Pallas Development Management Pty Limited trading as Fortis Development Group v Woollahra Municipal Council - [2023] NSWLEC 1005 - NSWLEC 2022 case summary — Zoe

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

[2023] NSWLEC 1005

Land and Environment Court (NSW)|2022-09-07

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At a glance

Source facts

Court

Land and Environment Court (NSW)

Decision date

2022-09-07

Source

Original judgment source is linked above.

Judgment (22 paragraphs)

[1]

The applicant's submissions in support of the requests

Pallas points out that the desired future character of the neighbourhood is a central theme in the objectives of the zone and of each of the height and FSR development standards. It relies on the decision of the Court in SJD DB2, that the desired future character is not fixed by the development standards, but that it can evolve over time. As stated by the Chief Judge, Justice Preston, at [53]: "The desired future character for a neighbourhood or area can evolve over time, responding not only to the provisions of WLEP but also to developments carried out in accordance with development consents granted under WLEP and the EPA Act."
Pallas submits that the evidence in this case is that there is a pattern of approvals for development that depart from the relevant standards for height and FSR. There are recent approvals that have been permitted to exceed the development standards for all of the western side of Bay Street opposite the site, for the two approvals on part of the subject site, and for both sides of Bay Street in the block immediately to the north of the site. Pallas submits that all of these approvals must be considered to inform the desired future character of the neighbourhood, with which the proposed development is consistent. Further, Pallas submits that the proposed development is consistent with the desired future character as described in the WDCP for each of the Bay Street (south) and Gumtree Lane precincts.
Pallas submits that, in circumstances where the development is consistent with the desired future character, the Court ought to conclude that the written requests establish that compliance with the development standards is unreasonable and unnecessary, and that there are sufficient environmental planning grounds to justify the breach of the height and FSR development standards, as required by cl 4.6(4)(a)(i) of the WLEP. Similarly, Pallas submits that a finding of consistency with the desired future character results in the conclusion that the proposed development will be in the public interest as it is consistent with the objectives of the standards and the objective of the zone, as required by cl 4.6(4)(a)(ii).

[2]

The Council's position concerning the requests

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.
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.
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.
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.
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.

[5]

The commercial use ground

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.
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.
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.
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.
For those reasons, the "commercial use" ground is insufficient to justify the contravention of the height development standard.

[6]

The consistency ground

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.
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])
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.
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.
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.
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.
For those reasons, the "Consistency with context (desired future character)" ground is inadequate to justify the contravention of the height development standard.

[17]

The written request concerning the breach of the height development standard

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.
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".
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.
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.
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".
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.)
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.

[18]

The written request concerning the breach of the FSR development standard

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.
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".
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".
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.

Parties

Applicant/Plaintiff:

Pallas Development Management Pty Limited trading as Fortis Development Group

Respondent/Defendant:

Woollahra Municipal Council

Cases Cited (20)

The site and the locality

The site comprises five allotments, as follows:

Lot 1 in DP 90466, known as 19 Bay Street;
Lot 1 in DP 196796, known as 21 Bay Street;
Lot 12 in DP 85469 and Lot 13 in DP 81623, which are together known as 23-25 Bay Street; and
Lot 14 in DP 200891, known as 27 Bay Street.

The site has a combined total area of 1026.6m2, and is rectangular in shape with a primary street frontage of 30.43m to Bay Street, and a secondary street frontage of 30.51m to Gumtree Lane at the rear. The site has an average depth of approximately 33.72m and a fall of around 1.59m from the south-western corner to the north-eastern corner. Two significant street trees are located within the Bay Street road reserve directly adjacent to the primary street frontage of the site.
The site falls within part of two defined areas within the Double Bay commercial centre, which are described within the Woollahra Development Control Plan 2015 (WDCP) as the Bay Street (south) and Gumtree Lane areas. Within those areas are a mix of retail and commercial uses in a variety of building forms, with some shop top housing. Immediately to the north there is a group of three two-storey terrace style commercial buildings, which are all identified as character buildings within the WDCP. Immediately to the south are a mix of older and contemporary two-storey commercial buildings, some of which are also identified as character buildings within the precinct, pursuant to the WDCP.
On the other side of Bay Street is a mix of older and contemporary buildings ranging in height from two to five storeys. This includes a five-storey building across the road comprising commercial tenancies and shop top housing, which has a three-storey street wall height with a recessive fourth storey and a further recessed upper fifth level (4-10 Bay Street), and the Bay Residences at 16-24 Bay Street, which is a five-storey building with the fourth storey stepped back in a mansard roof style form and the fifth storey further stepped back. To the east and north-east, across Gumtree Lane, is a mix of commercial buildings ranging between two and three storeys, most of which are oriented to New South Head Road.
On the west side of Bay Street (south) there are also a number of recent development consents, as follows:

At 2-10 Bay Street, development consent was granted on 17 November 2021 for a five-storey development that steps down the site's frontage as the land falls away from New South Head Road, with an additional setback of the fifth storey from Bay Street such that there is a four-storey street wall to Bay Street which also contains residential balconies. This consent was granted by the Court following an agreement by the parties: see Loftex Commercial Pty Ltd v Woollahra Municipal Council [2021] NSWLEC 1697.
At 14 Bay Street, development consent was granted on 17 May 2022 for a five-storey development, which has the fifth storey stepped back so that it is not visible when viewed from the opposite side of Bay Street. This consent was granted by the Court following an agreement by the parties: see Halepa Holdings Pty Limited v Woollahra Municipal Council [2022] NSWLEC 1237.
At 24 Bay Street, which is a corner site also comprising 2A Cooper Street and containing a heritage listed and character building, development consent was granted on 3 February 2022 for alterations and additions including the addition of two new levels, which has resulted in the approval of a five-storey building on the site. The fifth is storey stepped back so that it is not visible when viewed from the opposite side of Bay Street. The consent was granted by the Court: see Pallas Development Management Pty Limited trading as Fortis Development Group v Woollahra Municipal Council [2022] NSWLEC 1048.

An aerial photograph showing the location of the site, the location of the character buildings, and the number of storeys on buildings either existing or approved in the immediate vicinity of the site, is at Figure 1.

Previous approvals on the site

There are two recent development consents that apply to part of the site comprising 21, 23-25 and 27 Bay Street. These consents exclude 19 Bay Street, which now forms part of the site. Both development consents were granted by the Court.
The first was granted on 18 February 2020, for the demolition of existing structures and the construction of a new five-storey shop top housing development containing 15 apartments, three ground-floor level retail spaces, two rooftop gardens and car parking with vehicular access from Gumtree Lane. This development breached the height development standard but complied with the FSR development standard. In that matter, there was no contention raised concerning the acceptability of the height, bulk and scale and the experts agreed that the written request concerning the height development standard adequately addressed the requisite matters: see Thinq Net Pty Limited v Woollahra Municipal Council [2020] NSWLEC 1063 ("Thinq") at [23].
The second development consent was granted on 6 October 2021, for the demolition of existing structures and the construction of a five storey commercial building over three levels of basement parking. The orders granting development consent were made as a result of an agreement between the parties reached at or after a conciliation conference, pursuant to s 34(3) of the Land and Environment Court Act 1979 (LEC Act): see Pallas Development Management Pty Limited trading as Fortis Development Group v Woollahra Municipal Council [2021] NSWLEC 1585. There was no contradictor concerning the merits of the development the subject of the grant of consent, nor concerning the adequacy of the written requests for breach of the height and FSR development standards, and the Commissioner's consideration was confined to whether the decision agreed upon was "a decision that the Court can make in the proper exercise of its functions" in accordance with s 34(3) of the LEC Act.
In considering the prior decisions of Commissioners of the Court, in Segal & Anor v Waverley Council (2005) 64 NSWLR 177; [2005] NSWCA 310, the Court of Appeal makes it clear that "in the context of adversarial proceedings in the Land and Environment Court, there is [no] place for the so-called principle of consistency in administrative decision-making" (at [95]). Instead, "the merits of any particular application depend upon the facts and circumstances of the case and the substantive issues joined between the parties" (at [95]).
I note, however, that the form of developments approved within an area can inform the desired future character of that area (see Woollahra Municipal Council v SJD DB2 Pty Limited [2020] NSWLEC 115 ("SJD DB2") at [63]).

(2005) 64 NSWLR 177

(2007) 156 LGERA 446

(2018) 236 LGERA 256