reasonable, Mr Khoury's reaction to the offer may also be reasonable in light of the planning controls and development history of the site. In particular the controls in Precinct Six DCP which prevent car access from President Avenue and identify 504 and the proposed development site as a minimum amalgamated site for development. This assumption may also be reasonable on the basis that car access off President Avenue to the development, which Mr Khoury undertook at 506-510 President Avenue, was prevented and the easement was created to provide access for cars and services to the subject site off Auburn Street. 52 The assumptions under which Mr Khoury appears to have rejected the applicant's offer no longer have validity as council is no longer requiring access for cars or services off the easement because substantial trees have now grown within the easement which council now considers are important to retain. 53 However, there is nothing in evidence that indicates that this has been communicated to Mr Khoury. There is also no evidence that the findings of council's independent valuations have been made available to Mr Khoury nor that any further attempt to make an offer was made once council's opinion about the easement was made clear and the independent valuation undertaken. This is further accentuated by the fact that the report to council was confidential and therefore not a public document.

54 I therefore do not consider that I have sufficient evidence to exercise my responsibilities under cl 37 in that an offer to Mr Khoury which reflects council's opinion re access and the independent valuation has not been made and therefore neither accepted or refused by Mr Khoury. I therefore cannot conclude that amalgamation of the sites is not reasonable or that Mr Khoury is acting unreasonably. In the event that such an offer was to be made and Mr Khoury was to refuse that offer in light of the facts before the Court, it could then be concluded that he was acting unreasonably. 55 The other question that needs to be considered in determining whether the proposal satisfies the objectives of the zone and the requirements of cl 37 is whether reasonable development can occur on number 504 as an isolated site. In this regard, development of 504 would not comply with the minimum allotment size of cl 37 having a site area of 674 square metres where 1800 square metres is required and the frontage requirements of cl 38 in that it has a frontage of approximately 16 metres where 30 metres is required. Clause 39 permits development of a site with less than the minimum allotment size but only if the FSR does not exceed 0.7:1 and has a minimum landscape area of 65%. While the evidence of the experts is that the development of 0.7:1 is achievable on the site they disagreed on whether the landscape area would be able to be achieved considering the driveway access and that car parking may exceed the footprint of the building. 56 In light of council's opinion that access is no longer appropriate along the easement from Auburn Street because of the need to preserve the trees, it follows that access to a development of 504 would also need to be off President Avenue and would be inconsistent with the Precinct Six DCP. This access would also be a maximum of about 10 metres from the access driveway provided for the subject site. The traffic impacts of this do not appear to have been addressed in either the council report or the expert's statements of evidence. 57 While reasonable development at 504 may be achievable it is unlikely to achieve the outcomes identified in the planning controls as well as a development of an amalgamated site would. In addition it would not produce the yield that would be available if it were amalgamated with the subject site as a floor space ratio of 1:1 is permissible for the amalgamated site. Objective (b) of clause 37 is to reduce the instances of isolated parcels being left with reduced development potential" I am not satisfied that this objectives has been achieved as, for the reasons given above, I am not satisfied the creation of an isolated parcel at 504 has been fully explored. 58 I therefore consider it reasonable that a further attempt to amalgamate the sites should be made. Council should advise the owner of 504 that access for cars and services is not required from the easement and of the findings of its independent valuation and the applicant should have the opportunity to again seek to purchase 504 consistent with its previous offer and the valuations. I note that the applicant's options for the other properties expire in July and that this matter needs to be finalised as a matter of urgency. I also note that while opposed by the applicant, council has indicated agreement to this course of action and raises no objection to an adjournment or to amended plans being lodged were the sites to be amalgamated.

59 In relation to the issue of height and bulk of the proposal, I find this to be generally acceptable for the reasons that I will outline in my final judgement. Except for the areas where the basement level is outside the building floor plate and above ground level, particularly where it adjoins 504. In the event that 504 is not amalgamated, the setback of this podium only one metre from the boundary and up to 1.4 metres above the ground level results in overlooking impacts which have been mitigated by conditions but rely on landscaping and planter boxes which further add to the bulk of the building in the setback area. As this has a direct relationship with the FSR non-compliance consideration should be given to whether the source of the problem can be eliminated, by further setback or lowering the car park, to prevent the impact. Direction

Council advise in writing the owner of 504 President Avenue by 5pm on 19 April 2004 that: (i) in relation to development of the subject site, access for services and cars is no longer required off the easement from Auburn St due to the requirement to retain the trees in the easement. (ii) The planning controls that would apply to 504 as an isolated site. 2. Should the applicant make a further offer of purchase to the owner of 504 President Avenue, such offer should be made by 5pm on 19 April 2004 and allow that owner until 4pm on 30 April 2004 to respond. 3. The council and the applicant prepare a joint statement which confirms that the requirements of 1 and 2 have been undertaken. 4. In the event that the owner of 504 does not agree to sell, a joint statement shall be prepared which addresses: (i) whether a separate driveway access to 504 is likely to have acceptable traffic impacts and whether shared access is feasible. (ii) options for lowering or setting back the basement level which adjoins 504 to prevent overlooking that is not totally reliant on landscaping. 5. The matter be set down for a further mention at 9.30 on 5 May 2004.

                                                      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.

CITATION : Karavellas v Sutherland Shire Council [2004] NSWLEC 251 APPLICANT PARTIES : Karavellas RESPONDENT Sutherland Shire Council FILE NUMBER(S) : 11658 of 2004 CORAM: Tuor C. Development Application :- Residential flat building KEY ISSUES: Planning Principle amalgamation of sites and isolation of sites through redevelopment Height and bulk Sutherland Local Environmental Plan 2000 LEGISLATION CITED: State Environmental Planning Policy No 65-Design Quality of Residential Flat Development State Environmental Planning Policy No1 CASES CITED: Melissa Grech v Auburn Council [2004] NSWLEC 40; Cornerstone Property Group Pty Ltd v Warringah Council [2004] NSWLEC 189 DATES OF HEARING: 13/04/2004, 14/04/2004 and 17/05/2004 EX TEMPORE 05/17/2004 JUDGMENT DATE :

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