Marana Developments v Botany Bay City Council

CASES CITED: Carstens v Pittwater Council [1999] NSWLEC 249 111 LGER BGP Properties Pty Ltd v Lake Macquarie City Council [2004] NSWLEC 399

DATES OF HEARING: 2 June 2010 and 3 June 2010

APPLICANT Mr I Hemmings (barrister) SOLICITOR Reid & Vesley LEGAL REPRESENTATIVES:

RESPONDENT Mr T Hale (senior counsel) SOLICITOR Houston Dearn O'Connor

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

11009 of 2009 Marana Developments Pty Limited v Botany Bay City Council

1 The Applicant in these proceedings is seeking to Strata Subdivide the residential flat building known as 24 Rhodes St Hillsdale and subdivide the existing land into two lots. In addition to the subdivisions it is proposed to convert the existing common laundry on the ground floor into a one bedroom unit and the existing driveway under croft area into a one bedroom unit. This will bring the total number of units in the strata to 34. The entry to the residential flat building is to be relocated to be from Flack Avenue. It is also proposed the building be refurbished. 2 Proposed refurbishment works to upgrade the building are as follows: provide new internal laundry facilities, kitchens, bathrooms, carpeting, painting, blinds and doors to each unit; redesign the car parking area to accommodate 34 resident spaces and 4 visitor spaces; new garbage and recycling bin storage area; letter box facilities and street numbering; existing face brickwork to be painted; and new landscaping for the site.

3 Figure 1 is an extract from the LEP zoning map and this shows the subject site in its context. The site has a total area of 5636 square metres. Currently erected on the subject site is a dwelling house and a "U shaped" residential flat building containing 32 units and open car parking at ground level. The residential flat building was constructed in the 1960's. Current vehicular access to the site is via Flack Avenue and Rhodes St. 4 By way of background on 25th May 2009 the Council approved demolition of the existing structures and the construction of a new 76 unit residential flat complex and basement car parking and a Stage 1 and Stage 2 Construction Certificate. 5 To the immediate east of the site is Matraville Public School, to the north of the site is Rhodes Street Reserve, owned by Sydney Water. To the south of the site are a mixture of residential flat buildings, dwellings and townhouses. To the west of the site opposite Rhodes Street is a mixture of single and two storey residential dwellings. Statutory planning framework

6 The Environmental Planning and Assessment Act 1979 sets out Objects of the Act in s.5 to include: (a) to encourage: i. the proper management, development and conservation of natural and artificial resources, including agricultural land, natural areas, forests, minerals, water, cities, towns and villages for the purpose of promoting the social and economic welfare of the community and a better environment ii. the promotion and co-ordination of the orderly and economic use and development of land, vii. ecologically sustainable development 7 Section 79C (1) contains matters for consideration In determining a development application, a consent authority is to take into consideration matters that include: - the likely impacts of that development, including environmental impacts on both the natural and built environments, and social and economic impacts in the locality; - the suitability of the site for the development; - the public interest. 8 The subject site is zoned Residential 2 (b) under the Botany Local Environmental Plan 1995. Clause 5 contains relevant objectives in relation to the form and function of the local government area of Botany Bay and relevantly include: (c) to make the local government area of Botany Bay City a more attractive and pleasant place in which to live, work and visit

(d) to improve the image of the local government area of Botany Bay City by ensuring that developments are of a good standard of design, form and function

(e) to protect areas from inappropriate development and to ensure that, in particular, residential amenity, health and safety is maintained or improved, where necessary.

9 For residential development the objectives of the LEP are: (a) To maintain, protect and increase the local government area's permanent residential population;

(b) To encourage, where appropriate, the renovation and upgrading of existing dwellings, while ensuring that dwelling forms, including alterations and additions, are in sympathy with the amenity of surrounding residences. 10 Clause 10 requires the relevant objectives to be considered in determining development applications.

11 The primary objective of the Residential 2(b) zone is to provide for the development and use of housing, other than detached housing, in appropriate locations, together with community and service uses of a type and scale appropriate to the enjoyment of such housing. Secondary objectives are: + To provide scope for high quality residential development in innovative forms on identified sites; + To improve the quality of the residential amenity by encouraging landscaping and good design in both new developments and renovations; + To encourage the revitalisation and improvement of older established residential areas by rehabilitation and suitable redevelopment; + To encourage energy efficiency and energy conservation in all forms of development permissible within the zone. 12 Clause 11of the LEP relates to the subdivision of land and it states: "a person may subdivide land to which this plan applies but only with the consent of the Council". 13 The floor space ratio in cl12 for the 2(b) zone is 0.5:1. However the Council may consent to the carrying out of residential development on land within Zone No 2(b) to a maximum floor space ratio of 1:1 where the allotment exceeds 2,500 sq m and where it is of the opinion that: "the proposed development will satisfy the primary objective of the zone". 14 The Sydney Metropolitan Strategy 2005 identifies ten subregions across the Sydney Region. The Botany Bay Local Government Area (LGA) is located in the East Subregion along with Randwick, Woollahra and Waverley LGA's. The 2007 draft East Subregional Strategy identifies for LGA the Botany Bay dwelling target of 6,500 and an employment capacity target of 16,700 for the period 2004 to 2031.

15 In 2007 the Council prepared the Botany Bay Planning Strategy 2031 (2007) and this states it is estimated that with adjustments to development controls the Botany Bay LGA could provide capacity for around 3,800 new dwellings in and around centres with good amenity. The Strategy Principles include: * Enhance existing and future urban character, improve amenity and protect areas of cultural and environmental significance, * Consolidate residential activity in and around existing centres and support their revitalisation. * Ensure that future urban development is guided by principles of good urban design and built form.

16 The Strategy 2031 identifies the expected additional dwelling stock to be provided in the Hillsdale district as +80 in the short term (defined as over the next 4 years; 2007 - 2011) and +250 in the medium term (defined as being over the next 4 to 7 years; 2011-2015) from a current dwelling stock of 1,560 in 2007. 17 Chapter 5 in the Strategy provides guidance on the interpretation of the Implementation Plans and states: (a) The implementation guidance provides recommendations to assist City of Botany Bay Council with the development of its comprehensive LEP and a limited range of other support actions to implement the Botany Bay LGA 2031 Draft Planning Strategy. (b) These are ultimately only a guide for Council's consideration . 18 For area 6 of Daceyville to Hillsdale the implementation plans short term and medium to long term identify potential future uses of land in that locality. The recommended actions include: (a) Increase residential density potential at Hillsdale (corner of Flint Street and Bunnerong Road); establish FSR 0.9:1 t o1.2:1; investigate potential for minimum bedrooms/dwellings yield controls to ensure sites are not underdeveloped. (b) Increase residential density potential around Hillsdale/Southpoint (east of Rhodes St); undertake comprehensive structure planning. 19 The site at 24 Rhodes St Hillsdale is not specifically identified nor is it cross hatched for a review in use, over either the short or medium to long term.

20 Development Control Plan No. 35 - Multi Unit Housing and Residential Flat Buildings August 2004 co-ordinates Council's broad land use and zoning functions. The aims and objectives of DCP 35 include: (a) To ensure high quality new multi unit housing and residential flat buildings in the city of Botany Bay; (b) To guide the implementation of the design quality principles in State Environmental Planning Policy No 65. Design Quality of Residential Flat Development; (c) To promote the principles of ecological sustainable development through energy efficient methods, stormwater management, waste reduction techniques, landscaping and crime prevention techniques; (d) To provide for a range of housing types and forms to accommodate diverse and changing population; (e) To protect the amenity of existing residents. 21 Section 2.7 of DCP 35 provides design principles for new multi-unit housing and residential flat development for Hillsdale (Precinct 7) as follows: (a) Building design and site layout of developments is to create an attractive and pleasant environment for future residents. (b) The design of building and site treatment are to improve upon and enhance the current character and atmosphere within the suburb. (c) New development must have a clear presentation to the street with the scale and height of buildings being sympathetic to the overall character of the surrounding area. 22 Section 2.7.4. provides design principles for refurbishment, alternations/additions and strata subdivision of existing Schedule 7 walk-up residential flat building development in Hillsdale (Precinct 7) and includes: (a) Alterations/additions are to create an attractive and pleasant environment for future residents (b) The design of alterations/additions and site treatment are to improve upon and enhance the current character and atmosphere of the suburb (d) Development bonuses in the form of height concessions and increased floor space ratios will be considered by Council in development scenarios that result in the revitalisation/redevelopment of existing residential flat buildings . 23 Further reference is made to Section 6 of the DCP which refers to refurbishment, alterations/additions and strata subdivision of existing residential flat building development within the Hillsdale and Eastlakes precincts. 24 Section 3.2 sets out the general design elements for building form and character for multi unit housing and residential flat buildings. The objective for floor space ratio is to ensure that new development results in an FSR that is compatible with the existing zoning and future character of the area. 25 Section 3.3.2 relates to apartment layout, sizes and mix and defines the objectives for multi unit housing developments and apartments in residential flat buildings as including: * To ensure that dwellings are efficient, have high standards of amenity for residents and satisfy environmental performance criteria, such as ventilation and access to natural light * To ensure residential development contains a mix of residential types (based on the number of bedrooms) to increase the potential for a balanced population. 26 Section 6 deals with alterations, additions and refurbishment of existing Schedule 7 walk up residential flat buildings including strata subdivisions of such buildings. The objectives provide: (a) To encourage the refurbishment of existing Schedule 7 walk-up residential flat buildings; (b) To improve the residential amenity of existing Schedule 7 walk up residential flat buildings; (c) To encourage the revitalisation of areas that are concentrated with Schedule 7 walk up residential flat buildings . 27 Section 6. provides a list of matters for the development of Schedule 7 walk up flats including: * C1. The alterations/additions/refurbishment to the exiting buildings are to be designed so that there is adequate provision for the intended occupants in terms of amenity - dwelling sizes, balcony sizes, open space provision, storage, landscaping, acoustic and visual privacy, safety and security, pedestrian access and circulation. * C5. Statement of Environmental Effects and plans to accompany Development Applications for alterations, additions and refurbishment to existing buildings, including the strata subdivision of the building, are to address compliance with the BCA. 28 Development Control Plan - Building Design and Construction 2002 applies to residential development in the Residential 2(b) zone. This DCP aims to provide detailed design controls to ensure that development responds to its context and achieves a high quality built environment. This contains provisions to ensure the adequacy of room sizes, apartment areas should be restricted to the following net areas: Studio apartments 60m 2 One bedroom 75 m 2 Two bedroom 100 m 2 Three bedroom 130 m 2 Four bedroom 160 m 2 29 Development Control Plan (DCP) 7 - Subdivision (version 2) 2006 has been prepared to provide development guidelines in relation to all applications for subdivision of land. The objectives of the DCP are to: * Promote a high standard of development within the City of Botany Bay; * To ensure that new Torrens Title residential apartments, created by subdivision, are of sufficient size and shape to accommodate development that is compatible with the quality of development Council seeks to encourage in the surrounding neighbourhood; * To ensure that any Strata subdivision, whether of a new or existing building, creates Strata Residential lots and Common Property lots of a size, standard and amenity that is compatible with Council's controls, policies or requirements, current for such developments at the time of lodgement of the Strata Subdivision application.

30 The Subdivision DCP provides for in Zone 2(b) Residential B that "Council may grant consent to the Strata Subdivision of a multi unit residential building subject to the multi unit residential building complying with all of Council's relevant Development Control Plans, draft Development Control Plans, policies or requirements for such buildings of that type current at the time the Strata Subdivision application is made." Issues 31 The respondent provided a Statement of Contentions in the proceedings as follows: (a) The proposed development fails to satisfy the secondary objectives of the Residential 2(b) zoning i. The proposed development will limit the potential for high-quality residential development on the site and will also have a negative impact on the revitalisation and/or improvement of the area of Hillsdale. Strata subdivision of the existing building will artificially preserve a building which is obsolescent, does not meet contemporary accommodation standards. ii. The proposed development will also have an adverse impact on the residential amenity of the occupants by preserving a building which contains units which do not comply with current standards (e.g. appropriate unit sizes, unit mix, car parking, shared balconies, acoustic separation etc.). (b) The proposed development fails to satisfy the objectives of Clause 5(2) of Botany Bay Local Environmental Plan 1995 . i. The proposed development does not satisfy the requirements of the NSW Metropolitan Strategy 2005, the Draft East Subregional Strategy or Council's Botany Bay Planning Strategy 2031 (pp 5 and 6). These strategies contain targets for additional dwellings. Strata subdivision of the existing building will artificially preserve the building and will obstruct Council from achieving its strategic planning targets for an increase in the number of dwellings and in the LGA's permanent residential population. (c) The proposal fails to satisfy or comply with DCP 35 in that it fails to: i. Ensure high quality new multi unit housing and residential flat buildings ii. Provide for a range of housing types and forms iii. Adequately address Clause 3.3.2 in that unit sizes are not large enough and there is a lack of mix of unit types (d) The proposal does not satisfy Sections 6.1, 6.2 and 6.3 of DCP - Building Design and Construction by failing to provide: i. Appropriate access for people with disabilities to facilities and amenities ii. Doors and doorways of adequate width and design to enable access to all public areas within the buildings iii. Room shapes and dimensions which allow flexibility in use and furniture arrangement iv. Rooms off a central circulation space connected to the entry v. Units which comply with the following requirements: 1. Studio 60m 2 2. One bedroom 75 m 2 3. Two bedroom 100 m 2 4. Three bedroom 130 m 2 5. Four bedroom 160 m 2 (e) The proposal does not satisfy Section 3.2 of Off Street Car Parking DCP by failing to provide: 1. One space per small or medium dwelling 2. Two spaces per large dwelling 3. One visitor space per five dwellings (f) The proposal fails to satisfy Section 9.2 of DCP 7 - subdivision. (g) The proposed development fails to satisfy s.9.2 DCP Access. (h) No information provided (i) The proposed land subdivision fails to satisfy s.4, 5, 6, 7 and 8 of the Guidelines for Design of Stormwater Drainage systems. (j) The proposed development fails to satisfy SEPP BASIX 2004 as no certificate has been provided as part of the Development Application. (k) The present residential flat building on the site is obsolete and of low quality and fails to comply with: 1. The objectives and controls of the LEP, the zone, DCP 35, DCP Building design and construction, DCP Subdivision 2. The planning objectives for quality residential development 3. Inter-apartment acoustic provisions of the Building Code 4. The need for greater diversity in housing choice in the Botany Bay Council area and the locality of Hillside in particular , and to permit the strata subdivision of the residential flat building would have the effect of prolonging the life of an obsolete and low quality building and inhibiting the redevelopment of the site for quality residential development. (l) The land subdivision would have the effect of: a. Restricting the opportunities for development of the site and reducing the flexibility of design for future development which would meet the objectives and controls of Council, of Council's planning objectives for high quality residential development and the Council's strategic objective for increased population in the Council area in general and Hillsdale in particular. b. Reducing flexibility of vehicular access to the site by reliance only on Flack Avenue (m) The development is not in the public interest in that for the reasons referred to, the development is contrary to the objects of the Environmental Planning and Assessment Act, section 5 (a) (i), (ii) and (vii). Evidence and Submissions

32 The Court met on site on the first morning of the hearing with the parties and undertook an inspection of the subject flat building, and also was taken to view a recently refurbished residential flat building where the applicant was granted approval for Strata Subdivision on Rhodes St Hillsdale. The Court observed that this was a considerably smaller lot with a higher FSR although no data was provided on the actual values of lot size and FSR's. 33 The Court received individual Statements of Evidence and a Joint Town Planners' Expert Report prepared by Mr Lindsay Fletcher, consultant planner for the applicant and Mr Michael Neustein, architect/planner, for the respondent. 34 The Joint Town Planner's Expert Report agreed that:

"The proposal for improvements to the building and its curtilage would be acceptable were it not for the proposed land subdivision and strata titling of the project". 35 Council's expert Mr Neustein, stated in the Joint Expert report, inter alia: i. Locality of Hillsdale identified in Botany Bay Planning Strategy 2031 as a target area for substantial increase in dwelling numbers to meet requirements set by the State Government. The Strategy calls for additional 330 dwellings on current base of 1560 incl Southport Tower. ii. Core of Hillsdale nearly all Strata subdivided. iii. Subject site is one of only three large sites capable of major redevelopment iv. Lacking a mechanism for dissolution of strata schemes, the life of a building in multiple ownership is in excess of 50 years. v. Bulk of the remainder of the Hillsdale locality is small lot, single family housing which could be subject to increased density to reasonable but not sufficient extent by either site amalgamation or subdivision, subject to zoning changes being investigated. vi. Approved DA for the site allows for 6 storey building and a FSR of approximately 1.4:1 well above that normally permitted. The Approved scheme, compliant with SEPP 65, increases apartment numbers by approximately 30 dwellings. vii. Small units, poor access design, surface parking and limited site landscaping within existing building - standards no longer suitable for housing. viii. The termination of strata schemes is very difficult and no evidence is provided that this may be achievable in the future. ix. 1 bed units comprise 58% of overall unit mix, with the other 42% being 2 bed units. Strata subdividing development would prolong limited mix of housing which is not suitable for increasing local population which will need a variety of unit sizes. x. Best use of the subject site is for greatly increased density of development. xi. The orderly and economic interests of the community at large require the land to be put to its best use and, if not, to retain sufficient flexibility for this to be done in the short to medium term. 36 The Applicant's expert witness, Mr Fletcher stated in the Joint Expert report, inter alia: i. The proposal is entirely consistent with the primary objective of the zone in that it provides for continued use of the site for the purposes of housing other than detached housing, and is an appropriate location. ii. The secondary objective (a) is not relevant to the subject development proposal as this is not an "identified site" under the LEP. iii. The proposal is entirely consistent with secondary objectives (b) and (c) in that it proposes alterations and upgrading of an existing residential flat building that will improve the quality of the residential amenity by providing improved landscaping and good design with upgraded fittings and fixtures in the proposed renovations and, by doing so, will revitalise and improve part of an older established medium density residential area by rehabilitation and improvement of an existing development. iv. Given that the building was constructed in the 1960s it is not surprising or unexpected that the existing building does not meet some of the current standards of Council's DCP. Nevertheless, the fact that the building contains units that are smaller in area than contemporary standards in relation to unit sizes and unit mix, does not mean that the building is unsound, unhealthy, obsolescent or inappropriate for continued residential use. v. Council's expert Michael Neustein stated that no objection would be taken to the renovation of the subject building were it not to be strata subdivided. In my opinion it is the age, characteristics and condition of a building that are the key determinants of its suitability for redevelopment. The need to consolidate separate ownerships is a constraint but is not sufficient reason to deny an otherwise desirable upgrading of the building. vi. In relation to unit sizes, it is my opinion it would be unreasonable to retrospectively apply the requirements for new development to the refurbishment of a building constructed more than 40 years ago. vii. It is clear that Council's preference is for demolition and total redevelopment of the land. However, for that outcome to be achieved the financial feasibility would have to provide a greater return to the property owner than the return from the proposed refurbishment in order for there to be an economic incentive for redevelopment.

Strata subdivision 37 Concurrent evidence was provided by the Town Planning experts. Mr Neustein reinforced the Councils view that Strata subdivision of the site would make it more difficult to re-amalgamate at a point in the future, for the purposes of redevelopment. In response to a question Mr Fletcher agreed that it was a large block of land at 5636 sq m and that such Strata Subdivision would make it more difficult to, and reduce the prospects of, redevelopment of the site. But Mr Fletcher also made the point that redevelopment was more likely on the new lot to be subdivided. 38 It was submitted by Mr Hemmings for the Applicant that the NSW State Government is considering amendments to relevant instruments and Strata Title rules, to require only 75% of owners to agree to redevelopment in future. However, he conceded that currently 100% of owners would be required to agree to a future redevelopment at present.

39 Mr Neustein states that Hillsdale had already been Strata Subdivided and that the map cross hatching (indicating future redevelopment areas) in relation to the Hillsdale area was in error and the mapping was wrong. He considers this is a key site for achieving the Council's Metropolitan dwelling targets and he referred the court to the objectives of the plan. 40 On behalf of the Respondent it is submitted: (a) The building in its present form does not meet contemporary standards especially in terms of size and amenity and does not comply with DCP 35 and DCP Building Design and Construction (BDC). (b) The refurbishment of the existing building does not require development consent as it does not amount to development. The construction of the two new units does require development consent. Notwithstanding that they are in breach of DCP 35 and DCP BDC, the Council does not oppose the grant of development consent. The amenity and size of the unit matches that which is already there. (c) It is against this background that the issues in dispute may be considered, namely, whether the Court would or should grant development consent for: i. the strata subdivision of the existing residential flat building ii. the proposed subdivision to divide the lot of 5636 sq m into two lots - Lot 10 of 3,824 sq m and Lot 11 of 1811 sq m. (d) In the circumstances of this case at least one of the objects of the EP&A Act, s5(a)(ii) is a mandated matter for consideration under s.79C(1) see: i. Carstens v Pittwater Council (1999) 111 LGERA 1 at [20]-[27} ii. BGP Properties Pty Limited v Lake Macquarie City Council (2004) 138 LGERA 237 at [99]-[114]. (e) The imperatives of planning since the Metropolitan Study require the promotion of the orderly and economic use and development of land to provide dwellings in Botany Bay and Hillside in the period to 2031. (f) What is proposed squanders an opportunity for development in conformity with those planning objectives on a site ripe for redevelopment. It squanders the opportunity for the proper redevelopment of a large area of land in Hillsdale to provide much needed dwellings. To grant the strata subdivision and/or the land subdivision would be contrary to an objective of the Act and hence the public interest. Assessment and Findings

41 The experts agree that the proposal for improvements to the building and its curtilage would be acceptable were it not for the proposed land subdivision and strata titling of the project.

42 The fundamental issues contended by the respondent are that the proposed strata subdivision and the subdivision of the land would not result in the orderly and economic use of the land. This is because once subdivided, there would be a number of owners and the practical consequences are that it would be difficult to redevelop.

43 Mr Fletcher in his Statement of Evidence in the conclusion states that: The proposed development is permissible with consent in zone 2 (b) Residential zone under Botany LEP 1995 and complies with the FSR ... In my opinion, the proposal is entirely consistent with the primary objective of the zone and the secondary objectives b, c and f. In my opinion the proposed building alterations and the proposed landscaped treatment will significantly enhance the external appearance of the development, both from the streetscape and from other areas of the public domain. There is a current development consent that involves demolition of the subject building and total redevelopment of this site with adjoining properties. It seems clear that council's preference is for demolition, and total redevelopment of the land. However, in my opinion it is inappropriate for a planning authority to try and force comprehensive redevelopment by preventing an otherwise desirable upgrade existing buildings.... In my opinion, if council is serious about encouraging demolition and total redevelopment of this and similar sites in Hillsdale, it should do so by revising its planning controls. ... To provide the necessary incentive to make comprehensive redevelopment a more attractive financial option.

44 In Mr Neustein's statement, he concludes that: No objection will be taken to the renovation of the subject building were it not to be strata subdivided. It is the virtually permanent removal of the site from prospects of redevelopment, which concerns the council. Clearly, the council will have considerable difficulty meeting state government housing targets, in an LGA bisected by aircraft noise zones, if redevelopment opportunities are squandered.

The existing building on the subject site is of an obsolete design, built to space standards no longer considered appropriate (even for affordable housing) and accessed via long walkways or balcony. No action should be permitted, which prevents the building from being redeveloped in the short to medium term. Strata subdivision should not be permitted in any circumstances under which the building on the site is given further life.

45 On the issue of public interest Mr Neustein states the best use of the subject site is for greatly increased density of development. It is unusual in the extreme to have a council pushing an applicant to redevelop at an FSR higher than that normally permitted. This is the case for good strategic reasons in the subject matter. The orderly and economic interests of the community at large, require the land to be put to its best use and, if not, to retain sufficient flexibility for this to be done in the short to medium term.

46 Mr Neustein states that the locality of Hillsdale has been identified by the Botany Bay Planning Strategy 2031 as one of the target areas for a substantial increase in dwelling numbers to meet the requirements set by the state government under the Metro Strategy. By 2031 the strategy calls for an additional 330 dwellings on a current base of 1560 dwellings.

47 We note that the Strategy 2031 contains a number of constraints and opportunities including: Sydney Airport; Port Botany; heavy industry hazardous goods routes; and land severely affected by aircraft noise. The respondent submits the subject site as shown in figure 2 is one of the few large residentially zoned sites in Hillsdale. The Strategy states "in terms of development potential that the eastern part benefits from fewer environmental impacts than elsewhere in the LGA and notes that additional development potential may be created in the medium term following investment in public transport, site assembly and public domain upgrades. This particularly applies to East Lakes, Hillsdale and Pagewood". 48 The Strategy defines short term as, up to 4 years medium term for 7 years and long term beyond 2015 it states that "the Hillsdale short-term development area is north of the South Point shopping centre ... more significant intensification at Hillsdale is particularly constrained due to the high proportion of strata title units (higher than for East Lakes) ... "The Strategy comments under the medium to long term: the remaining parts of Hillsdale centre can also be considered for intensification pending further investigation. Hillsdale already contains a higher density residential development and significant strata title tenure". Under actions, the strategy includes increased residential density potential around Hillsdale/Southpoint (east of Rhodes Street). The subject site is on the eastern side of Rhodes Street although we also note that it is not hatched for investigation as higher density residential. The Strategy also contains a number of actions including increased residential potential around Hillsdale, Southpoint - east of Rhodes Street, and contains LEP and development control considerations with a medium term timing. 49 Mr Hemmings submits that the Botany Bay Planning Strategy 2031, does not refer to the subject site for either the short or medium to long term redevelopment actions of the Plan including actions related to the provision of new dwelling stock. Nor does DCP 35 nor DCP 7 refer to the subject site. 50 As a strategic document the Planning Strategy 2031, provides broad objectives and a vision for Botany Bay local government area and as it states "is only a guide for Council's consideration". In our opinion it cannot be interpreted to provide the same detail as legislation or indeed a statutory planning instrument including a zoning map to a local environmental plan, where each site has a particular zone and controls.

51 Mr Fletcher states that the secondary objective (a) is not relevant as the subject site is not an identified site under the LEP and secondary objectives (d) and (e) are also not relevant.

52 Mr Neustein states that there are only 3 key sites in Hillsdale identified as being of sufficient size for major residential flat development, the subject site and two others in the public sector ownership. Mr Neustein states that "the strata subdivision would artificially preserve the building for possibly 50 years and under current legislation obstruct Council from achieving its required strategic planning targets". He states that the termination of Strata schemes is very difficult and no evidence is provided that this may be achievable in the future. It was submitted on behalf of the applicant that there are proposals to amend the strata title legislation to require only a 75% majority. Mr Fletcher considers that the need to consolidate separate ownerships is a constraint, but is not sufficient reason to deny an otherwise desirable upgrading of the building. Mr Fletcher also considers that it would be unreasonable to retrospectively apply the standards and requirements for new developments to the refurbishment of a building constructed 40 years ago.

53 Mr Fletcher states that the proposal for the strata titling and refurbishment provides a greater return to the current property owner than redevelopment for 76 units. While we agree that this is not a reason to refuse the application before us, at the same time, this factor does not mean the application should be approved and indeed this is not the test in our merits assessment under the Environmental Planning and Assessment Act 1979.

54 Mr Fletcher states that "it is clear that council's preference is for demolition and total redevelopment. However, for that outcome to be achieved the financial feasibility would have to provide a greater return to the property owner than the return from the proposed refurbishment in order for there to be an economic incentive for redevelopment. This is a matter that is entirely within council's control. It has the opportunity to provide a financially viable alternative to the current proposal. However, that is no reason to refuse the current application".

55 However, it is not the role of the council or the Court to provide a financially more viable alternative to the application before it and the application must be assessed on its merits. Furthermore, we are unaware as to whether the applicant has proposed a development of greater density than the 76 units approved in February 2009. The applicant has owned the subject site since December 2009.

56 In our assessment of this application we are guided by the principle established in the authority of Carstens V Pittwater Council (1999) 111 LG ERA 1, where Lloyd J was required to consider whether s 79C(1) was an exhaustive statement of the matters to be considered. His Honor held that it was not, and, in coming to this conclusion, he confirmed that the discretion in s 79C was to be informed and exercised in a manner which promotes the objects of the act. While Carstens was in respect of ecologically sustainable development nonetheless, this authority is relevant to the case before us. ... I concluded that s 79C(1) sets out the matters that must be taken into consideration, but that subsection does not exclude from consideration matters not listed, and which may be of relevance to the particular development application and which further the objects of the Act. That is to say it is not an irrelevant consideration of the decision maker to take into account a matter relating to the objects of the Act. One of those objects is to encourage ecologically sustainable development, (s5(A)(vii)). Moreover, one of the considerations expressly mentioned in s 79C(1) is (e) the 'public interest'. In my opinion it is in the public interest in determining a development application to give effect to the objects of the Act. For these reasons, I do not accept the submission that the Commissioner erred in holding that the principles of ESD must be a factor in the consideration of a development application.

57 In the matter of BGP Properties Pty Ltd v Lake Macquarie City Council, [2004]. NSW LEC 399 the then Chief Judge McClellan respectfully agreed with Lloyd J's conclusion. McClellan CJ also cited Terrace Tower Holdings Pty Ltd V Sutherland Shire Council (2003) 129 LGERA 195, where the Court of Appeal was required to consider the breadth of matters which could be considered under section 79C. Mason P, with whom Speigel CJ and Ipp JA agree, said at LGERA 209-210 In any event, matters relevant to the public interest touching a particular application are not confined to those appearing in published environmental planning instruments, draft or final. Obviously, such instruments carry great weight and at times determinative weight, but they are not the only source of information concerning the public interest in planning matters. The process of making such instruments is described by Beazley, JA in Save the Showground for Sydney IMC V Minister the Urban Affairs and Planning (1997) 95 LGERA 33 at 42 - 44. Nothing in the Environmental Planning and Assessment Act stipulates that environmental planning instruments are the only means of discerning planning policies or the public interest…

58 McClellan, CJ stated, although the weight to be given to any particular matter is for the decision maker to determine, it may be that if a matter of great significance is not given appropriate weight, the decision will be invalid (see Minister for Aboriginal Affairs V Peko - Wallsend Limited (1986) 162CLR 24 at 41).

59 McClellan CJ also states: In the ordinary course whereby zoning land has been identified as generally suitable for a particular purpose, weight must be given to that zoning in the resolution of a dispute as to the appropriate development of any site. The fact that a particular use may be permissible is a neutral factor. 60 In the applicant's Statement of Environmental Effects, three properties are described where the council approved the strata titling. These are: 28 Rhodes, 6 units; 12 Edward, 8 units; and 19 Johnson, 9 units. From the photographs, these would all appear to be Schedule 7 Residential Flat Buildings occupying about two thirds of the land. In our opinion, these relatively small blocks of units that were approved for strata title are distinguishable on the facts to the application before the Court.

61 The subject, residential flat building is clearly in need of refurbishment, given its age of about 50 years. However we do not accept Mr Fletcher's opinion that renovation and refurbishment is the very intent and purpose of the subject development application. The building could be refurbished without the need for a development application. However, we recognise that the additional two units proposed in the application do require development consent and no issue is taken in the regard. The issue remains whether it is appropriate to strata title the 34 units.

62 We agree with Mr Fletcher that the fact that "the building contains units that are smaller in area than contemporary standards does not mean that the building is unsound, unhealthy, obsolescent or inappropriate for continued residential use." However in our assessment it does not follow that strata titling is necessary to achieve this or "to make a positive contribution towards housing choice and housing affordability" as stated by Mr Fletcher.

63 In our assessment we do not agree with Mr Fletcher when he says that in circumstances where total redevelopment is not a financially attractive option that the land subdivision and strata title subdivision should follow. Planning decisions must have regard to the merits of a development application and this includes the public interest and the objects of the Act. In our assessment in the longer term, the public interest is not met by the strata subdivision. Land is clearly a valuable resource, in particular where it is in close proximity to the CBD and where there are opportunities for redevelopment of large sites that can contribute to the overall Metropolitan Strategy objectives of housing. In this case the Eastern Subregion of Sydney with close proximity to employment, amenities and infrastructure. The fact that total redevelopment may not be a financially attractive option in the current economic climate does not mean that the future opportunity for comprehensive redevelopment of the sites should not be considered where the strata title and subdivision would frustrate the achievement of the State's and the council's objectives for accommodating increased housing opportunities in suitable locations. It is not disputed that this is a suitable site. 64 In our assessment, the proposal to strata title the 34 units would not only be inconsistent, but antipathetic to the object of the Act in s 5(a)(ii) "the promotion and co-ordination of the for orderly and economic use and development of the land." Furthermore, in our assessment, the broader public interest would not be served by the strata title and land subdivisions. 65 Clearly it would be a matter for the applicant but the renovation and addition of two units and the refurbishment and landscaping of the site is not objected to and could be carried out. However it does not follow or form justification for the strata title and subdivision of the land.

66 In our assessment, the probability and likelihood of dealing with 34 separate unit entitlement holders would not only frustrate but is likely to circumvent the redevelopment of the site in the foreseeable and longer term future. While we accept the applicant's submission that a partner in a company could also frustrate the timely redevelopment of the site at the same time, it goes without saying that, 34 owners would exponentially make the task that much more difficult. 67 The Torrens Title subdivision is also not supported. Not only in terms of more than one owner making redevelopment less likely, but also the development potential of the current large site would be fragmented and this could result in separate developments of lower densities than could be achieved with a comprehensive integrated redevelopment of the larger site. Even under the current LEP provisions, a site of 2400 square metres and more has the benefit of twice the floor space ratio of smaller sites. The proposal is for Lot 10 with the residential flat building to have an area of 3824 square metres and for Lot 11 it has an area 1811 square metres

68 The role of the Court is not to frustrate development in terms of owner's expectations but at the same time, the Court must have regard to the public interest and the overall planning framework and strategies applicable to land. We accept Mr Hemmings submission that the economic viability of the proposal is not a matter in a merits assessment.

69 The refusal to allow the strata title subdivision does not prevent the refurbishment and it will allow the building to continue to provide a form of housing for which it was originally constructed without denying the opportunity for comprehensive redevelopment, whether that be in the medium or longer term. 70 It was submitted by Mr Hemmings, that the subdivision is permissible with consent and the subject site is not an identified site in terms of the controls and to make it so would be a torturous interpretation. We accept that the subject land is not an identified site but a merits assessment does not lead us to the conclusion that the subdivisions warrant approval. 71 The Court was also referred to other approvals granted by council for strata subdivision and the fact that the controls and guidelines do not prevent the strata subdivision of refurbished blocks of flats. However, in our merit assessment of the proposed subdivisions for this site they do not warrant approval. 72 Mr Hale submits that under Clause 9.2 "Council may grant consent subject to the building complying with all of Councils DCP's and policies current at the time of the application which apply to multi unit residential buildings". However, in our assessment there are competing provisions and the various provisions must be read in context. 73 Amenity of the units would not on its own warrant refusal, however, at the same time, a building that does not meet current standards should not have its life artificially extended by strata titling when this would frustrate its timely redevelopment in an orderly and economic manner consistent with the object of the Act. It was agreed between the experts the design of the residential flat building on the site would not be granted approval today because of deficiencies in design and layout. And in our assessment the continued use of the building is not objected to but at the same time this does not mean the strata title subdivision should be allowed in the circumstances of this case. 74 On receipt of conditions to reflect our findings above, the formal Orders of the Court will be: 1. The appeal in respect of the property known as 24 Rhodes Street Hillsdale is upheld in part only. 2. That part of the development application submitted to Botany Bay City Council being development application no. 10/119 for: (a) alterations to the Residential Flat Building to provide an additional two units, refurbishment, parking and landscaping is granted approval subject to the conditions of consent contained in Annexure "A"; (b) the strata title subdivision and Torrens title subdivision is refused consent. 3 The exhibits except C, D and E are returned to the parties.

      M Ritchie
      Acting Commissioner of the Court

      J S Murrell
      Commissioner of the Court
      DJJ

22/10/2010 - Typographical - Paragraph(s) Paragraphs 1, 38, 44, 56 & 70, & Order 2. 09/11/2010 - Amendment - Paragraph(s) Paragraph 74, Order 2

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