Platinum Property Advisors Pty Ltd v City of Parramatta Council

Platinum Property Advisors Pty Ltd v City of Parramatta Council - [2018] NSWLEC 1466 - NSWLEC 2018 case summary — Zoe

[5]

Issues

In accordance with the Court's requirements, in an appeal such as this, the respondent (in this case the Council) is required to identify matters that it contends should cause the Court, in exercising the functions of the consent authority, to refuse the application or impose certain conditions. These contentions represent contested issues between the parties and are generally the point of focus in a hearing.
In this matter, the negotiation processes between the parties and the relevant experts leading up to the hearing resulted in agreed amending plans (Exhibit A) and without prejudice conditions (Exhibit 3, as varied). These changes (to the application originally before the Court) have brought about a position where Council's expert evidence found the contentions had largely been addressed.
There were, nonetheless, objections raised by third parties in the course of the proceedings. Four objectors spoke at the site view. Each had an interest in the apartments at 13 Cowper Street (a three storey block comprising nine apartments) which is located immediately south of the subject site. A number of objectors provided written documents as supportive evidence (Exhibit 6). One of these objectors (Mr M Bury, who had been appointed by a number of the unit owners as one of their spokespersons in dialogue with the applicant's representatives) also gave oral evidence in Court at my invitation.
For the purposes here, the objections can be separated into three categories. The first is concerned with site isolation, or the question underpinning it, which is whether there is a need to amalgamate the subject site with 13 Cowper Street in order to achieve orderly and economic development. The second is concerned with the proposal's impact on the amenity enjoyed at 13 Cowper Street. The third category covers "other issues". The substance of each issue is considered below. Notwithstanding the comments at Paragraph 12, some of Council's submissions (from Mr Lalich) also gave attention to the orderly and economic development/site isolation issue.
It warrants mention here that the experts involved in the hearing were: Mr S Harding (town planning for the applicant) and Mr B Newbold (urban design and town planning for Council).

[6]

Policy framework

Pertinent here is the fact that the site falls within the Granville Potential Precinct Map identified in SEPP - Urban Renewal and thus, the SEPP's provisions apply to the subject land. The aims of SEPP - Urban Renewal are as follows: (a) to establish the process for assessing and identifying sites as urban renewal precincts, (b) to facilitate the orderly and economic development and redevelopment of sites in and around urban renewal precincts, (c) to facilitate delivery of the objectives of any applicable government State, regional or metropolitan strategies connected with the renewal of urban areas that are accessible by public transport.
The pertinent and operative provisions from cl 10 of SEPP - Urban Renewal are reproduced below: 10 Development in potential precincts (1) This clause applies to a development application to carry out development on land that comprises all or part of a potential precinct if the proposed development is or involves subdivision, or has a capital investment value of more than $5 million, and is not exempt or complying development. (2) The consent authority must not grant development consent unless it is satisfied that the proposed development is consistent with the objective of developing the potential precinct for the purposes of urban renewal. (3) For the purposes of subclause (2), the consent authority is to take into account whether or not the proposed development is likely to restrict or prevent the following: (a) development of the potential precinct for higher density housing or commercial or mixed development, (b) the future amalgamation of sites for the purpose of any such development within the potential precinct, (c) access to, or development of, infrastructure, other facilities and public domain areas associated with existing and future public transport in the potential precinct. …
Clause 3.7.2 of the DCP also includes particular reference to the issue. It is reproduced, relevantly, below: Site Consolidation and Development on Isolated Sites Objectives O.1 To encourage site consolidation of allotments for multi-unit housing and residential flat developments in order to promote the efficient use of land and to avoid the creation of isolated sites. O.2 To encourage the development of existing isolated sites in a manner that responds to the site's context and characteristics and that maintains a satisfactory level of amenity. Design Principles P.1 Development for the purpose of residential flat buildings, multi dwelling housing in the form of town houses, villas or the like is not to result in the creation of an isolated site that could not be developed in compliance with the relevant planning controls, including the Parramatta LEP 2011 and this DCP. Council will require appropriate documentary evidence to demonstrate that a genuine and reasonable attempt has been made to purchase an isolated site based on a fair market value. At least one recent independent valuation is to be submitted as part of that evidence and is to account for reasonable expenses likely to be incurred by the owner of the isolated site in the sale of the property. P.2 Where amalgamation of the isolated site is not feasible, applicants will be required to demonstrate that an orderly and economic use and development of the separate sites can be achieved. Applicants will be required to detail an envelope for the isolated site, indicating height, setbacks, resultant site coverage (building and basement), sufficient to understand the relationship between the application and the isolated site. The likely impacts the developments will have on each other, such as solar access, visual and acoustic privacy and the impact of development of the isolated site on the streetscape must also be addressed.

[7]

Applicant's submission

The applicant put a series of arguments why the above-referenced planning provisions are either accommodated, do not bring concerns in regard to the proposal, or are not relevant. I summarise my interpretation of the reasons as follows: 1. The site which was drawn into particular focus in the hearing as potentially isolated (13 Cowper Street) would not in fact be isolated - rather it is capable of being redeveloped in accordance with planning controls whether or not amalgamated. The evidence for this is that the revised layout for the development site (15 Cowper Street) is argued (by both experts) to provide a template, or model design, for a future development at 13 Cowper Street. The template design, which accommodates the need for an appropriate design response to "constraints" associated with Jubilee Park to the west and the taller buildings on the eastern side of Cowper Street, might also apply to other adjacent underdeveloped sites to the north (17 and 19A Cowper Street). 2. Even if 13 and 15 Cowper Street were amalgamated, there would be little further benefit in terms of floor space or development yield - the constraints suggested above were further referenced here. Mr Newbold suggested, when questioned by Ms Duggan, that perhaps an additional 20% gross floor area (GFA) yield may occur if the sites were amalgamated into a single integrated development, when compared to two individual site developments. 3. Over-attention to achieving maximum floor space in "potential precincts" under SEPP - Urban Renewal, as Mr Newbold had done according to this argument (discussed below), is misplaced. This is because there is no reference to maximising floor space in the operative provisions of SEPP - Urban Renewal (cl 10) and the fact that rather than floor area, it is capital investment value that triggers the operative provisions. Ms Duggan put it thus in her closing: Now, urban renewal is nothing more than change. It's not saying urban renewal to any specific standard. It is not saying that you must achieve a maximum FSR. It's not saying anything. It's saying the objective is urban renewal, or change. 1. The above point was linked to what was suggested as an otherwise inconsistency between SEPP 65 (with its ambitions for design quality) and SEPP - Urban Renewal (were it to have an ambition for maximising FSR). The common statutory provision, wherein the more recent instruments generally prevail over a later one in instances of inconsistency, were referenced. Although Ms Duggan did not have the material to confirm her view on that with her, the conclusion she drew was as follows: Because SEPP 65 came after (SEPP - Urban Renewal), even though the two SEPPs have the same clause in them, SEPP 65 would have to prevail. 1. In regard to the DCP and cl 3.7.2, the most pertinent point was the link to the process steps involved in instances where there is a potential for an isolated site (see Design Principle 1 in cl 3.7.2 reproduced at [18]. Ms Duggan's submission was that all the appropriate steps were taken in terms of making an offer of fair market value, and documentary evidence of such steps provided (Exhibit B), should it be determined that there was an issue in regard to site isolation. The submission was that the offer was not taken up.

[8]

Submissions from owners at 13 Cowper Street

The submissions from owners at 13 Cowper Street on this issue questioned the amount and genuineness of the offers made on behalf of the applicants for the purchase of 13 Cowper Street. A number of the objectors were familiar with the Court's planning principle in regard to site isolation in Karavellas v Sutherland Shire Council [2004] NSWLEC 251 ('Karavellas') and believed the "requirements" (perceived to have been established in this case) had not been met.
Particular reference was made to an offer which immediately preceded the hearing date for this appeal, which the objectors submitted was not a genuine offer. The evidence indicated that an offer letter dated 6 July 2018 (on Mills Oakley letterhead and indicated as on behalf of Platinum Property Advisor Pty Ltd) was forwarded on behalf of the applicant. Exhibit 6 includes this offer letter as received by one of the objectors. The evidence indicated it was received by some of the owners on 10 or 11 July. The letter indicated that the offer would expire seven days prior to the hearing. The hearing commencement date was 18 July.
I reference it here but it was a point made in closing submissions from Mr Lalich that there was insufficient time given for this to be considered a reasonable offer given the advice to be taken and the like. He suggested "owners were put in a position where the offer had expired before they'd even received it".
Objectors were concerned that an independent valuation had not been disclosed to them. The objectors also said that at times the offers made were made as a like-for-like swap arrangement, where the swap was not practically possible with the intended apartment configuration of the proposal.
Objectors disagreed with the suggestion that they "have not responded to a reasonable offer" (indicated as contained in the amended statement of environmental effects - Exhibit 6). The outcome of a meeting with representatives of the applicants in April 2018, was expressed as follows (Exhibit 6): …nearly all the owners of 13 Cowper Street attended, the owners had generally expressed the intention of selling their unit depending on the offer actually presented. It was agreed that Mills Oakley will discuss options presented with their client however there was silence up until a letter dated 6 July.
One objector prepared (and supplied to the Court - Exhibit 6) an independent valuation which suggested a value "more than 10% more" for his property than that which had been offered.
Among the evidence of Mr Bury was what was presented as a "timeline" of events concerning the interaction between the owners of 13 Cowper Street and the applicant or its representatives. I summarise this timeline as follows:

The commencement point was dated 4 November 2015 with the reference: "DA/790/2015 Initial DA". It is indicated that in early 2016 meetings were held between the two parties (unit owners at 13 Cowper Street and representatives of the applicant) and for 4 February 2016, the reference was: "Offer letter from Platinum Properties to unit swap and $50k". A further offer letter "on behalf of Platinum Property Advisers" was evidenced on 14 March 2016.
The timeline goes on to indicate for 20 October 2016: "DA/991/2016 a new DA was lodged" (this is the application before the Court). Then on 8 November 2016, the timeline is marked: "Offer via letter and email from O'Connor Strata". The "offer" is documented and suggests two options - one for "total acquisition" of 13 Cowper Street, and another involving unit swaps. The timeline indicates the owners of 13 Cowper Street made submissions on the new DA to Council.
The date 3 April 2018 is marked: "Email from Mills Oakley to setup meeting at their offices". The meeting is indicated then as being held on 12 April 2018. It is indicated that eight of the nine unit owners were in attendance (Unit 6 was not represented). On 18 April 2018, it is indicated Mr Bury emailed Mills Oakley "summarising what the owners agreed to (as to value)". Mr Bury indicates he identified the owner of Unit 6 on 20 April and then on 29 May 2018 "I submitted another submission in regards to the latest proposal". The timeline ends with reference to the Mills Oakley letter dated 6 July 2018 (see [21]).

Objections were also raised in regard to the cost-benefit of a standalone site redevelopment at 13 Cowper Street in accordance with the design template established for 15 Cowper Street (the subject site). While the feasibility at 15 Cowper Street (providing 13 units and ground floor retail/commercial) was not questioned, the point was the template design "would not add enough units", whereas a combined development could be more "efficient": Two towers have been built - one 9-storey and one 5-storey to have 13 apartments, we had a 3-storey building that had 9 apartments. The lack of land size and frontage has forced them to build high and yet insufficient. If developments are combined together, it enables better efficiency, solar access and etc.

[12]

Development Control Plan-related considerations

The development is defined at Exhibit 4 as "mixed use development", whereas the DCP provisions at cl 3.7.2 indicate the point of concern is "multi-unit housing and residential flat developments". Nonetheless, in my interpretation, the underlying purpose of the clause is to promote orderly development for higher density housing forms, which this mixed use development is appropriately considered.
The clause is reproduced (relevantly) at [18].
In regard to the test at Item P1 (both fact and evidence of reasonable attempts to amalgamate), there is no doubt that there has been considerable dialogue between associates of the applicant and the owners of 13 Cowper Street over a number of years now. The genuineness and reasonableness of the purchase attempts is difficult for the Court to evaluate. I agree with the objectors from 13 Cowper Street and the submissions of Mr Lalich that the most recent offer could not be seen as a genuine one, due to the impractical timetable that was evident. However (according to the timeline submitted by Mr Bury and the evidence from the applicants at Exhibit B), prior to this there was evidence of offers to purchase and more recently a documented counter-offer from (all but one of the) unit owners from Cowper Street (18 April 2018 according to the timeline).
Mr Lalich observed that the first independent valuation of 13 Cowper Street was in October 2017 (Exhibit B). While it is unclear when or whether this valuation was conveyed to the owners, it is clear that the "dollar-amount" indicated in offers (e.g. those included in the objectors bundle in the last five pages of Exhibit 6), exceeded the October 2017 valuation. On the part of the unit owners, it is notable that the "counter offer" (dated 18 April) was considerably higher than the October 2017 valuation. There is also the evidence of the very recent valuation undertaken by one of the unit owners (over his unit only) dated 10 July 2018 (Exhibit 6). As indicated, the offers did not match the independent valuation commissioned by this unit owner.
Overall, I take a neutral position in regard to the matters associated with the DCP requirements at P1 of cl 3.7.2 of the DCP. This is concerned with the genuineness and reasonableness of the acquisition offers. I would observe that site amalgamations involving multiple land owners can be complex, with difficulties in gaining a common position on the part of the individual land owners. It seems reasonable to me to expect that the action or energy involved in the negotiation process needs to be, to an extent, reciprocal. Here I do acknowledge the submissions and record keeping that occurred on the part of the owners at 13 Cowper Street. But I also believe that it would be reasonable to expect the unit owners may have taken a more active role, if they were unhappy with the offers made. This could have occurred by feeding into the valuation process at an earlier stage (e.g. by commissioning an earlier independent valuation). I do note that by April 2018, there was an indication of counter offers being made. But I also acknowledge that, in the material before the Court, it was not clear that all of the unit owners were as one in their ambitions to actually sell their unit as part of a redevelopment scheme, with the owners of Unit 6 not clearly part of the scheme at all. While not necessarily insurmountable, this suggests ongoing difficulties in securing any amalgamation.
There are two main factors that bring me to the view that this issue ("orderly and economic development/site isolation") should not cause the application to fail. First, is the joint evidence from the experts that the proposal provides a template sufficient to demonstrate that there is the capacity to develop 13 Cowper Street in a similar fashion to the subject site. This would achieve a development that is within the confines of the planning controls, although not of course in this instance reaching the floor space yields suggested in the FSR controls. This position responds adequately to the DCP requirements at Item P2 of cl 3.7.2.
Second, in relation to SEPP - Urban Renewal, and in a sense conversely to the above, is the fact of the limiting influences on future redevelopment for both 15 and 13 (and for that matter potentially 17) Cowper Street. These limiting influences include: (1) the overshadowing tower buildings across Cowper Street, and (2) the interrelationship with the child care centre and park to the west (ie the need to not unreasonably overshadow etc). Both of these matters were discussed in considerable detail in the expert evidence as constraining influences on floor area yield due to the requirements of SEPP 65 or general planning concerns. So while I take the potential for further higher density housing development into account (under cl 10(3) of SEPP - Urban Renewal), the site idiosyncrasies are such that this potential at 13 Cowper Street (which already accommodates nine residential units) is limited, just as it is for 15 Cowper Street. This makes me conclude that any public interest which might be otherwise driving site amalgamation in this instance (in order to achieve higher density near transport infrastructure) is so minor as to not prevail over the uncertainty associated with redevelopment economics and land amalgamation practicalities.
I agree with Ms Duggan's submission that the Court's planning principles are concerned with situations where there are gaps in policy, rather than providing for policy themselves. However, I have noted the principles contained in Karavellas, and consider the above analysis not inconsistent with them.

[13]

Amenity Impacts at 13 Cowper Street

The amenity concerns raised by objectors included: overshadowing, privacy, visual impact and loss of airflow.
A common objection was that the taller tower development on the eastern side of Cowper Street already blocks morning sun, and that the proposal, if approved, would take away what was left of solar access and daylight to living areas, including balconies.
The evidence of the experts considered a documented graphic analysis of sunlight and shadow impacts of the amended design ("eye-of-sun views" provided at Exhibit A). The evidence indicates agreement by the experts that sunlight provision (to the required winter solstice standard of two hours) to 66% of the apartments at 13 Cowper Street and that this was acceptable. This was the opinion, even though the ADG requires 70% of the apartments to meet the requirement. I note this report was prepared prior to the final design changes - while not antagonistic in regard to solar access (the changes have the effect of reducing building bulk) it is not clear they would have a significant positive effect in regard to this factor.
In regard to visual privacy, Mr Newbold's evidence referred to a number of amendments made in the final plans, including: partial setback increases, combined with window and balcony location (and detailing) changes which redirected outlooks away from opposing windows at 13 Cowper Street. His view was that the arrangements were now satisfactory. Mr Harding has already been satisfied with this concern.
The visual presentation of the blank wall at the southern façade of the eastern building was another concern raised by objectors. The experts were here mindful of the alternative of "built-to-the-boundary" treatment which is evidenced nearby in Cowper Street (for example, 9-11 Cowper Street has a building built to the boundary of 13, and 21-23 Cowper Street is built to the boundary of 19 Cowper Street). The proposal was seen to appropriately (albeit relatively modestly) account for floor space ambitions of the zone while also accommodating reasonable amenity-related setbacks to 13 Cowper Street. The experts referenced the stepped wall edge and "variegated treatment" of the blank walls, some windows, along with landscaping as factors which offset the visual bulk of the eastern building's southern façade.
Airflow was also raised by objectors. The experts referenced the separation of the proposal massing into two buildings, and the side setbacks as factors which would result in adequate airflow and natural ventilation for 13 Cowper Street.

At a glance

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Judgment (18 paragraphs)

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Cases Cited (3)