Pallas Development Management Pty Limited trading as Fortis Development Group v Woollahra Municipal Council

The Council's position concerning the requests

1. Whilst the Council doesn't disagree with respect to what can be considered in informing the desired future character of an area, it submits that there are some unique factors about the circumstances in the decision in SJD DB2 that mean that it is not readily applicable to the proposed development. In the development considered in the decision under appeal in SJD DB2, the Commissioner determined that the development standards had been abandoned for that block on the southern side of Cross Street (SJD DB2 Pty Ltd v Woollahra Municipal Council [2020] NSWLEC 1112 at [94]). The Commissioner found that the additional height and FSR was justified in order to achieve consistency with the character of the developments along that southern side of Cross Street that had been previously approved by the Council. In the context of this proposed development, the Council points out that different development standards apply and this site is outside the block to which the abandonment was confined.
2. The Council's position is that there is a different character on each side of Bay Street (south) when having regard to the approvals that have been granted, the existing buildings and the existence of the character buildings. In addition, the desired future character is also informed by the controls in the WDCP, which 'fill in' the character of the built form within the maximums set by the height and FSR development standards. In this context, the Council's position is that the proposed development is not consistent with the desired future character on the eastern side of Bay Street and is not consistent with the desired future character expressed in the street wall heights for both Bay Street and Gumtree Lane.
3. The Council's position is that consistency with the desired future character is not made out by the evidence or by the written requests, and that the written requests neither establish sufficient environmental planning grounds to justify the contraventions, nor establish that compliance is unreasonable or unnecessary. For those reasons, the Council says that there is no power to grant development consent and the development application should be refused.
4. Specifically, the Council says that the grounds outlined in the written requests do not justify the contravention of the standard, as there is no uniform streetscape for which the additional height and FSR is required to achieve consistency, and the written requests do not provide any examination of the neighbourhood and the surrounding built form. The Council says that the provision of additional commercial space is not an environmental planning ground that justifies the exceedance, as that is an argument that is available on any exceedance of gross floor area. Further, the Council submits that the argument that compliance would not be an efficient use of the site is not actually established by any supporting information in the written requests.
5. Similarly, the Council's position is that the written request does not establish that compliance is unreasonable or unnecessary. The Council says that the written requests do not provide an analysis of the "desired future character of the neighbourhood", which is an objective of the height development standard, or of the "desired future character of the area in terms of bulk and scale", which is the objective of the FSR development standard. Accordingly, the Council says that the written request does not establish that the additional height and FSR achieves these objectives. Further, the Council submits that the written request on the height development standard does not establish how the objective to "minimise the impacts of new development on adjoining or nearby properties from disruption of views, loss of privacy, overshadowing or visual intrusion" has been met.

The written requests do not demonstrate sufficient environmental planning grounds

1. I am not satisfied that either of the written requests demonstrate sufficient environmental grounds to justify the contravention of each of the standards. In Initial Action Pty Ltd v Woollahra Municipal Council (2018) 236 LGERA 256; [2018] NSWLEC 118 at [24], Preston CJ of LEC stated that the "focus of cl 4.6(3)(b) is on the aspect or element of the development that contravenes the development standard, not on the development as a whole, and why that contravention is justified on environmental planning grounds".
2. In Gan v City of Sydney Council [2021] NSWLEC 1370, I set out three elements for consideration in determining whether I am satisfied that there are sufficient environmental planning grounds. At [84], I described those elements as follows: "Firstly, the grounds advanced must constitute "environmental planning grounds". Secondly, they must be tethered in some way to the breach of the development standard so as to justify, or inform, the breach. Thirdly, I must be satisfied that they are "sufficient" to justify, or inform, the aspect or element that contravenes the development standard."
3. Further, in Four2Five Pty Ltd v Ashfield Council [2015] NSWLEC 1009 at [60], the Commissioner found that the grounds need to be "particular to the circumstances of this proposed development on [the] site". This finding was not disturbed on appeal (see Four2Five Pty Ltd v Ashfield Council [2015] NSWLEC 90 and Four2Five Pty Ltd v Ashfield Council [2015] NSWCA 248).
4. For each of the written requests, I am not satisfied that the grounds advanced actually justify, or inform, the breach, or that they are sufficient to justify the additional height and floor space.

The written request concerning the breach of the height development standard

1. The whole of the fifth storey extends above the height development standard, although the proposed finished floor level of that storey is within the standard. The greatest contravention is 3.4m at the louvred plant area, but this reduces to 2.59m at the maximum height of the parapet, and the remaining extent of the contravention varies due to the topography of the site. The additional height above the development standard accommodates both the fifth storey and the plant room. For the reasons expressed below, none of the grounds advanced in the written request are sufficient to justify the contravention of the height development standard.

The commercial use ground

1. The first ground relied upon in the written request is titled "commercial use". As set out above, it refers to responding to a recognised demand for commercial floor space which is reflected in the objectives of the zone, requiring increased floor to ceiling heights and wide floor plates to attract high profile tenants. The request states that enforcing strict compliance will require the removal of an entire level, which would result in the loss of 490m2 of commercial space, which is an "inefficient" use of the site.
2. Whilst the provision of additional commercial floor space is a benefit of the breach of both the height and FSR development standards, I do not accept that the provision of additional floor space for one type of planning use, of itself, constitutes an environmental planning ground. It is a benefit that can be brought about by any breach of a development standard by any commercial development in the zone, and is not particular to the circumstances of the proposed development on this site. I accept the submission of the Council that such an argument is available on any exceedance of gross floor area (and associated additional height) for a commercial development, and it is not sufficient to justify a contravention on this site.
3. Further, the additional floor to ceiling heights do not account for the entire height exceedance, and, whilst the necessity for higher floor to ceiling heights for commercial developments would constitute an environmental planning ground, it is insufficient to justify the extent of the contravention of the height development standard. The same can be said about the plant and equipment, which accounts for some additional height but it is not sufficient to justify the contravention.
4. Whilst the request states that enforcing strict compliance with the height development standard and consequent removal of 490m2 of commercial space would be "an inefficient use of the site", there is no information to support that assertion. Accordingly, based on the written request, I cannot conclude that the contravention of the height development standard leads to efficiency of the use of the site.
5. For those reasons, the "commercial use" ground is insufficient to justify the contravention of the height development standard.

The consistency ground

1. The request also advances consistency with context and desired future character as an environmental planning ground, stating that the building will present a similar bulk and scale to its surrounds, and a five-storey development is consistent with the context.
2. Achieving consistency in the streetscape is an accepted environmental planning ground (see Gejo Pty Ltd v Canterbury-Bankstown Council [2017] NSWLEC 1712 (Gejo) at [45]; Abrams v Council of the City of Sydney [2019] NSWLEC 1583 (Abrams) at [47]-[49]; and SJD DB2 Pty Ltd v Woollahra Municipal Council [2020] NSWLEC 1112 at [90])
3. However, in the circumstances of the proposed development, this environmental planning ground is not sufficient to justify the exceedance of the height development standard. There is no five-storey building on the eastern side of Bay Street within this block with which the proposed development could be said to be consistent. The request does not provide any analysis of how the fifth storey (the additional height) is justified in order to achieve consistency in its context. The reliance, in the written request, on the height of approved buildings elsewhere in the local centre, absent an analysis of the immediate built form context of the subject site, is not sufficient to establish that the additional height is justified to achieve consistency with the context. Although there are streetscape renders elsewhere in the request, there is no accompanying information that establishes that the additional height is justified to achieve consistency in the streetscape context. If anything, the streetscape renders demonstrate that the additional height is not consistent with the Bay Street streetscape context, particularly given the two storey character buildings located immediately adjacent.
4. In the written request, this consistency ground also refers to the desired future character in brackets, and relies on the content of the written request in relation to the first objective of the development standard concerning consistency with the desired future character of the neighbourhood. Again, in the context of this site, in which there is no five-storey building on the eastern side of Bay Street within this block and where the request does not define the "neighbourhood" with which the proposed development is seeking to be consistent, I do not consider that consistency with the desired future character in the broad undefined area of the "neighbourhood" is sufficient to justify the contravention of the height development standard on this site. Whilst it is well established that the desired future character of an area can be informed by the form of the buildings approved by the Council in the area, selectively pointing to other approved buildings elsewhere in the Double Bay local centre that are five or more storeys in height (including across the road) does not actually inform why a fifth storey is justified on this site, particularly in the absence of any streetscape analysis or analysis of a defined area with which the proposal is seeking to be consistent. This is readily distinguishable from the decisions in Gejo, Abrams and SJD DB2 Pty Ltd v Woollahra Municipal Council, in which each contravention of the height development standard actually facilitated the achievement of a consistent streetscape and the desired future character of the particular built context. In the present case and in the present written request, the departure from the height development standard is not justified by such an outcome, and reliance on specifically chosen developments in some broader undefined area is not sufficient.
5. To the extent that this ground also relies on the response to the first objective of the development standard in the written request, it also relies on the additional storey not being visible from across the road. I do not accept that the lack of visibility of the additional height from a particular vantage point is sufficient to justify the exceedance of the height development standard. Indeed, the additional height will be visible from the north along Bay Street as it rises above the two-storey character buildings immediately adjacent.
6. Further, to the extent that the written request seeks to rely on the bulk and scale of the building approved to be constructed on part of the site, that development consent is not sufficient to establish that there is a consistent streetscape of five storeys, as that is a single consent and does not form part of the current context of the site. It is distinguishable from the circumstances in SJD DB2 Pty Ltd v Woollahra Municipal Council, where there had been numerous approvals of a consistent scale along that block of Cross Street.
7. For those reasons, the "Consistency with context (desired future character)" ground is inadequate to justify the contravention of the height development standard.

The environmental impacts ground

1. The avoidance of impacts is an environmental planning ground, as it promotes "good design and amenity of the built environment", one of the objectives of the EPA Act. However, even if I was to accept that there is no impact from the additional height, the lack of impacts does not arise from the breach of the height development standard so as to justify the breach. Further, even if there was such a link, I do not accept that a lack of impact is sufficient to justify the extent of the breach of the standard. The lateral extent of the breach is for the entire fifth storey, and the vertical extent of the breach is up to 3.4m, an entire storey (in addition to the plant and equipment). The full height of the building is highly visible when viewed from the north in context with the adjoining character buildings. A lack of external impacts is not sufficient to justify such a departure from the standard.

The urban design benefits ground

1. The ground that concerns the urban design benefits focuses on the revised façade from what was previously approved, and the setback of the upper level to reduce visibility. I consider that these are benefits of the design of the development, they are not benefits that inform the breach of the height development standard so as to justify that breach.

The previous approval ground

1. The request states that "as the environmental planning grounds were previously approved, the proposed variation is considered acceptable." The previously approved development was a different design to that proposed, and across a narrower street frontage. The differences in the approved development and the proposed development are such that reliance on the previous approval is not sufficient to justify the breach of the height development standard for the proposed development. Accordingly, there needs to be environmental planning grounds specific to the proposed development in its context that justify the breach of the height development standard.

The written request concerning the breach of the FSR development standard

1. Many of the environmental planning grounds advanced to justify the breach of the height development standard were also relied upon in the written request concerning the FSR development standard. The proposed development has a total gross floor area of 3470m2, which results in a FSR of 3.38:1, which is 35% greater than the development standard of 2.5:1. That means there is an additional 903m2 of floor area which is required to be justified by environmental planning grounds. Of that, 70m2 of basement level is to be used for accessible end of trip facilities, which is justifies an exceedance of 70m2. However, for similar reasons set out above and as expressed below, none of the grounds advanced in the written request are sufficient to justify the extent of the contravention of the FSR development standard.

The commercial use ground

1. For the same reasons as those expressed above at [72] to [76], the commercial use ground is not sufficient to justify the contravention of the FSR development standard, which is an additional 903m2 of floor area. The provision of additional floor space for one type of planning use does not constitute an environmental planning ground, and it is a benefit that can be brought about by any breach of a FSR development standard, such that it does not justify that a breach is appropriate on this particular site for this particular development. Further, the argument that removing the additional floor space results in an "inefficient use of the site" is not supported by any evidence that demonstrates that the additional floor space is justified to achieve efficiency in the development of the site.

The environmental impacts ground

1. In a similar manner to what is set out above at [84], I do not accept that a lack of impact is sufficient to justify the extent of the breach of the standard, which is 903m2 of floor space. Indeed, I am also not satisfied that the additional bulk caused by an additional 903m2 of floor space does not have an impact. The bulk of the building is highly visible when viewed from the north on Bay Street, as it sits forward of the front building line of the adjacent character building with a large and visible wall above the character building. A lack of external impacts is not sufficient to justify the extent of the contravention of the FSR development standard, particularly where the additional bulk and scale is readily perceivable and out of character in the streetscape on the eastern side of Bay Street.

The consistency ground

1. Similar to what is set out above at [77] to [83] concerning the height development standard, the request concerning the FSR development standard does not provide any analysis of how the additional floor space above the FSR development standard is justified in order for the building to achieve consistency in its context or consistency with the desired future character. The reliance on the FSR of approved buildings elsewhere in the local centre, without any analysis of the immediate built form context or of the desired future character for that part of Bay Street, is not sufficient to establish that the additional floor space is justified to achieve consistency with the current context or desired future character. This is quite distinct from the detail in the written requests in Gejo, Abrams and SJD DB2 Pty Ltd v Woollahra Municipal Council, where the analysis of the streetscape context and the desired future character demonstrated that additional height and/or floor space was required in order to achieve an appropriate streetscape outcome.

The urban design benefits ground

1. In the same way as described above in [85], the urban design benefits ground focuses on the design of the development, which are not benefits that inform the breach of the height development standard so as to justify that breach.

The previous approval ground

1. Similar to what I have outlined above at [86], the request relies on the prior approval, and states that "as the reasons were previously considered sufficient environmental planning grounds, the proposed variation is considered acceptable". As set out above, the previously approved development was a different design to that proposed, across a narrower street frontage. The differences are such that reliance on the previous approval is not sufficient to justify the contravention of the FSR development standard of this proposed development, which is an additional 903m2 of floor area. Instead, there needs to be environmental planning grounds specific to the proposed development in its context that justify the breach of the FSR development standard.

The written requests do not establish that compliance is unreasonable or unnecessary

1. My findings above that the written requests have not adequately addressed that there are sufficient environmental planning grounds that justify contravening the development standards is a sufficient basis upon which the development application must be refused. In addition, I am not satisfied that either of the requests establish that compliance with the relevant standard is unreasonable or unnecessary.
2. As stated above, each of the written requests relies on the first of the tests described in Wehbe, that the objectives of the standard are met notwithstanding the contravention. However, the written request for the height development standard does not adequately define the "desired future character of the neighbourhood", which is an objective of the height development standard, and the written request for the FSR development standard does not adequately define the "desired future character of the area in terms of bulk and scale", which is the objective of the FSR development standard.

The written request concerning the breach of the height development standard

1. In addressing the objective "to establish building heights that are consistent with the desired future character of the neighbourhood", the written request relies on the entire Double Bay local centre, and on the "eclectic mix of residential flat buildings, commercial and mixed use developments that vary between two and six storeys". Relying on Preston CJ of LEC in SJD DB2 at [63] that the desired future character "can be shaped by… other factors, including approved development that contravenes the development standard", the request recites 11 prior development consents (two of which are the prior approvals on the site), and states that they demonstrate an emerging higher density built form character. The request also relies on the two prior approvals for the site to establish that the desired future character must be in accordance with those two approvals.
2. The problem with defining "the neighbourhood" as the entire Double Bay local centre is that the local centre does not have a uniform desired future character. Instead, both the WDCP and the WLEP set different height and FSR development standards for different areas within the local centre. The reliance on the entire local centre is inconsistent with the WDCP, which defines different areas within the local centre and expresses the desired future character of each of those defined areas, which are focussed on each street, including different building envelope controls. The height and FSR development standards established by the WLEP are consistent with the WDCP building envelope controls, such that they vary for each of the defined areas. The written request does not provide any explanation as to why the entire local centre has been relied upon in considering "the neighbourhood".
3. Additionally, by casting the net wide for the definition of "the neighbourhood", the request then highlights a select number of development consents that allow height and FSR that exceed the applicable development standards (shown in Table 1 of the request). Of the 11 that are relied upon, four of them have different applicable development standards, and two of them concern the site. The remaining five are on Cross Street, within a different visual catchment to that of the site. Therefore, none of these development consents inform the desired future character for this part of the Double Bay centre.
4. Even if the entire Double Bay centre could be relied upon as "the neighbourhood", the request fails to provide adequate analysis of its desired future character as expressed through the grant of development consents, which would necessitate considering all of the other development consents granted within the Double Bay centre. The desired future character of any defined area is not appropriately established by identifying only a select proportion of approvals within that area.
5. With respect to the two consents for the site, I do not accept that what has been approved on a single site can establish a desired future character for "the neighbourhood".
6. The WDCP sets a clearly defined desired future character for the Bay Street south area, which is one way to understand "the desired future character of the neighbourhood" and the written request fails to establish that there is a desired future character to the contrary. There is no emerging "higher density built form character" for Bay Street south established by the request. In the joint report, Mr Dickson considers the height in storeys of buildings within the vicinity of the site, including approvals at 2-10 Bay Street and the existing built form at 24 Bay Street, which is supported by a character study at Annexure J to the joint report, but none of this analysis is contained within the written request. Given that the state of satisfaction required by cl 4.6(4)(a)(i) of the WLEP depends upon the contents of the written request, the Court is constrained by that request in considering whether the request adequately addresses the matters in cl 4.6(3), and I cannot consider that other material. As stated by Payne JA in RebelMH Neutral Bay Pty Limited v North Sydney Council [2019] NSWCA 130 at [4]: "Properly construed, a consent authority has to be satisfied that an applicant's written request has in fact demonstrated the matters required to be demonstrated by cl 4.6(3)." (Emphasis added.)
7. In failing to define "the desired future character of the neighbourhood", the written request concerning the height development standard has also failed to establish that the proposed development is consistent with that character. The request therefore does not address how this first objective of the height development standard has been achieved notwithstanding the contravention. As the request relies upon achieving the objectives of the development standard in order to demonstrate that compliance with the standard is unreasonable or unnecessary, its failure to establish that the proposed development achieves one of the objectives means that the written request has not demonstrated that compliance is unreasonable or unnecessary, contrary to the requirement of cl 4.6(3)(a) of the WLEP, and I am similarly not satisfied that the request has adequately addressed that matter.

The written request concerning the breach of the FSR development standard

1. For the same reasons, I am not satisfied that the written request concerning the FSR development standard demonstrates that compliance is unreasonable or unnecessary in the circumstances of the case. The objective which the request seeks to address is "to ensure that buildings are compatible with the desired future character of the area in terms of bulk and scale". Again, rather than defining the "area", the written request relies on the entire Double Bay local centre, and it relies on various recently approved FSR exceedances.
2. In keeping with my observations above at [96], the problem with defining "the area" as the entire Double Bay local centre is that it is not consistent with the variation in planning controls across the centre, as both the WDCP and the WLEP set different height and FSR development standards for different areas within the local centre. The written request does not provide any explanation as to why the entire local centre has been relied upon in considering "the area".
3. Table 1 of the request sets out the development consents relied upon to establish the "desired future character of the area in terms of bulk and scale". They are slightly different to those relied upon in the written request concerning the height development standard by the inclusion of the development consent for 2-10 Bay Street. Nevertheless, they extend beyond the visual catchment of the site and only six of them concern sites with the same applicable FSR development standard (other than the approval for the site itself). Again, those six development consents concern sites on Cross Street, outside of the visual catchment of the site. Other than "pointing to" breaches of the FSR development standard, the written request contains no analysis of the desired built form character for Bay Street south or some other defined area, which contains a range of buildings of varying bulk and scale including character buildings. Therefore, the request does not actually establish a desired future character for an acceptably defined area in which the site is located. Its statement that there is a range of buildings with the upper level stepped back, and "subtly articulated elements at the lower levels", is not sufficient in this regard. Further, in reference to the approvals for part of the site, I do not consider that previous approvals on a single site can inform the "desired future character of the area in terms of bulk and scale".
4. In failing to define "the desired future character of the area in terms of bulk and scale", the written request concerning the FSR development standard has failed to establish that the proposed development is compatible with that character. The request therefore does not address how the objective of the FSR development standard has been achieved notwithstanding the contravention. As set out above concerning the written request for the height development standard, the request concerning the FSR relies upon achieving the objective of the development standard to demonstrate that compliance with the standard is unreasonable or unnecessary. Its failure to establish that the proposed development achieves the objective means that the written request has not demonstrated that compliance is unreasonable or unnecessary.

Other matters for consideration under cl 4.6(4)

1. For the reasons set out above, I am not satisfied that the request adequately addresses either that there are sufficient environmental planning grounds to justify contravening the development standard, or that compliance with the development standard is unreasonable or unnecessary in the circumstances of the case. Accordingly, I do not reach the state of satisfaction required by cl 4.6(4)(a)(i) of the WLEP, and therefore, pursuant to cl 4.6(4), I am precluded from granting development consent.
2. There is therefore no need to consider whether the proposed development will be in the public interest in accordance with cl 4.6(4)(a)(ii) of the WLEP.

The bulk and scale of the proposed development

1. The above findings on the adequacy of the two written requests prevent the grant of development consent for the proposed development. I note that, had I not so found, the appropriateness of the bulk and scale of the proposed development would have been required to be separately considered, particularly given the non-compliance with the building envelope controls in the WDCP. In circumstances where there is no consistent built form approved on the east side of Bay Street, a real question arises as to whether the proposed development meets the objective of the building envelope controls to achieve "the desired future character of streetscapes with appropriate and consistent building forms". Further, the scale of the proposed development adjacent to the character buildings is prima facie inconsistent with the control in 5.6.3.8 of the WDCP to "be compatible with the significance of… nominated character buildings", with the evidence of Dr Zanardo that the scale of the proposed development is "in stark contrast with its immediate neighbouring context being a row of two-storey character buildings… and the row of two-storey character buildings uphill".
2. However, I need not contemplate these issues, given that, in the absence of the satisfaction required by cl 4.6(4)(a), development consent must not be granted for development that contravenes a development standard.

The final orders

1. Clause 4.6(4) of the WLEP provides that development consent must not be granted for development that contravenes a development standard unless the consent authority is satisfied of the matters in cl 4.6(4)(a), which includes, at (i), that the applicant's written request has adequately addressed the matters required to be demonstrated by cl 4.6(3). As set out above, the proposed development contravenes both the height and FSR development standards. Clause 4.6(3) requires the written request to demonstrate that compliance with the development standard is unreasonable or unnecessary in the circumstances of the case, and that there are sufficient environmental planning grounds to justify contravening the development standard. For the reasons expressed above, the Court, in exercising the functions of the consent authority, is not satisfied that the applicant's written request has adequately addressed these matters. Clause 4.6(4) therefore prevents the grant of development consent, and the development application must be refused.
2. The Court orders that: 1. The appeal is dismissed. 2. The development application DA 535/2021 for the demolition of existing buildings and the construction of a five-storey commercial development with four levels of basement parking at 19, 21, 23-25 and 27 Bay Street, Double Bay, is refused. 3. Exhibits A, B, E, F, 1, 2, 4 and 6 are returned, and the remaining exhibits are retained. J Gray Commissioner of the Court

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 10 January 2023