Mulpha Norwest Pty Ltd v The Hills Shire Council [2020] NSWLEC 7 | Case summary

Land and Environment Court (NSW)|2020-02-10|Before: Pepper J

Solicitors: Addisons (Applicant) Marsdens (Respondent) File Number(s): 2019/317942

Mulpha Norwest Seeks the Determination of a Separate Question

By notice of motion filed on 17 January 2020, the applicant in a Class 1 appeal (commenced on 11 October 2019), Mulpha Norwest Pty Ltd ("Mulpha Norwest"), seeks an order that the following question be determined by a judge of the Court prior to and separate from the hearing of the balance of the issues in these proceedings: Whether, on the proper construction of cls 4.4, 4.5 and 7.12 of The Hills Local Environment Plan 2012, the floor space ratio of the building on the site must be calculated separately for the land within Area A from the remainder of the site.
This question was not the original question sought to be separately determined. The original question raised, as framed, a question of fact, or at the very least, a question of mixed fact and law that had the potential to require expert evidence for its determination. It is fair to say that its prospects of being ordered for separate determination were, in these circumstances, limited.
The respondent to the Class 1 appeal (and the motion), The Hills Shire Council ("the Council"), does not oppose the application. On the contrary, it supports it.
In support of the application, Mulpha Norwest relied upon an affidavit of Mr Leon Batchelor affirmed 17 January 2020 ("the Batchelor affidavit"). Apart from setting out the factual background to the motion and the matters agreed upon by the parties relevant to the application, the Batchelor affidavit largely comprised material quoted from The Hills Local Environmental Plan 2012 ("the LEP") and legal submissions. Neither have any place in an affidavit. Much of the affidavit was consequently not read by counsel for Mulpha Norwest. Furthermore, exhibited to the affidavit was documentary material which consisted of legal advices from various counsel, correspondence between the parties in furious agreement about the need for a separate question, the refused development application no 1573/2018/JP ("DA"), and a Statement of Environmental Effects Residential Flat Building dated 18 December 2018 (which alone was 142 pages). Almost all of the material was either not relevant or not relied upon, and the Court was taken to none of it.

Mulpha Norwest Proposed to Build a 23 Storey Apartment Building

The DA, as amended, relates to a proposed development for a 23 storey residential flat building containing 131 units, ground floor and basement car parking and loading, at 2-6 Maitland Place and 40 Solent Circuit, Norwest ("the site").
The site is comprised of the whole of one and part of another registered lot: 1. first, 2-6 Maitland Place, Norwest, which comprises the whole of Lot 22 DP 1034506 ("Lot 22"); and 2. second, 40 Solent Circuit, Norwest, which comprises part of Lot 2105 DP 1201899 ("part Lot 2105").
The site has been approved to be consolidated into a single lot, namely, Lot 221 in the subdivision of Lot 22 and part Lot 2105 pursuant to development consent 504/2018/ZA, granted by the Council on 27 November 2017 ("Lot 221"), shown on the map below. The plan of subdivision creating Lot 221 is unregistered.
The site has an area of 4,998 m2. Lot 22 has an area of 2,649 m2 and part Lot 2105 has an area of 2,349 m2.

The Zoning and Floor Space Ratio Controls Applying to the Site

The site is zoned R4 High Density Residential under the LEP. Development for the purposes of a residential flat building is permitted in the R4 Zone.
Clause 4.4(2) of the LEP provides that: The maximum floor space ratio for a building on any land is not to exceed the floor space ratio shown for the land on the Floor Space Ratio Map.
Clause 4.5(1) to (6) of the LEP state as follows: 4.5 Calculation of floor space ratio and site area (1) Objectives The objectives of this clause are as follows - (a) to define floor space ratio, (b) to set out rules for the calculation of the site area of development for the purpose of applying permitted floor space ratios, including rules to - (i) prevent the inclusion in the site area of an area that has no significant development being carried out on it, and (ii) prevent the inclusion in the site area of an area that has already been included as part of a site area to maximise floor space area in another building, and (iii) require community land and public places to be dealt with separately. (2) Definition of "floor space ratio" The floor space ratio of buildings on a site is the ratio of the gross floor area of all buildings within the site to the site area. (3) Site area In determining the site area of proposed development for the purpose of applying a floor space ratio, the site area is taken to be - (a) if the proposed development is to be carried out on only one lot, the area of that lot, or (b) if the proposed development is to be carried out on 2 or more lots, the area of any lot on which the development is proposed to be carried out that has at least one common boundary with another lot on which the development is being carried out. In addition, subclauses (4)-(7) apply to the calculation of site area for the purposes of applying a floor space ratio to proposed development (4) Exclusions from site area The following land must be excluded from the site area - (a) land on which the proposed development is prohibited, whether under this Plan or any other law, (b) community land or a public place (except as provided by subclause (7)). (5) Strata subdivisions The area of a lot that is wholly or partly on top of another or others in a strata subdivision is to be included in the calculation of the site area only to the extent that it does not overlap with another lot already included in the site area calculation. (6) Only significant development to be included The site area for proposed development must not include a lot additional to a lot or lots on which the development is being carried out unless the proposed development includes significant development on that additional lot.
Pursuant to the Floor Space Ratio Map FSR_016 ("Floor Space Ratio Map"), a maximum floor space ratio ("FSR") of 1:1 applies to the portion of the site currently comprising Lot 22. It is also identified on the Floor Space Ratio Map as "Area A".
The Floor Space Ratio Map shows the whole of Lot 2105 as uncoloured, which means that no FSR development standard applies to the portion of the site comprising part Lot 2105.
The proposed building has a total gross floor area ("GFA"), as defined in the LEP, of 14,903 m2.
The GFA of the proposed building is located exclusively on that part of the site within Lot 22.
The proposed building's loading dock, basement, ground floor car parking and landscaped podium do not include any calculable GFA and are located on the part of the site comprising part Lot 2105.
Clause 7.12 of the LEP contains additional provisions for Area A land. That cl relevantly provides as follows: 7.12 Development on certain land within the Sydney Metro Northwest Urban Renewal Corridor (1) The objectives of this clause are as follows: (a) to support the provision of increased housing around train stations forming part of the Sydney Metro Northwest at densities compatible with the future character of the surrounding area, (b) to ensure the provision of a mix of dwelling types in residential flat buildings, providing housing choice for different demographics, living needs and household budgets, (c) to promote development that accommodates the needs of larger households, consistent with the demographics and family household structures of The Hills Shire. (2) This clause applies to development that involves the erection of one or more buildings that contain dwellings on land identified as "Area A" on the Floor Space Ratio Map. (3) Despite clause 4.4, the consent authority may consent to development on land to which this clause applies with a floor space ratio that does not exceed the increased floor space ratio identified on the Floor Space Ratio Incentive Map, if the consent authority is satisfied that: (a) no more than 25% of the total number of dwellings (to the nearest whole number of dwellings) contained in the development are to be studio or 1 bedroom dwellings, or both, and (b) at least 20% of the total number of dwellings (to the nearest whole number of dwellings) contained in the development are to be 3 or more bedroom dwellings, and (c) at least 40% of all 2 bedroom dwellings contained in the development will have a minimum internal floor area of 110m2, and (d) at least 40% of all 3 bedroom dwellings contained in the development will have a minimum internal floor area of 135m2, and (e) the following minimum number of car parking spaces are to be provided for the development: (i) for each dwelling - 1 car parking space, and (ii) for every 5 dwellings - 1 car parking space, in addition to the car parking space required for the individual dwelling.
It was not a matter of controversy that cl 4.6 of the LEP, allowing for exceptions to development standards, does not allow development consent to be granted for development that would contravene cl 7.12 (see cl 4.6(8)(cb) of the LEP).
The Council is satisfied that the specific requirements in paragraphs (a)-(e) of cl 7.12(3) of the LEP are met by the proposed development.
The effect of cl 7.12 of the LEP is that the land within Area A comprising Lot 22 has an increased maximum FSR of 3.0:1.

The Calculation of the Floor Space Ratio

Clause 4.5 of the LEP specifies the method of calculating the FSR and "site area". As the site comprises unregistered Lot 221 in the approved subdivision of Lot 22 and part Lot 2105, the site area is taken to be the area of that lot in accordance with cl 4.5(3)(a) of the LEP.
Alternatively, if by reason of the lots being unregistered the site is taken to be comprised of two lots, the site area is determined according to cl 4.5(3)(b) of the LEP.
No land is required to be excluded from the site area pursuant to cl 4.5(4) and (5) of the LEP.
The site area includes lots on which significant development is being carried out within the meaning of cl 4.5(6) of the LEP, albeit that development on part Lot 2105 does not include GFA.
It was agreed by the parties that cl 4.5(7) - (11) of the LEP are not relevant to the calculation of site area in the present appeal.

How the Separate Legal Question Arises

As put by the Council, the dispute between the parties arises from the interrelationship between cls 4.4 and 7.12 of the LEP on the one hand, and cl 4.5 on the other, the latter of which defines "floor space area" and "site area".
Mulpha Norwest submits that pursuant to the LEP Lot 22 has a base FSR of 1:1 (cl 4.4(2)). Lot 22 is mapped as Area A, where an FSR of 3.0:1 applies, subject to conditions (cl 7.12(3)). Part lot 2105 is not the subject of an FSR control and is not mapped as Area A on the Floor Space Ratio Map. Therefore, upon a proper construction of the LEP the proposed development has a FSR that does not exceed 3.0:1.
Mulpha Norwest submits that the FSR must be determined in accordance with the definition of "floor space ratio" contained in cl 4.5 of the LEP and that, therefore, the FSR of buildings on a site is the ratio of the GFA of all buildings within that site to the "site area" (as that term is defined). The site area is the combined area of Lot 22 and part Lot 2105, and accordingly, the FSR of the proposed development is 2.98:1 across the site. Thus, development on Lot 22 does not exceed 3.0:1 and the development is compliant with cl 7.12(3) of the LEP.
By contrast, while the definition of "site area" in cl 4.5 states that the site area is to include the whole of the site, the Council contends that the FSR is governed by the operative provisions, namely, cls 4.4, 7.12 and the Floor Space Ratio Incentive Map (see cl 7.12(3)), which set a maximum FSR for the land on that Map. The fact that the subject site may extend to other land does not permit the FSR for the building on the land in Area A to exceed the FSR shown on the Floor Space Ratio Incentive Map by including the other land within the "site area", notwithstanding the definition of that term. In other words, where land is the subject of two separate FSR controls, a separate calculation of FSR is necessary for each part of the site having a different FSR control notwithstanding that the definition of "site area" in cl 4.5 of the LEP seemingly includes the whole site.
The Council submits that it is necessary to read the definition of "site area" to mean that part of the site within the land on the Floor Space Ratio Map, because the operative prohibition contained in cl 4.4 precludes more than the specified amount of FSR on that land shown on the Floor Space Ratio Incentive Map.
In this case, the land at 40 Solent Circuit is not identified on the Floor Space Ratio Map as being within Area A and is not subject to the FSR incentive of 3.0:1. The Council argues that the area of 40 Solent Circuit must therefore be excluded from the site area for the purpose of calculating the FSR, and moreover, that the part of the subject site affected by a FSR limit requires a separate FSR calculation. In addition, the amount of GFA that may be carried out on that part of the site comprising 40 Solent Circuit is unlimited.
In summary, the proposed building has an FSR of 2.98:1:1 and complies with cls 4.4 and 7.12 of the LEP if the calculation of FSR includes the whole of proposed Lot 221. However, the proposed building has an FSR of 5.628:1 and does not comply with cls 4.4 and 7.12 of the LEP if the calculation of FSR is confined to the area of the site within Area A.
It is this tension that gives rise to the separate question of law articulated in the amended notice of motion.

The Separate Question Should be Ordered

The power to order a separate question is contained in r 28.2 of the Uniform Civil Procedure Rules 2005 ("UCPR"): 28.2 Order for decision The court may make orders for the decision of any question separately from any other question, whether before, at or after any trial or further trial in the proceedings.
The principles to be applied in the exercise of the Court's discretion to order the determination of a separate question have been stated in Royal Motor Yacht Club (Broken Bay) New South Wales Pty Ltd v Northern Beaches Council ([2016] NSWLEC 87), referring to 820 Cawdor Road Pty Ltd v Wollondilly Shire Council ([2013] NSWLEC 8; (2013) 195 LGERA 170).
The relevant authorities and principles were most recently reiterated, summarised, and applied by the Court in Johnson Property Group Pty Limited v Lake Macquarie City Council [2020] NSWLEC 4 (at [45]-[47]), which is relied upon without repetition in this application.
Having regard to those principles, the Court agrees with the parties that the separate question should be ordered. This is because (primarily as the Council submitted): 1. first, the permissibility of the proposed development is a determinative threshold question. If the separate question is resolved in the Council's favour it will be wholly dispositive of the appeal. This is because the Court will not possess the power to consent to the DA irrespective of the other merit contentions raised in the Council's Statement of Facts and Contentions; 2. second, even if not entirely dispositive of the appeal because it is resolved in Mulpha Norwest's favour, its determination will nevertheless reduce the issues in dispute, thereby facilitating the just, quick and cheap resolution of the proceedings (see s 56 of the Civil Procedure Act 2005). This is because largely only merit issues concerning design would remain which should render the appeal more attractive to resolution absent the need for a final contested hearing; 3. third, the Council's Statement of Facts and Contentions raises contentions involving expertise in the disciplines of planning and urban design. The proceedings are currently listed for a conciliation conference on 23 July 2020. If the proceedings progressed to a conciliation, and thereafter to a hearing, absent the separate determination of the question above, it is likely that experts in each of these disciplines will be required to prepare for, and attend, the conciliation conference, prepare individual or joint expert reports, and attend a hearing to provide oral expert evidence on behalf of the parties. The preparation of expert evidence in these disciplines will involve significant expenditure by the parties would be wasted if the separate question were decided in the Council's favour; 4. fourth, the separate question will not require the preparation of any expert evidence or other voluminous evidence in aide of its determination; 5. fifth, the documentary evidence necessary to determine the question is not contentious and the underlying facts are largely agreed; 6. sixth, the conciliation conference is not imminent and even if the separate question were determined in favour of Mulpha Norwest, there is sufficient time to accommodate the parties' preparation for the conciliation conference and any subsequent hearing of the appeal; and 7. finally, the separate question is likely to have significant precedential value. The issue of whether or not the FSR standard is met upon the proper construction of cl 4.5 has arisen in other proceedings but has not been resolved because of the availability of cl 4.6 (which is not, as discussed above, available in this appeal) (see, for example, Eunomia Development Pty Limited v Sydney City Council [2016] NSWLEC 1342 at [29]-[30] and [43]-[44]).

Orders

The orders of the Court are therefore that: 1. pursuant to r 28.2 of the UCPR the following question is to be determined separately from any other question in the proceedings: Whether, on the proper construction of cls 4.4, 4.5 and 7.12 of The Hills Local Environment Plan 2012, the floor space ratio of the building on the site must be calculated separately for the land within Area A from the remainder of the site. 1. the matter is listed before the Registrar on 14 February 2020, for the allocation of a hearing date of the separate question; 2. the parties are to file and serve a statement of agreed facts three weeks before the hearing of the separate question; 3. the parties are to file and serve an agreed bundle of documents and all other evidence upon which they seek to rely three weeks before the hearing of the separate question; 4. the applicant is to file and serve an outline of its submissions two weeks before the hearing of the separate question; 5. the respondent is to file and serve an outline of its submissions one week before the hearing of the separate question; and 6. the exhibits are to be returned.

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 February 2020

(2013) 195 LGERA 170

Mulpha Norwest Pty Ltd v The Hills Shire Council

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