Starray Pty Ltd v Sydney City Council

APPLICANT Mr N A Hemmings QC SOLICITORS Allens Arthur Robinson LEGAL REPRESENTATIVES: RESPONDENT Mr S D Rares SC with Mr D T Miller (Barrister) SOLICITORS PriceWaterhouseCoopers Legal

IN THE LAND AND 10605 of 2000 ENVIRONMENT COURT Pearlman J OF NEW SOUTH WALES 17 April 2002

STARRAY PTY LTD Applicant v SYDNEY CITY COUNCIL Respondent

This is a class 1 appeal against the deemed refusal of Sydney City Council to grant consent for a public car park on land of the applicant, Starray Pty Ltd ("Starray"). The proceedings are complicated by the fact that the proposed car park is to be located on underground levels in a building for which Starray has obtained development consent but which is not yet erected. The proposal therefore involves a change to the development for which development consent has already been obtained. The proceedings are further complicated by the fact that Starray relies upon existing use rights in respect of the public parking use.

The land upon which the development is proposed is 589 - 593 George Street, Sydney ("the site"). Since at least 1985, a 45-space short stay public car park has operated on the site at ground level.

On 26 August 1999, the council granted development consent (numbered DA 99/00423) to the applicant for a mixed use development on the site comprising:

(a) an 8-storey commercial tower fronting George Street; (b) a 26-storey residential tower comprising 132 residential apartments fronting Eagar Street; (c) a 5-level basement car park containing 163 spaces, of which 119 are to be associated with residential use, 40 are to be associated with commercial uses, and four are to be designated for disabled parking.

That development consent has since been modified, in ways not presently relevant, by the council on Starray's application. I will refer to this development consent, as modified, as "the first consent".

On 12 May 2000, Starray lodged the development application that is the subject of these class 1 proceedings, and I will refer to it as "the second DA". On the front of the form for the second DA Starray ticked a box which described the proposed development as "… erect a new building …". Later on the same page, Starray provided a "detailed description" of the proposed development as "proposed change of use to approved mixed development DA 99/00423" (the reference being, as is apparent, to the first consent). However, the precise development that was proposed was made more explicit by the statement of environmental effects. What was described in that document was the use of basement level 1 and part of basement level 2 of the proposed building the subject of the first consent for 45 short stay public car parking spaces, together with the construction of a parking attendant office, and the provision of a valet set down/pick up service in conjunction with the public car park. That proposal would necessitate some consequential changes to the development approved in the first consent, such changes being:

(a) an increase in the total number of car spaces, from 163 to 172; (b) a reduction in the number of car spaces associated with residential use from 119 to 109, that is, a reduction of 10; (c) a reduction in the number of car spaces associated with the commercial uses from 40 to 18, that is a reduction of 22; (d) conversion of the use of 262m2 designated as a storage area in the first consent for 11 of the 45 spaces in the short stay public car park.

Upon the deemed refusal of the second DA, Starray commenced this class 1 appeal. It came on for hearing before the then senior commissioner, Mr Jensen, who upheld the appeal and granted development consent subject to conditions. In particular, Senior Commissioner Jensen made the following order: 2. The development application previously approved by the council is confirmed subject to further conditions.

The Senior Commissioner then imposed a condition (numbered 2) requiring the applicant to modify the first consent in specified ways.

The council appealed under s 56A of the Land and Environment Court Act 1979 against the Senior Commissioner's decision on the ground that he was not seised of jurisdiction to make the orders which he did in relation to the first consent, or alternatively that he erred in law in making those orders. That appeal was heard and determined by Cowdroy J (Starray Pty Ltd v Sydney City Council [2001] NSWLEC 129) who held, at par 17, that "… the Senior Commissioner had no jurisdiction to make orders confirming the first consent or altering the conditions applicable to such consent since the first consent was not the subject of the appeal". His Honour set aside the orders made by the Senior Commissioner, and stated that it was necessary that the class 1 appeal be re-heard. The present matter is that re-hearing.

There is one other relevant background fact. In par 18 of his judgment, Cowdroy J recognised that a modification application under s 96 of the Environmental Planning and Assessment Act 1979 ("the EP&A Act") would be required, and he suggested that it would be appropriate for any such application to be filed and listed for hearing with the class 1 appeal. On 14 February 2002, Starray lodged a s 96 application with the council, but that application has not yet been determined.

Against that background, both Starray and the council have raised a number of questions for determination. It is unnecessary to set out those questions verbatim because the issues that they raise are, in essence, as follows:

(1) Is the second DA misconceived and incompetent? (2) If the answer to the first issue is in the negative, is the proposed development permissible by virtue of existing use rights? (3) If Starray cannot rely on existing use rights, is the proposed development permissible by reason of the application of cl 48A(2) or cl 48A(4) of the Central Sydney Local Environmental Plan 1996 ("LEP 96"); (4) If the proposed development is permissible, should consent be granted on the merits?

The council claims that the second DA seeks consent for development that is inconsistent with the development the subject of the first consent. It claims that in substance the second DA seeks to modify the first consent. Yet, as emphasised by Cowdroy J in his decision in the s 56A appeal, the first consent is not the subject of the present proceedings. The only statutory avenue available for modification of the first consent is an application under s 96 of the EP&A Act, but, although such an application has been made, it has not been determined and is not the subject of the present proceedings. If consent were to be granted to the second DA, the necessary result would be a modification of the first consent, a procedure for which the Court is not presently invested with jurisdiction.

Starray claims that the second DA, properly construed, seeks consent for a new development, namely, a 45-space short term car park, with an attendant's office and a valet service. It acknowledges that, before the development proposed in the second DA can be carried out, the first consent will need to be modified. It claims, however, that it is not the grant of consent to the second DA that will bring about the modification of the first consent; it is the determination in its favour of the application already made under s 96 for that modification.

The first question that arises is whether, properly understood, that for which development consent is sought in the second DA is new development and not simply a modification of the first consent. Although the language of the second DA is confusing, especially since it refers to a proposed change of use of the first consent, it can be deduced, from the reference to the erection of a new building and from the description in the statement of environmental effects, that what is sought is consent for a proposed public car park, office and valet service. That development is however inconsistent in part with the development the subject of the first consent, and hence consequential modification of the first consent will be necessary. This does not, of itself, convert the second DA into a modification application.

Further, the EP&A Act contemplates the approach that Starray took. Starray wishes to use the site in a certain way. The development that it wishes to carry out is to be carried out in part of a building not yet erected. If that development is permissible only with development consent, then it cannot be carried out without development consent (s 76A(1)). A consent authority may grant development consent subject to conditions (s 80(1)(a)). Section 80A deals with the imposition of conditions. Of particular relevance in this case is s 80A(1)(b) and s 80A(5) which provide as follows: 80A(1) Conditions - generally. A condition of development consent may be imposed if: (b) it requires the modification or surrender of a consent granted under this Act or a right conferred by Division 10 in relation to the land to which the development application relates … ( 5) If a consent authority imposes (as referred to in subsection (1)(b)) a condition requiring the modification or surrender of a consent granted under this Act or a right conferred by Division 10, the consent or right may be modified or surrendered subject to and in accordance with the regulations.

Certainly, at first glance at least, s 80A(1)(b) contemplates the very situation that has occurred in this case. But Mr Rares SC, appearing on behalf of the council, submitted that the development proposed in the second DA relates to land which is different to the land to which the first consent relates. That is, the second DA relates to two basement levels or subterranean strata, whilst the first consent relates to the ground level of the site, and all the strata both above and below it. Mr Rares submitted that, therefore, s 80A(1)(b) was not available to cure any inconsistency between the second DA and the first consent. In support of this proposition, Mr Rares relied upon a passage from the judgment of the High Court in North Sydney Council v Ligon 302 Pty Ltd (1996) 185 CLR 470, where, at p 476, their Honours said that the land to which a development application relates must "… be the land on which the specified development is proposed to be carried out".

However, as was also pointed out at p 476 in North Sydney v Ligon, a development can be carried out only on a particular parcel of land. The particular parcel of land upon which the development the subject of the first consent is to be carried out is the land which comprises the site at 589 - 593 George Street and it includes the strata both above and below ground level. The particular parcel of land upon which the development the subject of the second DA is to be carried out is land which is part of the land the subject of the first consent. To use the words of s 80A(1)(b), the first consent has been granted in respect of the land to which the second DA relates. In my opinion, in the particular circumstances of this case, if consent was to be granted to the second DA, a condition could be imposed under s 80A(1)(b), requiring the first consent be modified in stipulated ways. That consent would not itself modify the first consent, but would require a s 96 application to be lodged and approved.

For these reasons, I hold that the second DA is neither misconceived nor incompetent.

On 9 August 1999, LEP 96 was amended by the insertion of cl 48A. That clause prohibited the provision of public car parking on all land within Central Sydney, subject to certain exceptions. Prior to that date, however, Starray was using the site pursuant to the development consent granted in August 1985 as a public car park for 45 cars.

In these circumstances, Starray claims the benefit of existing use rights under div 10 of pt 4 of the EP&A Act. Section 106 relevantly defines an existing use as the use of land for a lawful purpose immediately before the coming into force of an environmental planning instrument which would have the effect of prohibiting that use. Section 107 provides that nothing in the EP&A Act prevents the continuance of an existing use. Section 108 permits the regulations to make provisions with respect to existing uses, and such provisions, known as incorporated provisions, are taken to be incorporated in every environmental planning instrument. Clauses 41 - 45 of the Environmental Planning and Assessment Regulation 2000 ("the Regulation") are some of the incorporated provisions and make provision for an existing use to be enlarged, expanded or intensified, or altered or extended, or rebuilt or changed to another use, in each case with development consent.

Starray claims that it may rely upon its existing use rights in order to use the two basement levels of the proposed building that is the subject of the first consent. In response, the council claims that any existing use rights that Starray enjoys are confined to the surface of the site, that is, the present street-level stratum. It claims that the existing use rights do not extend to the subterranean strata of the land, and in particular they do not extend to the basement levels of a building yet to be erected. For this proposition, Mr Rares relied upon the decision of the Court of Appeal in Lemworth Pty Ltd v Liverpool City Council [2001] NSWCA 389.

In Lemworth v Liverpool, the appellant had existing use rights in respect of the first floor of a building which it had been lawfully using as a brothel before development for the purpose of a brothel became prohibited in the relevant zone. It lodged a development application seeking consent to the use of the ground floor of the building as a brothel. In answer to a preliminary question of law raised at first instance, Cowdroy J had held that cl 42 of the Regulation did not permit development consent to be granted for the enlargement, expansion and/or intensification of the existing use of the first floor so as to include the ground floor. The Court of Appeal by majority (Stein and Hodgson JJA, Rolfe AJA dissenting) upheld the appeal in part in respect to a matter not presently relevant, but held that the answer so provided by Cowdroy J was correct.

Lemworth v Liverpool was concerned with the interpretation of the word "land" in cl 42 of the Regulation. Starray did not expressly bring the second DA within any one of the clauses in the Regulation, although the proposed development might invoke cl 42 (enlargement, expansion or intensification) or cl 43 (alteration of buildings) or cl 44 (rebuilding). However, even if none of those clauses is called into operation, Lemworth v Liverpool is nonetheless relevant authority because the proper construction of the word "land" is also required by virtue of the definition of "existing use" in s 106 which, relevantly, means "… the use of a building, work or land for a lawful purpose …" immediately before the relevant date. Put another way, the question that arises is - what is the land which was being used for a lawful purpose on the relevant date?

Stein JA, in Lemworth v Liverpool, considered the meaning of the word "land" and extensively canvassed the relevant authorities. It seems to me, with respect, that the following propositions relevant to the issue in this case may be derived from his Honour's judgment:

(a) An existing use of land refers to land which from a practical point of view should be regarded as one piece of land or a "unit" (pars 37 and 41);

(b) A physical use of the land is not necessary - land may be held in reserve (pars 36 and 38);

(c) It is necessary to inquire into the facts and circumstances which establish the particular existing use, for that will set the parameters for the "land" (par 30);

(d) An analysis of the provisions of the EP&A Act, including their changing nature and legal interpretation, demonstrates a narrowing rather than a broadening of existing uses and their rebuilding, expansion, enlargement and intensification (par 65);

(e) It is important to keep in mind that the use of land in question is a use which is prohibited by the relevant environmental planning instrument (par 54).

In applying these propositions to the facts of this case, I conclude that Starray cannot rely on existing use rights to authorise the use of basement 1 and basement 2 in the proposed building for the purpose of a public car park. The extent of the "land" in respect of which Starray has the benefit of an existing use for that purpose is the ground level of the site. At the relevant date, that is, the coming into force of cl 48A(1), which prohibited that use, the "unit" of land which Starray used for the purpose of a public car park was that ground level. Starray did not use any subterranean strata of the site for the purpose of that use, nor did it hold those strata in reserve for that purpose. Furthermore, as is obvious, Starray did not use or hold in reserve for its use either of the basement levels of the proposed building, because at the relevant date (and indeed at the present) those basement levels did not exist.

The finding that Starray cannot rely on existing use rights to authorise the proposed development is not an end to the matter. The question then arises as to whether the proposed development falls within one of the exceptions to cl 48A of LEP 96.

There are two possible exceptions into which the proposed use might fall. They are set out in cl 48A(2) and cl 48A(4). It is convenient to deal with the latter clause first.

Clause 48A(4) provides as follows: Existing public car parks

(4) The prohibition against public car parking contained in subclause (1) does not apply to land: (a) on which a public car park already lawfully exists; or (b) in respect of which a development consent for a public car park is current.

In this connection, context is important, as it is in relation to the meaning of "land" to which a development application relates (see pars 15 and 16), or the meaning of "land" relating to the extent of an existing use (see pars 22 and 23). It must also be borne in mind that cl 48A is a prohibition (cf Lemworth v Liverpool at par 54). In my opinion, the proposed development does not fall within either of the criteria set out in sub-cls (a) or (b). The development is proposed to be carried out on the two basement levels of the building yet to be erected. Obviously there is no car park already lawfully existing on those two basement levels, and, accordingly, sub-cl (a) does not operate to exempt the proposed development from the prohibition. Similarly, in terms of sub-cl (b), the proposed development does not cover land in respect of which a development consent for a public car park is "current". As I have earlier explained (par 24), there is an existing use of the ground level of the site for a public car park, but that existing use does not extend to the two basement levels of the building not yet erected. Accordingly, there is no current consent for that land, and so the proposed development is not exempted from the prohibition by the operation of cl 48A(4).

Clause 48A(2) relevantly provides as follows: New public car parks

(2) Consent may be granted for public car parks on land where no public car park already exists, but only where the consent authority is satisfied: (a) that the public car parking directly services major retail, cultural, recreational or entertainment uses which, in the opinion of the consent authority, are not reasonably serviced by public transport (either existing or planned) or existing public car parking;

It can be seen that this exemption depends on three criteria - firstly, whether the public car park will directly service the enumerated uses; secondly, whether or not those uses are reasonably serviced by existing or planned public transport; and thirdly, as an alternative to the second criterion, whether or not those uses are reasonably serviced by existing public car parking.

There is no dispute that the proposed car park would directly service the enumerated uses, for those uses currently exist in the location of the site. In par 133 of her report (ex 1), Ms L Bull, a consultant town planner who gave evidence for Starray, noted that "[t]he site is located in close proximity to the major entertainment precinct along George Street to the north, as well as China Town and the Capitol Theatre to the south". The precincts to which Ms Bull refers clearly encompass retail, cultural, recreational or entertainment uses.

The next issue is whether or not the enumerated uses are reasonably serviced by existing or planned public transport. Mr R Campbell, who is the acting manager, transport and access, for the council, stated as follows in par 4.5 of his report (ex E), and his evidence in this respect was unchallenged: The proposed public car park is within a 450-metre walk of Town Hall and Museum Stations, a 200-metre walk from the World Square Monorail Station, and a 270-metre walk to the Haymarket Light Rail Station. George Street is a major bus route through the Sydney CBD, with bus lanes on both sides adjacent to the proposed development.

In the light of this evidence, I find that the enumerated uses are reasonably serviced by existing public transport.

The essential dispute between the parties turns on, whether or not the enumerated uses are reasonably serviced by existing public car parking. Mr P Bull, who is a specialist planner in the employ of the council, prepared a table in his report (ex C) showing that there is in excess of 5000 public car parking spaces within an approximate 500 metre radius of the site. That evidence was corroborated by Mr Campbell who prepared a similar table. Furthermore, in giving oral evidence, Mr Bull expressed the opinion that the locality of the site was "saturated" with public car parking spaces. In addition, Mr Bull thought that there was a decline in the use of public car parking spaces. That opinion was reinforced by Mr Campbell, who referred, in par 4.3 of his report, to council surveys showing the under-utilisation of public car parks at World Square, the Cinema Centre and the Goulburn Street car parks, all within close proximity of the site.

The experts called on behalf of Starray expressed a contrary opinion. Mr R T Nettle, who is a traffic and transport consultant, pointed out, on p 18 of his report (ex 3), that there is significant usage of the existing car park on the site, and this shows a demand for public car parking in the vicinity of the site, particularly for night-time and weekend use. In his report in reply (ex 7), Mr Nettle stated that the demand for public car parking in the vicinity of the site will "alter dramatically" as a consequence of the erection of the building on the site, and other nearby buildings, such as World Square, the Manning Building, the Park Central development, the development at 339 - 345 Sussex Street, and Buckle House. In par 132 of her report, Ms Bull expressed the opinion that the current car park on the site is well used, "indicating that there is indeed demand for short stay public parking in this locality". She noted, in par 136, that there has been a significant reduction in the provision of public car parking spaces within World Square, and she expressed the opinion that "… there will no longer be a significant parking station located in the southern CBD precinct".

On this issue, however, I prefer the evidence of Mr Bull and Mr Campbell. They showed the number of available public car parking spaces, and in this respect their evidence was more particularised than the general statements of opinion of Mr Nettle and Ms Bull. The issue is whether or not the enumerated uses are reasonably serviced by existing public car parking, and the evidence of Mr Bull and Mr Campbell demonstrates that they are. But the matter is finally put to rest, in my opinion, by the letter dated 8 August 2001, written by Mr R West, who is a director of Mr Nettle's firm, because his opinion lends weight to the opinions of Mr Bull and Mr Campbell. Mr West was providing his opinion on the "Genting site", a proposed development bounded by Kent Street, George Street and Bathurst Street, about two blocks distant from the site. He stated, on the last page of his letter, that "… it would be difficult to identify more than a handful of sites in Central Sydney which would be better located to take advantage of existing public carparking and transport services".

I find, therefore, that the proposed development will directly service the enumerated uses, but those uses are reasonably serviced by existing public transport and by existing public car parking. Accordingly, the proposed development does not fall within cl 48A(2) and is therefore not exempted from the prohibition against public car parking contained in cl 48A(1).

I note, for completeness, that Mr Hemmings QC, appearing for Starray, submitted that cl 48A cannot derogate from rights vested by the incorporated provisions, that is, that it cannot prohibit the exercise of rights attaching to existing uses by virtue of div 10 of pt 4 of the EP&A Act. It is unnecessary for me to determine this issue in this case, because I have found that Starray does not enjoy existing use rights in respect of the land the subject of the second DA. Accordingly, the question of whether cl 48A can operate despite existing use rights does not arise.

I have concluded, in summary, that, for the foregoing reasons, the second DA is not misconceived or incompetent, but Starray does not have the benefit of existing use rights in respect of the development which it proposes, and the proposed development does not fall within the relevant exemptions to the prohibition against public parking stipulated in cl 48A(1) of LEP 96. Accordingly, the appeal must fail and it is unnecessary to consider either the merits of the second DA or an issue as to whether a condition imposing an inverse fee structure under cl 5.2 of Central Sydney Development Control Plan 1996 would be beyond power and void.

(2) Development application No D/2000/00395 in respect of a 45 space short term public car park at 589 - 593 George Street, Sydney, is determined by the refusal of consent.

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