Modog Pty Limited v Leichhardt MC

APPLICANT Mr G. Newport, barrister

LEGAL REPRESENTATIVES: RESPONDENT Mr J. Ailing, SC. Solicitors: Pike Pike and Fenwick

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

11286 of 2005 Modog Pty Limited v Leichhardt Municipal Council

JUDGMENT Introduction 1 This appeal relates to development application No D/2005/428 which is for the partial demolition and alterations and additions to an existing two-storey industrial building comprising conversion to a part three and part four storey residential flat building containing 28 dwellings, with an associated basement car park at 17-25 Beeson Street Leichhardt. Included in the proposal is the retention of an existing single storey dwelling. Strata subdivision of the entire development is also proposed.

2 The irregular shaped site is located on the northern side of Beeson Street at its western end, adjoining a railway reserve to the west, which in turn, adjoins the Hawthorne Canal. It comprises Lots 10 and 11 in DP 13227 and Lot A in DP 314477. It has an area of 2,076 sq m with a frontage to Beeson Street of about 40 m. It generally slopes from the street towards its rear boundary with the highest point of the site being the southeast corner and the lowest point being the northwest corner.

3 Beeson Street is mainly developed with older style single storey dwelling houses although there is a more recent townhouse development at the corner of Tebbutt Street. Adjoining site to the rear in Kegworth Street are the rear yards of eight single storey dwelling houses. The railway line in the adjoining reserve is an infrequently used goods line. The Hawthorne Canal provides for stormwater drainage. Statutory controls 4 The site is zoned Residential under Leichhardt Local Environmental Plan 2000 ("LEP 2000") and residential development is permissible with development consent.

5 The site is not included in a conservation area but is located within the vicinity, (ie opposite) two cottages, which are listed heritage items, and hence, cl 16(7) of LEP 2000 is applicable. This clause requires that an assessment be made as to the effect of the carrying out of the development on the heritage significance of these items and their settings.

6 Clause 19(2) and (3) of LEP 2000 contain applicable development standards comprising a maximum floor space ratio of 0.5:1 and a minimum landscaped area of 40% of the site, 25% of which is to be permeable ground, allowing for deep soil landscaping. The proposal exhibits non-compliances with these standards. Subject to meeting certain tests involving building conversion and adaptation, cl 19(5) enables the setting aside of these development standards. The respondent contends that these tests are not met.

7 In case it was unsuccessful in its contention that cl 19(5) is able to be utilised as sought, objections under State Environmental Planning Policy No1 - Development Standards ("SEPP 1") have been provided in relation to the floor space ratio and landscape area requirements. The respondent contends that these objections should not be upheld.

8 Also applicable to the site is Development Control Plan 2000 ("DCP 2000"). Public notification 9 The application was advertised and 38 submissions objecting to the proposal were received. Matters of concern include the following: + Beeson Street and the site are unsuitable for residential development of this intensity. + The character and amenity of the street will be adversely affected. + The amenity of the proposed dwellings is unsatisfactory especially in relation to private open space, solar access and landscape area. + The proposal will have an adverse impact on the two heritage items opposite the site in Beeson Street. + Existing trees adjacent to the boundaries of the site will be affected by construction activities, resulting in their demise. + Neighbouring dwellings will be adversely affected in terms of overlooking and overshadowing. + Drainage arrangements associated with the proposal are unsatisfactory and will result in the flooding of neighbouring properties. + The proposal will cause traffic congestion in Beeson Street and increased demand for on street parking to the detriment of other residents. + The site is likely to be contaminated.

10 A number of residents gave evidence when the hearing began on site, explaining in some detail their concerns. The evidence 11 On behalf of the applicant expert evidence was provided by: + Mr M. Tooker - civil engineer. + Miss K. Gordon - town planner.

12 On behalf of the respondent expert evidence was provided by: + Mr B Paton - civil engineer. + Miss D Laidlaw - town planner. The issues 13 In essence, according to the Further Amended Statement of Issues (15 pages) the following issues are raised by the proposal: + Whether the proposal can be approved under the provisions of cl 19(5) of LEP 2000 and if not whether the objections under SEPP 1 dealing with the floor space ratio and landscaped area development standards should be upheld. + Whether the proposal would be in public interest and whether the adaptive re-use of the building has any elements of public benefit apart from minor resource conservation. + Whether the proposal has an excessive height, bulk and scale and would thus have an adverse impact on the Beeson Street streetscape. + Whether the proposed dwellings would have adequate amenity in terms of solar access, cross ventilation and railway noise. + Whether the proposal would adversely impact on the amenity of neighbouring dwellings in terms of aural and visual privacy. + Whether the proposal adequately addresses how stormwater and flooding will be managed on and in the vicinity of the site. + Whether the access driveway is satisfactory and whether disabled parking spaces are appropriately located. + Matters of concern raised by the objectors. Building conversion and adaptation 14 As indicated above cl 19(2) and (3) of LEP 2000 contains applicable development standards in relation to floor space ratio and landscaped area. Having a floor space ratio of 1.46:1 compared to the maximum allowable floor space ratio of 0.5:1 and a landscaped area of 12.4% of the site compared to a minimum requirement of 40%, the proposal exhibits significant non-compliances with these standards.

15 Where the adaptive re-use of an existing non-residential building is involved, Cl 19(5) of LEP 2000 allows these development standards to be set aside in certain circumstances, providing that: (5) Building conversion and adaptation Irrespective of sub cl (2) and (3), consent may be granted to alterations to a non-residential building, in the Residential Zone, so as to allow it to be used for a residential use, if the consent authority is satisfied that: (a) the building is substantially retained, which means the building must be structurally capable of conversion without the need for the replacement of most of the structure, and (b) any increase in floor space is contained generally within the envelope of the existing building, and (c) the alteration of the building will meet the ecologically sustainable development objectives and controls of the Plan, and (d) the alterations have been designed with adequate provision for the intended occupants, and those in the vicinity of the site of the proposed development , in terms of amenity , and (e) the appearance of the building, after the alter ations have been carried out, will integrate into and enhance the streetscape, and (f) the alteration of the building will provide useable private outdoor recreation space for, and directly adjoining, each dwelling , and (g) the conversion of the building will provide adequate, accessible and secure car parking spaces and bicycle storage facilities for residents of and visitors to the building, and (h) where the building is a heritage item or in the vicinity of a heritage item or within a conservation area , the conversion of the building meets the heritage objectives and controls of the Plan.

16 Plainly, cl 19(5) recognises the value of non-residential buildings in residential areas and in order to encourage their conversion for residential purposes provides a mechanism and indeed an incentive for this to occur, by relaxing the otherwise applicable floor space ratio and landscape area development standards. Such conversions are the subject of eight fairly stringent tests as described in sub cls (a) - (h).

17 There was no dispute that the existing building is a non-residential building for the purposes of cl 19(5) and that these provisions could be utilised to set aside the above development standards. Nor was there any dispute that the proposal comprises a residential use. However it was argued by the respondent that most of the eight tests, (mainly (a), (b), (d),(f), (e) and (h)) were not met and, because all of these tests must be met, cl 19(5) is not available in relation to this application and hence the development standards must be complied with. Conversion or replacement? 18 Sub-clause (a) of cl 19(5) requires that the building be substantially retained and this means that the building must be structurally capable of conversion without the need for the replacement of most of the structure. According to Miss Gordon this requirement does not mean that the whole building needs to be substantially retained, rather the building must be structurally capable of conversion without the replacement of most of the structure. The building is structurally capable of conversion. She also explained that the phrase most of the structure refers to the structural elements of the building, which comprise: external walls; internal timber columns and beams; and roof trusses. Of these structural elements, by far the largest physical element comprises the external walls. All other elements of the building are non-structural and may be demolished consistent with the test of retaining most of the structure.

19 According to Miss Laidlaw sub cl (a) when read, as it must, in the light of the preamble in cl 19(5) means that the development must involve alterations to a building that is substantially retained. This suggests that the majority of the new works should be dependent on the structure of the original building. In other words the original structure associated with floors, walls and roof should be substantially maintained and that these elements determine the form and configuration of the living spaces created. The term substantially retained means that the majority of the structure should be retained. While cladding such as the existing metal roof could be replaced this should be in substantially the same form as the original. Because the building is to be completely gutted, leaving only the external walls (which are themselves to be altered) this means that the building will not be substantially retained. In this context she carried out a numerical analysis and was able to conclude that the amount of original fabric to be retained was only approximately 15%.

20 I agree that the term alterations can be broadly read, but I have decided that what is here proposed does not meet the requirement that the building be substantially retained. Whilst individual words and phrases need to be considered, cl 19(5)(a) should be interpreted as a whole. The question that thus arises is whether replacement of most of the structure is involved and whether this replacement constitutes alterations to the existing building?

21 In my opinion, in the context of cl 19(5)(a), the word structure refers to how the various parts of the building are integrated to form a whole rather than referring to individual structural elements. Hence, conceptually the words, building and structure when read in their context mean much the same thing.

22 When considering the extent of the building that is to be retained one can consider the difference between structural and non-structural components and perhaps give greater importance to structural elements by comparison with non-structural components that may need to be replaced from time to time. In my opinion in this case the non-structural elements would include the metal roof decking, windows, internal partitioning and the like. Structural elements include masonry walls, concrete and timber floors, columns, trusses joists, rafters and purlins. (See Luna Moon Pty Ltd v Leichhardt Council [2005] NSWLEC 566.). Despite the distinction between structural and non-structural elements, together these elements comprise the building or structure.

23 Whilst there was no suggestion that the building is not structurally capable of conversion, failure to meet the substantially retained requirement cannot be excused if the building is structurally incapable of conversion. For example if parts of the building need to be demolished to meet fire safety requirements.

24 In this context I agree with the approach taken by Miss Laidlaw, and generally accept her calculations regarding the extent of removal of existing structure. I have thus been persuaded that so much of the structure of the existing building will be removed that the building will not be substantially retained. Hence, the cl 19(5)(a) requirement has not been met. Within the envelope? 25 Clause 19(5)(b) requires that any proposal that results in an increase in floorspace must ensure that such additional floor space be contained generally within the envelope of the existing building. The building's envelope is plainly defined by its walls and roof. It is now proposed that the roof of the building be removed and the new structure will project, in parts, up to about three metres (by scale) above the envelope formed by the existing roof. It is also proposed to utilise the area beneath an existing awning and whilst there is some doubt I accept that this awning (given its constructed form) can be assumed to be part of the envelope.

26 According to Miss Gordon the existing building has a floor area of 3,302 sq m and the proposed building has a floor area of 3, 029 square metres. Hence because there is to be no additional floor space, sub-cl (b) means that the requirement to constrain additional floor space within the existing envelope does not arise.

27 Miss Laidlaw did not agree arguing that there is a clear planning intent that the building envelope should be retained and that there should not be significant projections beyond it. Minor projections may be permitted but not to the extent here proposed notwithstanding that the projections will only be able to be viewed within a relatively narrow compass. (i.e. from the west in Beeson Street but little seen from opposite.)

28 Strictly speaking Miss Gordon's contention would appear to be correct and because this proposal does not involve any actual increase in floorspace, sub cl (b) is not technically infringed.

29 However to understand its purpose cl 19(5)(b) should be read as a whole and any changes to the floorspace should be considered as part of the alterations to the existing building rather than an extension of it. (Incidentally, when considering an increase in floorspace in the light of the requirement in sub cl (b) that it be within the envelope, the three-dimensional aspect of that floorspace should be considered.) In most circumstances there would be little doubt that the proposed projections beyond the building envelope would fall within a general categorisation of alterations and additions to an existing building rather than just alterations. Despite sub cl (b) not being applicable I nevertheless agree with Miss Laidlaw that the likely intent of this clause is to generally maintain the existing building envelope and this intent is significantly infringed by the proposal. The appropriateness of the extension of the building beyond its existing envelope can of course be considered on its merits.

30 The remaining aspects of cl 19(5) deal with: ecologically sustainable development; internal and neighbour amenity; private open space; streetscape; car parking and storage; and heritage. Of these matters Miss Laidlaw argued that sub cl (d), (e), (f) and (h) were not complied with.

31 Subclause (d) requires that the development should be designed with adequate provision for internal amenity; relevantly here in relation to solar access. The two town planners agreed that less than half (11 of 26) of all dwellings in the proposed development achieve an acceptable level of solar access. Miss Gordon calculated that 65% of the dwellings achieve two or more hours of sunlight to their living rooms at midwinter with a further 8% achieving 1.5 hours. Also 65% of the dwellings achieve three hours of solar access to their private open space at midwinter with a further 27% achieving 1.5 hours. Whilst she acknowledged that this solar access does not relate to 50% of the area of the windows of the living areas or the private open space, the areas in sunshine are adequate to achieve a reasonable level of amenity.

32 Miss Laidlaw also noted that seven dwellings and one balcony had minimal/inadequate solar access. Notwithstanding that one would not strictly enforce the solar access standards that would normally apply under the DCP for an adaptive re-use proposal, the Residential Flat Code requirement that 70% of dwellings should meet the three-hour standard is a relevant consideration. The proposal is not assisted by the fact that the communal open space (circulation space/light well) would not receive any solar access in midwinter.

33 Miss Laidlaw was also concerned that some of the dwellings would have inadequate ventilation and daylight particularly the ground and first floor units that are generally much deeper in floor plan than is desirable. However Miss Gordon explained that, taking into account the corner and two-storey dwellings and the use of clerestory and highlight windows, all of the dwellings will achieve an appropriate level of natural ventilation. In this regard for the reasons she has given I accept the evidence of Miss Gordon, although given the depth of some of the dwellings the resulting limited access to daylight is of some concern.

34 Miss Gordon and Miss Laidlaw disagreed as to whether the proposal will have acceptable privacy impacts on neighbouring properties. Miss Gordon explained that the use of privacy screens will provide a higher level of privacy to adjoining properties than would currently be enjoyed given the existing windows in the factory walls.

35 Miss Laidlaw acknowledged the use of privacy screens but contended that this was an inappropriate and makeshift design solution that results from a fundamentally inappropriate form of development in this location. She also pointed out (as did one neighbour) that the factory building only operated during weekday business hours and that any resultant privacy impacts was not an issue by comparison with the proposed residential use of the building that would be more intense at nights and weekends.

36 Having considered the shadow diagrams and taking also into account the affect of fences and privacy screens I agree with Miss Laidlaw that because less than 45% of the dwellings will have acceptable solar access the standard of amenity will be unsatisfactory despite this being an adaptive re-use proposal. Moreover, I also agree with Miss Laidlaw regarding daylight access and that the extent of use of privacy screens to protect neighbour amenity would not be consistent with the principle referred to in GPC No 5 (Wombarra) Pty Ltd v Wollongong City Council [2003] NSWLEC 268.

37 In these circumstances I thus conclude that the alterations have not been designed to provide a satisfactory amenity for the intended occupants of the development and its neighbors. Hence cl 19(5)(d) is not met. Enhance the streetscape? 38 In relation to sub cl (e) that the altered building should integrate into and enhance the streetscape Miss Gordon noted that the majority of the new development was within the existing envelope and, given the replacement of the eastern portion of the building that has a streetscape presentation, this results in a significant reduction in building bulk.

39 Miss Laidlaw was of the opinion that the projection of new works outside the original envelope would be inappropriate. She acknowledged the benefit of retaining the architectural language of the original industrial building but to properly do this the existing roof form should be retained. The protrusion of a new flat roof element that is higher and bulkier than the original is inappropriate and will fundamentally change the character of the building and will be of the scale that is incongruous in this low-density residential area. In reaching this conclusion she acknowledged that the extension will be little seen from directly opposite but given the streetscape context, particularly given its height in comparison to surrounding development, the extended building will be conspicuous from a number of viewpoints in Beeson Street to the east.

40 In my opinion the proposal will improve the present poor aesthetics of the existing building to the benefit of the Beeson Street streetscape although this will be counterbalanced by the increased apparent bulk that will be obvious when viewing the building from the east. I agree with the concerns that the proposal will remove the existing roof and provide a structure having a different form that extends past the existing envelope, adding to its apparel bulk and scale. The streetscape will thus be adversely affected especially taking into account the existing low scale character of Beesen Street. Hence sub cl (e) is not met. Satisfactory private open space? 41 In relation to the private outdoor recreation space requirement in sub cl (f), Miss Gordon pointed out that each dwelling would have directly adjoining private open space. Whilst some of these spaces have a limited degree of "openness" this is a direct result of the nature of non-residential building conversions and is compensated for by the size of the spaces provided.

42 Miss Laidlaw disagreed, explaining concerned that the balconies were little more than "rooms", taking into account the retained external walls and the privacy screens and the fact that three courtyards are fully roofed.

43 I agree that many of the proposed courtyards will have poor amenity as a result of their lack of openness or outlook. Despite the courtyards having an appropriately adjoining relationship to the dwellings they will be less usable than might have been the case if they had an appropriate level of amenity. On balance and despite taking into account the extent to which this is an adaptive re-use I conclude that the requirement of sub cl (f) is not met. Protection of heritage significance? 44 Sub clause (h) in this instance requires that the conversion of the building should meet the heritage objectives and controls of LEP 2000. These objectives relevantly involve the protection, conservation and enhancement of the heritage significance of the two heritage items opposite the site. Miss Laidlaw, for reasons similar to those argued in relation to streetscape contended that these objectives were not met.

45 Miss Gordon had a contrary opinion, explaining that little of the extended building would be seen from the heritage items and that the renovation of the building in terms of its presentation to the street and especially towards the heritage items would be of benefit. More particularly, the provision of more uniform openings in the street facade and the stone facing at ground level would visually break the bulk of the building and is improve its presentation.

46 In relation to the heritage question I agree with Miss Gordon for the reasons she has given and accept that sub clause (h) is not infringed. Conclusion - clause 19(5) 47 Because it has failed to meet the threshold tests in cl 19(5)(a), (d), (e) and (f) of LEP 2000, the application is therefore required to comply with the floor space ratio and landscaped area development standards in cl 19(2) and (3). As indicated above Miss Gordon has prepared objections under SEPP 1 because these standards are not met. The SEPP 1 objections 48 According to the SEPP 1 objections that deal with floor space ratio and landscaped area there are no specific objectives in LEP 2000 for these development standards. However cl 17 contains objectives for the development of housing, which provide that the density and landscaped areas of new housing are to be complimentary to and compatible with the style, orientation and pattern of surrounding buildings. Also a diverse range of housing in terms of size, type, form, layout, location, affordability and adaptability is to be provided. Other objectives in cl 13 deal with the built environment seeking to ensure that the buildings are designed so as to be compatible with the character, form and scale of the area. Floor space ratio 49 The SEPP 1 objection dealing with the floor space ratio development standard argues that the non-compliance can be justified because, by prolonging the lifespan of the building, conversions of this kind are appropriate from an ecologically sustainable perspective. Also the proposal results in a reduction of the floor space ratio of the existing building and reduces its visual bulk when viewed from the street. This aspect is further improved taking into account the increased separation from the dwelling at No 17 and the improvements to the facade of the building. Also, the retention of the existing building allows for the maintenance of a sense of history and character within the area as created by the history of mixed uses. The proposed adaptive re-use provides a higher density form of housing, introducing a range of apartment types with a good level of amenity, thus increasing choices of accommodation in this locality. Also the site is well located for a high-density form of development given its proximity to public transport, shops and services.

50 Miss Laidlaw did not support the floor space ratio objection. She accepted the relevance of the above-mentioned objectives and added the fairly common objectives of visual bulk and control of intensity of land use together with the desired future character requirements in DCP 2000. In relation to the desired future character objectives, Leichhardt has a low scale character and the existing building is inconsistent with this, notwithstanding that the planning controls recognise the existence of industrial buildings of this kind in residential areas. Particularly taking into account the built form projections above the existing building envelope that increase the incompatibility, the building will present as a residential flat building more so than a converted industrial building. Given that the entire interior and roof are to be removed there is no real reason for the concession sought. Landscaped area 51 The SEPP 1 objection dealing with the landscaped area development standard identifies similar objectives to those referred to in the floor space ratio objection, together with the objectives associated with tree planting and resident's enjoyment. It explains that even though the development standard is not met there will be a significant increase in the provision of landscaped area. The landscaped central courtyard will benefit residents as will the tree planting that is to occur in the northeast corner of the site. This will also benefit neighbours by softening the building's appearance. Given the adaptive re-use of the existing building as sought by LEP 2000 the landscaped area provision is appropriate. Importantly, the provision of 40% of the site as landscaped area concurrently with the retention of the building would not be economically viable.

52 Miss Laidlaw also did not support the landscaped area objection. She explained that the proposed landscaped areas make only a small concession to the objectives. Also given the change from an industrial use to residential use, the increase in landscaped area is not a significant improvement, and the central courtyard is little more than a light well and does not provide a quality communal landscaped area. Despite this, whilst she did not believe that strict compliance with the standard was required the landscaped area provision is unsatisfactory. Conclusions - SEPP 1 objections 53 Whilst the proposal comprises a form of adaptive re-use it is not in the form anticipated by cl 19(5) of LEP 2000, which provides the mechanism for the non-compliance with the floor space ratio and landscaped area development standards. Hence these standards must be given weight as such. Notwithstanding this, and in the context of the SEPP 1 objections, some weight can be given to the adaptive re-use given that adaptability is one objective of LEP 2000. Also, cl 19(5) has an underlying objective of encouraging the adaptive re-use of buildings such as this. In addition some weight can be given to the architectural improvements to the building that provide some benefits to the streetscape and to the heritage items opposite, taking into account its present dilapidated state.

54 However these matters are not sufficient to set aside the effect of the buildings' increased bulk, particularly taking into account the built form projections above the existing roof, and the minimal landscaped areas provided. It would thus not be complimentary to the character and pattern of surrounding development. In this regard I find Miss Laidlaw's evidence persuasive. As a consequence and notwithstanding that the proposal will add to the diversity of housing in this locality it would not meet the objectives of LEP 2000 in relation to character form and scale.

55 Whilst there is no restriction in SEPP 1 as to the extent to which a development standard can be varied, taking into account that the proposal is not the kind of conversion anticipated by cl 19(5) I have reached the conclusion that the non-compliances here proposed are excessive and unjustified despite the fact that there would be some public benefit in allowing the proposal to proceed. I thus conclude that the objections are not well founded and that the extent of the non-compliances is unreasonable.

56 Notwithstanding this, in other circumstances where a building conversion fails to meet the requirements of cl 19(5) but is otherwise, on its merits satisfactory, it may be that strict compliance with the development standards would be unreasonable or unnecessary. Conclusions 57 The two town planners agreed that there are benefits involving the adaptive re-use of buildings, where such reuse is responsive to the objectives of LEP 2000 and DCP 2000, including providing visual reminders of the evolution of land use and ecologically sustainable benefits. However in this case such benefits are not sufficient to overcome the proposal's fundamental flaws.

58 For essentially the reasons that have resulted in the proposal not meeting the tests in cl 19(5)(d), (e) and (f) I have decided that the amenity of many of the proposed dwellings would be unsatisfactory.

59 The considerable non-compliances with the floor space ratio and landscaped area standards and the failure of the development to sufficiently meet the applicable objectives results in the unacceptability of the objections notwithstanding that some objectives are met. Taking also into account the adverse merit considerations these matters are such that the standards should not be set aside notwithstanding the benefits that would result from adaptive re-use, including the improved presentation of the existing building. Because the SEPP 1 objections are not upheld, the development application must be refused.

60 Finally, given my decision that the appeal should be dismissed it is unnecessary to deal with the issues that arose in relation to the without prejudice conditions of consent. Orders 61 The orders of the Court are therefore: 1. The appeal is dismissed.

2. Development Application No D/2005/428 for the partial demolition and alterations and additions to the existing two-storey industrial building, comprising its conversion to a part three and part four storey residential flat building containing 28 dwellings with an associated basement car park and the utilization of an existing dwelling house at 17-25 Beeson Street Leichhardt is determined by the refusal of development consent.

      T A Bly
      Commissioner of the Court
      ljr

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.