Petro v Blacktown City Council

Applicant: LEGAL REPRESENTATIVES: Mr M Vassili, solicitor of Michael Vassili Solicitors Respondent: Mr C Drury, solicitor of DLA Phillips Fox

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

10900 of 2007 Cousta Petro v Blacktown City Council

JUDGMENT 1 Senior Commissioner: This is an appeal against the deemed refusal by Blacktown City Council (the council) of a development application to erect a two-storey commercial building on lot 2 DP 851609 Station Street, Rooty Hill.

The site 2 The site is 628m2 in area and being used as a commuter car park. It is on the fringe of the Rooty Hill town centre. The eastern boundary is to Station Street. The southeast boundary is a common boundary with lot 1 DP 851609 (Lot 1). The southwest boundary is to Weston Lane. The northwest boundary is a common boundary with lot 2 DP 717930, on which stands a motel.

The proposal 3 The applicant proposes to erect a two-storey commercial building for use as a medical centre and music centre on the site.

Statutory controls 4 The most relevant statute is the Environmental Planning and Assessment Act 1979, which lists under s5(a)(ii), as an object of the Act: the promotion and coordination of the orderly and economic use and development of land. 5 Development Control Plan 2006 (DCP 2006) requires, among other things, vehicles to enter and leave sites in a forward direction (see cl 5.42). The DCP also discourages stack parking.

Matters in contention 6 The council contends that the proposal would result in the "sterilisation" of the adjoining lot 1 DP 851609 (Lot 1). In order to decide that contention, the Court must come to a view on two questions: · Is development of Lot 1 by itself feasible? · If it is not, has the applicant demonstrated that it cannot purchase Lot 1 on reasonable terms? 7 In addition to the council's contention, Mr Paul Poinkin, who owns the adjoining motel, has raised objections to the proposal. The council's position is that those objections do not justify refusal of the application.

Is development of Lot 1 by itself feasible? 8 The council's planning expert was Mr Glen Alp, a senior planner with the council. The applicant's expert was Mr Damien Briggs, a planner and solicitor. They agreed that the development of Lot 1 by itself "would not be impossible, however it would be difficult". Mr Briggs suggested that development could be in the form of a single-storey building with four cars being stack-parked in two rows and accessible from Weston Lane. He agreed that the four cars would have to exit in reverse. He also agreed that the parking would have to have access close to the intersection with Kalunga Lane. 9 Mr Apps thought that development of Lot 1 was difficult enough to make it highly unlikely that anyone would want to do it. Both experts agreed that joint development of Lots 1 and 2 would bring a better result. 10 I accept Mr Apps' opinion that development of Lot 1 by itself would be so difficult that it is unlikely to happen. If it did happen, it would be undesirable for several reasons. First, a single-storey development adjoining the two-storey proposal at the corner would not fulfil the site's potential and would look odd in its context. Second, the reversing of cars to exit the site is undesirable and against the requirements of DCP 2008. Third, the stack parking arrangement makes the reverse exit worse, since parked cars in a stacked formation have to exit more frequently to allow the locked-in car to exit. Fourth, an access point for the cars close to Kalunga Lane is undesirable. 11 I am strengthened in the above conclusion by the applicant's failure to provide a sketch showing how Lot 1 might be developed by itself. If there had been a sketch, it would have revealed the weakness of the argument.

Has the applicant demonstrated that it cannot purchase Lot 1 on reasonable terms? 12 The applicant filed the appeal against deemed refusal on 11 September 2007. On 8 November 2007 the council filed its Statement of Contentions. Contention 3 was headed "Sterilisation of adjoining land". The council claimed that the applicant has failed to demonstrate how the proposed development would not result in the sterilisation of the adjoining lot. On 7 January 2008 a s34 conference took place on the site. The Commissioner presiding at the conference directed the applicant to serve any reports dealing with s79C considerations concerning impacts on adjoining properties by 31 January 2008. On 23 April 2008 there was a telephone mention before the Commissioner at which it became clear that the applicant had not complied with the direction. The Commissioner directed the applicant to file and serve all outstanding reports by 14 May 2008. A hearing was set down for 30 May 2008 but was vacated on 29 May 2008. On 6 June 2008 the current hearing on 17 July 2008 was set down. 13 Several judgments of the Court deal with the isolation of properties by development. The most relevant to this case is Melissa Grech v Auburn Council [2004] NSWLEC 40, in which Brown C established planning principles that apply to developments that isolate adjoining sites. The Commissioner set down three principles: Firstly, where a property will be isolated by a proposed development and that property cannot satisfy the minimum lot requirements, then negotiations between the owners of the properties should commence at an early stage and prior to the lodgement of the development application. Secondly, and where no satisfactory result is achieved from the negotiations, the development application should include details of the negotiations between the owners of the properties. These details should include offers to the owner of the isolated property. A reasonable offer, for the purposes of determining the development application and addressing the planning implications of an isolated lot, is to be based on at least one recent independent valuation and may include other reasonable expenses likely to be incurred by the owner of the isolated property in the sale of the property. Thirdly, the level of negotiation and any offers made for the isolated site are matters that can be given weight in the consideration of the development application. The amount of weight will depend on the level of negotiation, whether any offers are deemed reasonable or unreasonable, any relevant planning requirements and the provisions of s 79C of the Environmental Planning and Assessment Act 1979. 14 The relevant evidence before the Court consisted of three affidavits by: · Mr Maurice Lynch, a pharmacist who is a director of the company that owns Lot 1; · Mr Shaun Lilly, a licensed commercial real estate agent; and · Dr July Ong, a medical practitioner who is a director of the company proposing the development (although the applicant is not the company but the proposal's designer). 15 A letter on L J Hooker Commercial letterhead, dated 3 July 2008 and signed by Mr Hany Saleeb was attached to Mr Lilly's affidavit. The letter offered to buy Lot 1 for $170,000 and required a response by 4 July 2008. 16 Dr Ong was unavailable for cross-examination. Mr Lynch and Mr Lilly were cross-examined by telephone. While there were several discrepancies between the statements of Mr Lynch and Dr Ong, I do not need to determine whose version of events is correct. Two facts are not in dispute, namely: · The applicant has not obtained an independent valuation of Lot 1. · The letter of 3 July 2008 is the only written offer that the applicant made in respect of Lot 1. 17 While the details of the current case are different from Melissa Grech, in essence the principles established in that case apply. The absence of an independent valuation means that neither the applicant nor the owner of Lot 1 could come to a reasonable view about the value of Lot 1, nor can the Court determine whether the offer of $170,000 was reasonable. An independent valuation forms the basis of most commercial transactions involving land. The absence of an independent valuation in this case is inexplicable. 18 I turn to the timing of the written offer. I accept that the applicant did not undertake negotiations with Mr Lynch before the development application was lodged, since it may not have realised that the proposal to develop Lot 2 would isolate Lot 1. However, negotiations should have commenced after the council issued its Statement of Contentions in November 2007, or at the very latest immediately after the conciliation conference in January 2008, at which time the Commissioner directed the applicant to serve its reports by the end of that month. The fact that the applicant made its first written offer on 3 July 2008, eight month after it became aware of the council's contention, suggests that it was not serious in its attempt to purchase Lot 1. I am strengthened in this conclusion by the fact that, having waited eight month to make a written offer, the applicant gave the owner of Lot 1 just one day to respond to it. 19 In summary, I conclude that · the development of Lot 1 by itself is not feasible; and · the applicant has not demonstrated that it cannot purchase Lot 1 on reasonable terms? 20 For the above reasons the appeal is dismissed. However, given that the council has no other issues with the proposal than the isolation of Lot 1, this does not mean that the proposal cannot go ahead some time in the future. Following this judgment, the applicant may make an attempt to purchase Lot 1. Depending on the success of that attempt, it may re-submit the application either in its present form or in a form that covers the amalgamated site of Lots 1 and 2.

2. Development application to erect a two-storey commercial building for use as a medical centre and music centre on lot 2 DP 851609 Station Street, Rooty Hill is determined by refusal.

      Dr John Roseth
      Senior Commissioner

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