Luxcon Developments No 6 Pty Limited v Woollahra Municipal Council

Land and Environment Court (NSW)|2017-08-02|Before: Mr P

Judgment

The applicant, Luxcon Developments No 6 Pty Ltd seeks consent for a mixed use development which includes both retail and residential uses. The development site, at 528 - 536 Old South Head Road Rose Bay, is zoned B4 Mixed Use under the Woollahra Local Environmental Plan 2014 (WLEP).
The only relevant form of residential accommodation which is permissible in that zone is 'shop top housing', defined in the LEP as "one or more dwellings located above ground floor retail premises or business premises".
The applicant has characterised the development as 'shop-top housing'. It describes the proposal as comprising: the demolition of the existing buildings, excavation for one basement level and lower ground floor and construction of one building, comprising a 4 storey mixed use building above and three storey townhouse building above, containing in total 17 apartments and a retail tenancy at ground level.
The Council does not accept that the development can be properly characterised as 'shop top housing'; and as such, it is a prohibited development.

Issues

The first issue to be determined is the appropriate characterisation of the development. Put simply, unless the development can be characterised as 'shop top housing' the parties agree that the development is for a prohibited use. And, if that is the case, the Court has no jurisdiction and must dismiss the appeal.

Expert evidence

The Court received expert evidence from the town planners; Larissa Brennan (engaged by the applicant) and Daniel McNamara (engaged by the Council) and the Council's internal urban design expert Tom Jones.
The experts' joint report in the proceedings is marked Exhibit 5.

Facts

The following facts, drawn from the Council's ASOFC, the applicant's statement in reply and (Exhibit 5, p 3, [8]) give context to the issues as outlined.
There are four types of residential development which are permissible with consent in the B4 Zone: boarding houses, dwelling houses, seniors housing and shop top houses.
The experts agree that the application before the Court is not for a boarding house, dwelling house or seniors housing.
The WLEP defines basement to mean "the space of a building where the floor level of that space is predominately below ground level (existing) and where the floor level of the storey immediately above is less than 1 metre above ground level (existing)".
The WLEP does not define a "ground floor". However, the experts accept that a site can have multiple 'ground' levels; they do not need to be at the same level. (Albeit the Council contends that each ground floor must address a street frontage).
The development site is a sloping site - which falls from the frontage at Old South Head Road to the rear of the site between approximately 1.06m to 1.4m. Vehicular access to the site is only available from old New South Road. A separate pedestrian stair access is provided to the lower ground floor level from Dover Lane via an existing right of way and a fire stair.
The marked up section D plan prepared by Mr McNamara (and accepted as accurate by Ms Brennan) identifies the lower ground level and the basement in the development.
In particular, the plan, in section demonstrates part of the lower ground level is not a basement as defined under WLEP 2014 because the floor level of the storey above is in part located more than 1 metre above the existing ground level. Although, the part of the lower ground level that is located below the retail premises and services is defined as a basement by Woollahra LEP 2014.
The lower ground level contains uses that are subordinate to the retail premises including retail parking, garbage storage and a retail loading bay. The lower ground level also contains the residential garbage, services and visitor parking for the residential use of the building.
Units G01, G02 and G03 are located above retail uses on the area described as lower ground level.

Issue 1 - Council's position

The Council relies on the Court's interpretation of the definition of 'shop top housing' in Hrsto v Canterbury City Council (No2) [2014] NSWLEC 121 and Arco Iris Trading Pty Ltd v North Sydney Council [2015] NSWLEC 1113 to support its case that the development under review is not 'shop top housing'.
According to the Council in Hrsto Sheahan J dealt with the same question in relation to a mixed use development in the B2 zone.
At [56] his Honour held: [56] To qualify as "shop top housing" the relevant part of the building must be truly "above" the relevant retail commercial uses.
The relevant submissions adopted by His Honour in the judgment are set out at [34] (referring to the council's submission ): … [33] … a dwelling must be in the same building as the ground floor retail premises or business premises and on a floor of that building that is at a level higher than the top most part of the ground floor retail premises or business premises in order to be characterised as "shop top housing".
It is further submitted that the decision was subsequently applied by Moore SC when considering the same question in Arco Iris Trading Pty Limited v North Sydney Council [2015] NSWLEC 1113.
In Arco, Moore SC held that it was possible for a building to have two ground floor levels [18]. However, the Council contends that the Court mandated that the level in question had to address a street frontage. In fact, the Senior Commissioner said: "I am satisfied that it is possible to have two ground levels to a single building provided each ground floor level relevantly addresses Street frontage." (Emphasis added)
Moore SC then found - on the facts of that particular case, and having reviewed the sections of the proposed building - that the development did have two ground levels at [19]: Any rational consideration of any of the sections contained in the two plans to which I have earlier referred, discloses that there is a car park which is at ground level, running at ground level to the South from Grosvenor Lane.
Council submits on the basis of Moore SC's findings in Arco, that the development in that case was shop top housing because the dwelling in question was above car parking at ground level (with a street frontage) which had been allocated to a commercial tenancy.
In this case the critical issue is whether the ground floor dwellings (GO1-GO5) are "located above ground floor retail premises or business premises". To be shop top housing, the floor level of those dwellings must be higher than the top most floor of the ground floor retail or business premises; Hrsto, Arco.
They are not, as is apparent from the development plans. The applicant relies on the space called "lower ground level", which contains car parking for the retail component of the development, as being "ground floor retail premises".
However, the Council submits that lower ground car park does not satisfy either of the two requirements set out in Arco:
First is does not address a street frontage. Secondly it is not at ground level. In short, the development does not satisfy either limb of the requirements set out in Arco.
In support of this submission the Council relies on the evidence of all three town planners who accepted that the lower ground floor is not a ground floor.

Applicant's submissions

The applicant also relies on the decision in Arco to support its case. It contends that the proposed development has two ground floor levels just like in Arco and each ground floor level contains retail use with a dwelling above.
In summary, the applicant's position is that the area identified on the plans as the lower ground level, which contains car parking for the retail component of the development, is ground floor retail premises. This area is not a basement, as defined in the WLEP, because the floor level of the storey immediately above is more than 1 metre above ground level existing. Therefore, the space is quite properly described as a lower ground floor retail which is accessible by a separate pedestrian access from Dover Lane via an existing right of way and a fire stair.
Such characterisation, it is submitted, is entirely consistent with the principles discussed in Chamwell Pty Limited v Strathfield Council (2007) 151 LGERA 400; [2007] NSWLEC 114 at [27]-[50]. In the zone B4, any purpose other than those permitted expressly are prohibited. Hence, development for the purpose of parking would be prohibited if it is an independent purpose, although not if the parking is subordinate to another permitted purpose of development such as retail premises or business premises and dwelling house uses as part of shop top housing. Therefore, the parking designated to retail premises use (RET) on the lower ground level plan constitutes a separate defined use of that level when properly characterised as retail.
Therefore, the resulting development is retail use with dwelling above. Development which can be properly characterised as shop top housing as defined in the WLEP.

Issue 1- Finding

The parties are in general agreement as to the applicable authorities although each has a different view of the legal principles arising from that case law.
The Court accepts the Council's interpretation for the following reasons.
It is our considered opinion that the comments made at [38]-[41] in Arco that the vertical separation of the lower ground floor from the footpath/street frontage means that this floor cannot be described as being at ground level. The experts, including Ms Brennan the applicant's planner, concede as much.
Moreover, the fact that the level is described on the plan as 'lower ground level' does not mean it is a second ground level for the purposes of founding an argument that what is proposed is 'shop top housing'. In our assessment, such a description belies common sense and is a contortion of the definition in order to justify a mixed use development which is clearly something different; and thereby prohibited in the B4 zone.
Needless to say, if the lower ground level had a street frontage at ground level and the retail parking as proposed then we accept on the basis of Arco, that it would constitute a second ground floor. In that circumstance the development could be characterised as shop top housing. However, that is not the proposal before the Court.

Issue 2- Merits/Contention 4

Given our finding that the development is prohibited, the Court has no jurisdiction to deal with the merits of the proposal.
The practice in recent times by some Commissioners, to proceed to deal with the merits of a proposal - despite a finding of no jurisdiction - is generally unhelpful. The Court's assessment of the merits of a particular development at any given point of time offers no guidance or assurance of an approval of such development in the event of jurisdiction being otherwise available. The consent authority must undertake the appropriate assessment of a development according to the circumstances and planning controls at the relevant time: Manzie v Willoughby City Council (1996) NSWLEC 26.

Outcome of the appeal/orders

For the reasons stated, the Court has decided that the development cannot be properly characterised as 'shop top housing'. Accordingly, it follows that the application must be refused development consent and the appeal dismissed.
The Court orders are: 1. The appeal is dismissed. 2. Development consent to development application DA 9/2017 lodged on 6 January 2017 for the demolition of existing buildings , excavation and construction of a mixed use development comprising of 17 residential units above 92,m2 of retail and car parking at 528-536 Old South Head Road is refused consent . 3. The exhibits are returned. …………………….. ………………………. Commissioner Bish Commissioner Dixon

Amendments 11 August 2017 - Typographical errors 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: 11 August 2017

(2007) 151 LGERA 400

At a glance

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Judgment (10 paragraphs)

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Cases Cited (4)

Cited By (1)