Statewide Planning Pty Ltd v Canterbury-Bankstown Council

Land and Environment Court (NSW)|2021-02-02

Judgment

Statewide Planning Pty Ltd (the applicant) seeks development consent for the demolition of existing structures and the construction of a part five and part six-storey residential flat building containing 59 apartments over two levels of basement parking on a site known as 754-774 Canterbury Road, Belmore (the site).
The development application (DA) was considered by the Canterbury Bankstown Local Planning Panel (the Panel) at its meeting on 4 May 2020, when the Panel resolved to refuse consent. Subsequently, the Canterbury Bankstown Council (the Council) issued a notice of determination dated 4 May 2020 which provided six reasons for the Council's decision. A key issue in the assessment of the application related to the isolation of the adjoining land at 1A Trafalgar Street if development consent is granted. The Council contends that the development fails the provisions relating to site isolation in the Canterbury Development Control Plan 2012.
On 19 May 2020, the applicant appealed against the Council's decision pursuant to s 8.7 of the Environmental Planning and Assessment Act 1979 (EPA Act).
Before the matter proceeded to hearing the parties participated in a conciliation conference held pursuant to s 34 of the Land and Environment Court Act 1979 (LEC Act). Following the termination of that conference, on 19 January 2021 leave was granted to the applicant to amend the application to rely on revised architectural plans, a valuation report prepared by Grahame Hollinshead of Lunney Watts and Associates dated 28 December 2020; and a letter dated 13 January 2021 offering to purchase the adjoining land at 1A Trafalgar Street.
The architectural plans before the Court remain unchanged as they relate to the site. However, the isolation architectural plans prepared by Aleksander Projects (Revision A dated 12 January 2021) provide additional concept schemes to address the site isolation issue on the adjoining land. In this regard, the architectural plans provide the following: 1. Concept Plan 1: A three-storey residential flat building containing 3x2 bedroom apartments over basement level parking for 3 cars; and 2. Concept Plan 2: A five level residential flat building containing 3x2 bedroom apartments over basement level parking for 3 cars.

The experts

Mr Glen Apps and Mr David Waghorn, town planners, gave oral and written expert opinion evidence concerning the isolation contention and the merits of the application. Their written joint report prepared with the applicant's architect, Mr Aleksandar Jelicic is marked Exhibit D.
Mr Grahame Hollinshead of Lunney Watt and Associates gave oral and written valuation expert opinion evidence about the adjoining land at 1A Trafalgar Street. His written report (Exhibit 5) supports the applicant's final offer dated 13 January 2021 to purchase 1A Trafalgar Street for the sum of $1,458,000 (Exhibit 3).

The objectors

During the development assessment process for the DA, 10 letters of objection and a petition with 22 signatures were received in the period 10 July 2018 to 31 July 2018. Generally speaking, the lay objectors have expressed concerns about the amenity impacts arising from the R4 High Density Residential zoning of the site and the development's potential to sterilise the development opportunity of the adjoining land at 1A Trafalgar Street. Given the nature of the contested issues, it is appropriate to identify that the owners of 1A Trafalgar Street, Neal and Georgetta Baani, have objected to the application and contend, with the Council, that an approval of the DA will have the consequence of sterilising or isolating their property from its redevelopment potential under the Council's controls. The objectors' written submissions are collected with the Council's assessment report to the Panel dated 4 May 2020 relating to the original proposal in a supplementary bundle (Exhibit A). Some of the local objectors addressed their written submissions orally at the site view.
The adjoining owners' daughter, Ms Baani-Khoury, gave evidence for her parents via Microsoft Teams. She said that her parents had purchased the property in 2009 with the intention of making it their "forever home". However, since 2015 various real estate agents and developers had made representations to them for the purchase of the land for inclusion in a consolidated development with the applicant's land. The offers made to date, including those recently made by the applicant have been rejected as they are considered too low and not representative of recent sales in the area. Mrs Baani said that her parents had difficulty obtaining valuation evidence but recently had retained a valuer who had prepared a report and calculated that their property was worth $1.8 million. A copy of the unsigned valuation report from Mr Henson Liang, senior valuer from Crown Partners Group Pty Ltd, dated 25 January 2020, is before the Court as part of her parents' objection.
The applicant objected to the tender of the unsigned report on several grounds, arguing that it could not be accepted as expert evidence in the proceeding. After some discussion it was agreed that it would be accepted into evidence as part of the objectors' submission and given appropriate weight.

Decision

For the reasons that follow, I have determined that the applicant has demonstrated that the land adjoining the proposed development at 1A Trafalgar Street is not left sterilised or isolated so that it is incapable of being reasonably developed under the applicable controls. Furthermore, I am satisfied after assessment under s 4.15 of the EPA Act that the proposed development has merit and that the public interest is best served by the grant of a conditional development consent.

The site and its locality

The subject site has a consolidated site area of approximately 2,939m2 with a frontage to Canterbury Road of 71.04m, a 22.6445m frontage to Trafalgar Street and a 51.33m frontage to Chapel Lane.
The property is legally described as Lot 49 in DP 1031432, Lots A and B in DP 352069, Lot 113A in DP 307438, Lots 7, 9 &10 in DP 16308 and Lot B in DP 103679.
According to the Council's Amended Statement of Facts and Contentions (ASOFC), the site is located 750m to Belmore shops and 1km to Belmore railway station. The land across Trafalgar Street to the east is occupied by a motor vehicle showroom. The land west of the subject site comprises a 2-storey residential flat building which is subject to a DA under consideration for alterations and additions including the addition of a third storey, multi dwelling housing. The land across Canterbury Road to the north comprises single dwellings and landscape supplies yard. Land to the south comprises low density residential comprising a mix of single dwellings and dual occupancies.
An aerial photograph taken from the Council's ASOFC (Exhibit B) with the site bordered in red is provided below:
The existing buildings on the site, proposed to be demolished, are residential dwelling houses. They have rear access to Chapel Lane except 754 Canterbury Road which has access to Trafalgar Street to the east.
The property at 1A Trafalgar Street which adjoins the site occupies the north-western corner of the intersection of Trafalgar Street and Chapel Lane. This property has an area of 404.35m2 with frontage of 20.1m to both Trafalgar Street (along its eastern boundary) and Chapel Lane (along its southern boundary).

Statutory framework

The following environmental planning instruments, development control plans and codes and policies are relevant:

State Environmental Planning Policy No 55 - Remediation of Land (SEPP 55)
State Environmental Planning Policy (Infrastructure) 2007 (Infrastructure SEPP)
State Environmental Planning Policy (Building Sustainability Index: BASIX) 2004 (BASIX SEPP)
State Environmental Planning Policy No 65 - Design Quality of Residential Apartment Development (SEPP 65)
Canterbury Local Environmental Plan 2012 (CLEP)
Canterbury Development Control Plan 2012 (CDCP)

Before anything else, it is necessary to deal with my jurisdiction to deal with the application and then the contested issued.

Clause 7

The historic use of the site was for residential purposes and therefore contamination is not expected. A Stage 1 Contamination Report was prepared by Sullivan Environmental Sciences and was submitted with the DA.
Council's assessment report to Panel stated as follows: "Accompanying the application was a geotechnical investigation report prepared by D.Katauskas Geotechnical Consultant, dated 8 March 2018. Council's Environmental Health Officer has reviewed the report and raises no issues with the proposal. Conditions of consent were provided consistent with the recommendations of the report. In light of the above, clause 7 of SEPP 55 has been satisfied."
I am also satisfied of this fact on the geotechnical evidence before the Court.

Clause 66C

The site is not located within a pipeline corridor.

Clause 101

The site has a frontage to Canterbury Road which is identified as an RMS Classified Road; however, all vehicular access will be provided from Chapel Lane to the rear of the site. The applicant has also submitted a Traffic Engineering Assessment prepared by TTM Consulting Pty Ltd examining all aspects of the traffic and parking issues. The report concludes that the provision of vehicular access and servicing from Chapel Lane will ensure vehicle access is not provided from the classified road and that the application proposes a safe and efficient design.
The Council's assessment report to Panel stated as follows: "The proposal triggers Clause 101 (Development with frontage to classified road) and Clause 102 (Impact of road noise or vibration on non-road development) as the development has a frontage to Canterbury Road and provides for residential accommodation that is likely to be affected by road noise or vibration. Accordingly, the application was referred to Transport NSW (formerly Roads and Maritime Services) for review. No issues were raised by Transport NSW subject to a number of conditions of consent."
For the reasons outlined above, I am satisfied subject to the imposition of the Council's proposed conditions of consent that cl 101 of the Infrastructure SEPP has been satisfactorily addressed.

Clause 102

The applicant has prepared an Acoustic Assessment by Acouras Consultancy Pty Ltd to consider the noise impacts associated with the location adjacent to Canterbury Road. Subject to the Council's proposed conditions, the report concludes that the proposed development is entirely capable of complying with the requirements of cl 102(3).
For the reasons discussed under cl 101 (above), the Council is satisfied that cl 102 of the Infrastructure SEPP have been addressed subject to proposed conditions of consent. I am also satisfied of that fact based on the evidence before the Court.

Clause 28

No Design Review Panel has been established at Canterbury-Bankstown Council.
Assessment of the requirements of cl 28(b) and (c) of SEPP 65 has been undertaken in the Statement of Environmental Effects dated 17 April 2020 and prepared by Think Planners.
Council's assessment report to the Panel also assessed the nine (9) design quality principles and requirements of the Apartment Design Guide (ADG).
There are no built form contentions in the ASOFC which demonstrates that the proposed development satisfies the relevant objectives and/or design criteria stipulated under SEPP 65 and the ADG. For those reasons and after consideration of the evidence before the Court, I am satisfied that cl 28 of SEPP 65 has been appropriately addressed.

Clause 30

In relation to cl 30, the following considerations are provided: 1. Car parking satisfies the provisions of CDCP; 2. The internal area for each apartment satisfies Part 4D of the ADG; and 3. The floor to ceiling heights satisfies Part 4C of the ADG.
The requirements of cl 30(2) are considered above (cl 28) with respect to the design quality principles and the requirements of the ADG.
Based on the above, I am satisfied that cl 30 of SEPP 65 has been addressed.

CLEP

The relevant Land Use Table which regulates development on the site and the adjoining property at 1A Trafalgar Street is that applying to land zoned R4 - High Density Residential, which is set out in Part 2 of the CLEP. The Land Use Table provides: Zone R4 High Density Residential 1 Objectives of zone • To provide for the housing needs of the community within a high density residential environment. • To provide a variety of housing types within a high density residential environment. • To enable other land uses that provide facilities or services to meet the day to day needs of residents. 2 Permitted without consent Home occupations 3 Permitted with consent Attached dwellings; Bed and breakfast accommodation; Boarding houses; Building identification signs; Business identification signs; Business premises; Car parks; Centre-based child care facilities; Community facilities; Dual occupancies; Dwelling houses; Environmental protection works; Exhibition homes; Flood mitigation works; Home-based child care; Home businesses; Hostels; Multi dwelling housing; Neighbourhood shops; Office premises; Oyster aquaculture; Places of public worship; Recreation areas; Residential flat buildings; Respite day care centres; Restaurants or cafes; Roads; Semi-detached dwellings; Serviced apartments; Shop top housing; Shops 4 Prohibited Pond-based aquaculture; Tank-based aquaculture; Any other development not specified in item 2 or 3
Development for the purpose of residential flat buildings is permitted with development consent on land zoned as R4 - High Density Residential. Relevantly, the R4 zone extends to both sides of Canterbury Road and the adjoining zone to the east is B5 Business Development and to the south of the site the land is within the R3 Medium Density Residential zone.
Part 4 of the CLEP sets out the principal development standards for certain types of development to which the CLEP applies. The development standards of particular relevance are those set out in cll 4.3 (height of buildings) and 4.4 (floor space ratio (FSR)).
Clause 4.3 of the CLEP and the accompanying Height of Buildings Map prescribes a maximum building height of 18 metres for the R4 zone and the proposed development for the site is compliant.
The adjoining B5 Business Development zone also has a 18m height limit. The maximum permissible height drops to 8.5m in the R3 Medium Density Residential zone.
Clause 4.4 of the CLEP and the accompanying Floor Space Ratio Map prescribes a maximum FSR of 1.6:1 and the proposed development is compliant.
Clause 4.1 of the CLEP deals with minimum subdivision lot size. The control as it applies to the site and the adjoin site is expressed to be 460m2. The adjoining land at 1A Trafalgar Street is smaller in area however, it is an existing lot therefore this standard is not relevant.

Clause 2.3

Council's assessment report to the Panel has concluded that the proposed development satisfies the R4 objectives and Land Use Table. I have also considered the zone objectives in my assessment of the application as required by cl 2.3(2) and agree with the Council's assessment based my observations of the site and its environs taken at the Court view.

Clause 6.2

Earthworks are required for the proposed development and include, but are not limited to, works to the basement, footings and changes to the ground level.
The Geotechnical Investigation Report prepared by D. Katauskas Geotechnical Consultant, dated 8 March 2018 lodged by the applicant states that the proposed development satisfies the requirements of cl 6.2(3) for the following reasons: 1. The Stormwater Plans dated 17 March 2020 and prepared by Engineering Studio demonstrates that, despite the proposed earthworks, stormwater can be appropriately managed on site without adversely impacting on drainage patterns. 2. The proposed excavation will permit the efficient use of the land and therefore not negatively effect redevelopment. 3. Excavated material will be disposed of at a licenced waste management facility or re-used on site. 4. The proposed excavation will not have an adverse impact to the amenity of adjoining properties as detailed in the Geotechnical Report. 5. Excavated material will be disposed of at a licenced waste management facility or re-used on site. 6. The potential for limited earthworks to disturb relics is considered highly unlikely; however, should any relics be identified during site preparation and excavation, work will stop immediately, and applicable authorities will be notified. 7. The development works are a sufficient distance from watercourses and environmentally sensitive areas and will have no adverse impacts on such features. 8. The Geotechnical Report demonstrates that the earthworks can be undertaken without adversely impacting neighbouring properties. A number of recommendations have been made to minimise the impact of the development during excavation.
Council's assessment report to the Panel stated that the Geotechnical Investigation Report submitted with the application details recommendations that satisfy the provisions of cl 6.2 of the CLEP. Subject to the imposition of the Council's conditions of consent, I am also satisfied that cl 6.2 of CLEP has been addressed by the application.

Clause 6.4

The Stormwater Plans dated 17 March 2020 and prepared by Engineering Studio demonstrates that stormwater can be appropriately managed on site without adversely impacting on drainage patterns. Rainwater collected will be re-used on site where possible or redirected to the OSD system for any overflows.
Council's assessment report to the Panel stated as follows: "The development has incorporated deep soil zones and permeable areas at ground level throughout the site. Council's Development Engineer has reviewed the proposal and is satisfied, subject to conditions of consent."
Based on the engineering report and the Council's assessment, I am satisfied that cl 6.4 of CLEP has been addressed, subject to the imposition of the Council's conditions of consent.

Clause 6.6

The subject site is within a built-up urban environment with existing connections to water, electricity and sewage.
The applicant has submitted a Traffic Engineering Assessment prepared by TTM Consulting Pty Ltd that has examined all aspects of the traffic and parking issues.
Stormwater Plans dated 17 March 2020 and prepared by Engineering Studio have also been submitted to consider stormwater and drainage.
Council's assessment report to the Panel dated 4 May 2020 stated as follows: "Adequate provision of services, including vehicular access, substation and fire hydrants have been provided. It is noteworthy that the substation is to be provided within a void area within the basement."
Based on the reports and the Council's assessment, I am satisfied that cl 6.6 of CLEP has been addressed, subject to the imposition of the Council's conditions of consent.

Environmental Planning and Assessment Regulation 2000 (EPA Regulations)

Clause 49

For completeness, I accept that the applicant and owners consent details are provided on the DA form and cl 49 of the EPA Regulations has been addressed.

Clause 50

A statement by a qualified designer has been prepared by Aleksandar Projects. After a consideration of the statement I am satisfied that cl 50(1A) of the EPA Regulations has been addressed.

Clause 6

BASIX applies to the proposed residential flat building.
The applicant has provided a BASIX Certificate (Certificate Number 913467M) prepared by Outsource Ideas Pty Ltd dated 30 April 2018 to accompany the Architectural Plans prepared by Aleksandar Projects.
Council's assessment report to the Panel dated 4 May 2020 stated as follows: "A valid BASIX Certificate accompanied the Development Application. The Certificate details the required thermal comfort, energy and water commitments which are also illustrated on the submitted architectural plans. The proposal satisfies the requirements of State Environmental Planning Policy (Building Sustainability Index: BASIX) 2004 in this instance."
The Council is satisfied that the architectural plans prepared by Aleksandar Projects do not trigger the need for an amended BASIX Certificate. Therefore, I am satisfied that Part 2A of Sch 1 to the EPA Regulations has been addressed.

Section 7.11 Contributions Table 1.2

A Section 7.11 Contribution will be applicable to the proposed development based on the composition of the residential flat building. Draft Condition of Consent 12 outlines the Section 7.11 Contribution for the proposed development. The Council is satisfied that Canterbury Development Contributions Plan 2013 will be satisfied, subject to conditions of consent. I accept that assessment.

CDCP

Part C4.2.1.1 Control C1 of the CDCP provides that residential flat buildings must have a street frontage. Control C2 provides that the minimum primary street frontage width for attached dwellings, multi dwelling housing and residential flat buildings up to three storeys is 27m for development along major roads or 20m for development along any local road.
The property at 1A Trafalgar Street is not regarded as being on a major road but a local road. Both frontages have a dimension of 20.1m; that is to Trafalgar Street and the Chapel Lane; therefore, the provisions in Control C2 are relevant to the type of development able to be achieved at 1A Trafalgar Street.
Control C3 provides the minimum primary street frontage width for a residential flat buildings four storeys or greater at 30m. The property at 1A Trafalgar Street does not have sufficient street frontage width to accommodate a residential flat buildings four storeys or greater.
Part C4.2.1.2 (Isolated Sites of Residential Flat Building) provides as follows: "Isolated Sites Isolation of sites occurs where a property that adjoins a development site would be narrower or smaller than required to be developed under Canterbury LEP. Consequentially the isolated site would be incapable of accommodating the form of redevelopment envisaged by the planning controls. Objectives O1 To ensure that land adjoining a development site is not left sterilised or isolated so that it is incapable of being reasonably developed under the applicable controls. O2 To encourage that development of existing isolated sites in a manner that responds to the sites context and constraints and maintains high levels of amenity for future occupants and neighbours. Controls C1 Neighbouring properties are not to be isolated so that the property will be unable to reasonably accommodate redevelopment. C2 Undertake negotiations with neighbouring owners to seek amalgamation and enable coordinated development. C3 If neighbouring landowners do not agree on terms for amalgamation, provide evidence of reasonable offers, including at least two recent independent valuations. C4 If the amalgamation of adjoining properties cannot be achieved, demonstrate that the remaining property has reasonable potential for redevelopment by preparing an indicative schematic design that demonstrates: (a) A Building envelope; and (b) A general layout that complies with the current applicable planning controls. C5 The development of existing isolated sites is not to detract from the character of the streetscape. C6 Isolated sites should achieve a satisfactory level of residential amenity for its occupants and those on adjoining properties. Note: It is important to note that any development of existing isolated sites may not be able to achieve the maximum potential particularity in terms of height and floor space ratio and each case will be assessed on its individual merit."
In the event that the adjoining site 1A Trafalgar Street is caught by Part C4.2.1.2 of the CDCP, Control C2 requires the applicant to have undertaken negotiations with the neighbouring owners to seek amalgamation and enable coordinated redevelopment.

Negotiations to purchase 1A Trafalgar Street, Belmore

As it happened, the following negotiations for purchase of 1A Trafalgar Street, Belmore have occurred between the applicant and the landowners:

A formal offer of $1.35 million offered on 3 May 2018
The offer was rejected on 6 June 2018
A formal offer of $1.4 million offered on 17 October 2019
A final offer of $1.5 million offered on 1 November 2019
A counteroffer of $ 2.4 million was offered on 5 November 2019
A counteroffer of $2.1 million was offered on 18 November 2019
A formal letter from the applicant confirming the negotiation period had ended without an agreement being reached on 5 December 2019
A further offer of $1,458,000 was then sent by the applicant on 13 January 2021, attaching the Hollinshead valuation report of 28 December 2020. This offer was expressed to expire on 28 January 2021.

On 27 January 2021, in response to the applicant's last offer, the adjoining landowners put a counteroffer of $1.8m supported by a report from a registered valuer, Mr Henson Lian dated December 2020 (Exhibit 5 tab 8).
The landowners' counteroffer has been rejected by the applicant and it is accepted that amalgamation cannot be achieved.

Does the proposed development isolate the adjoining land at 1A Trafalgar Street?

The applicant's position

The applicant contends that properly construed, 1A Trafalgar Street is not an isolated site because an approval of the proposed development would not have the consequence of making it "...narrower or smaller than required to be developed under the CLEP". Instead, the consequence of an approval of the applicant's development would be that the property at 1A Trafalgar Street would become a site that adjoins the development site (Tcpt, 2 February 2021, p 51(28-50)).
Furthermore, the applicant submits that there is nothing in the CLEP which requires particular forms of development on the adjoining site. Instead, the planning controls give choices of permissible forms of development which lend themselves to be carried out subject to the particular circumstances of each case. In this instance, of the permitted forms of development in the R4 zone, the planners agree that the adjoining site at 1A Trafalgar Street could be developed as a dwelling house, or a 3-storey residential flat building. They also agree that the indicative designs in the form of Annexure D prepared by Aleksander Projects (Revision A dated 12 January 2021) to the joint report shows a schematic redevelopment of 1A Trafalgar Street which addresses C4 of the CDCP (Exhibit D Joint report p12). In short, the experts agree that a three-storey residential flat building with three apartments within a compliant building envelope is achievable under the applicable planning controls.
In considering the forms of development that might reasonably be accommodated on the neighbouring property at 1A Trafalgar Street, the planners accept that 1A Trafalgar Street has a number of constraints not the least its size and its location on the zone interface with the lower density R3 zone. And, while these constraints compromise achieving the maximum development potential afforded by the applicable controls, the applicant contends the reduced built form does not mean that the orderly and economic use and development of the land is not achieved or that the CDCP provisions are not satisfied by the indicative schematic designs before the Court.
Mr Waghorn gave evidence that the existing dwelling at 1A Trafalgar Street is closely aligned to the northern boundary with Chapel Lane and a transition in scale to a higher density zone is an important planning outcome on a small site. He said that the 5-storey concept plan (Annexure E) although achieving a higher yield (3 more units and a height of 18m and FSR of 0.94:1) offers a poor planning outcome as it will have greater impacts on the amenity of adjoining properties and result in a greater non-compliance with the CDCP controls. Whereas, the three-storey residential flat building with a smaller yield offers the "reasonable potential for redevelopment" anticipated by C4.2.1.2 or C4.3.1.2 of the CDCP. So too does the retention of the existing dwelling on the site, as it is consistent with the zone objectives in the Land Use Table and the proposed development does not interfere with the continued use of 1A Trafalgar Street in the way that it is currently used.

The Council's position

The Council has a different interpretation of C4.2.1.2 of the CDCP. Mr Galasso, submitted that the words "Isolation of sites occurs where a property that adjoins a development site would be narrower or smaller than required to be developed under the Canterbury LEP" are not definitional, but indicated if they were, a difference between the parties is that the applicant says that an isolated site is one where all development cannot be achieved under the CLEP whereas the Council simply says that it is any development (Tcpt, 2 February 2021, p 73(30-50)). In other words, as Mr Galasso explained, if the first sentence in C4.2.1.2 is the question, then it must be answered in the negative for some forms of development as the site would be narrower or smaller than required to be developed. On that basis, the Council contends that this is a case in which the provision is engaged. The site is isolated because it is narrower or smaller by virtue of the development of the proposed residential flat building.
In support of this interpretation, the Council submitted that it would make no sense, whether it is in respect of the R4 zone or any other zone, to accept that in order to have an isolated site one needs to be satisfied that no development can be done under the CLEP. If that were the test, then you would only need to look at the R4 zone Land Use Table which includes permissible uses such as building identification signs, business identification signs, flood mitigation works, oyster aquaculture and roads, to argue that the relevant site was not isolated and could be developed under the controls because those uses could be achieved on the site. In short, the submission is that "… it would be a nonsense to construe the CDCP in way the applicant contends namely that you only have an isolated site if you get a negative answer to all the permissible uses" (Tcpt, 2 February 2021, pp73-74).
The Council also argues that the notion of "accommodating the form of redevelopment envisaged by the controls" does not stop at the Land Use Table. Instead, the Land Use Table is the starting point, but the control also requires that you take into account the various development standards. The Council contends that when you consider the differences in the development standards among the permissible forms of development within the R4 zone, there is no doubt that of the permissible uses there is an incentive for a residential flat development over non-residential flat development. Of the permissible uses on any R4 zoned land, the CLEP is setting up a circumstance to encourage the form of redevelopment envisaged by the planning controls for residential flat development.
This interpretation of the controls is said to be supported by the objective O1 which provides "to ensure that land adjoining a development site is not left sterilised or isolated so that it is incapable of being reasonably developed under the applicable controls". Relying on the oral evidence of Mr Apps, the Council submitted that the redevelopment scenario proposed for 1A Trafalgar Street for a three-storey residential flat building which offers approximately 38% of the maximum FSR allowed in the R4 zone is an unreasonable development option under the controls. And, the result after the development of the applicant's land would be that the site at 1A Trafalgar Street would fit into the description in objective O2 of the provision as an existing isolated site. Therefore, the notion that the isolation does not exist or that it can be satisfied by leaving it as a single dwelling house in circumstances where it is located within the R4 zone is contrary to the control.
The Council submits that because the applicant owns all of the allotments, it could leave a residue lot that could be amalgamated with 1A Trafalgar Street as was discussed in the Court's decision in 680-682 Kingsway Caringbah Pty Ltd v Sutherland Shire Council [2017] NSWLEC 99 (680-682 Kingsway). In terms of orderly and economic use of the land, Mr Apps gave evidence that 1A Trafalgar Street - which is constrained by its 20m width and 20m depth - its squared dimension, would be resolved by consolidation. And, where consolidation is possible, he believes that the control encourages consolidation to occur by allowing sites to realise a greater height and therefore greater FSR.
Mr Apps said that gaining a reasonable yield from development of the site is relevant to an assessment of the orderly and economic use of the land. In this case the R4 High Density Residential zone allows an FSR of 1.6:1 and the proposed three storey residential flat building concept only achieves a GFA of 244m2 or FSR of 0.6:1. While Mr Apps accepts that the FSR is a maximum control he believes that a developer of 1A Trafalgar Street would seek to achieve a higher yield than that offered by the 3-storey residential flat building concept plan and therefore the site would be unattractive and would likely remain in its currently developed form. The cost of development of the land and achieving a reasonable profit needs to be recouped by the sale of the 3 apartments. Mr Apps disagreed that the revised isolation plan in Annexure D demonstrates a potential development that is economically viable. Conversely, should the land be consolidated with the land subject of the DA, a potential yield and an additional 8-10 dwellings over 5 stories could be achieved (Exhibit D, p18 at pars 61-63) .
Mr Apps also believes that the constraints of the site come to the fore when the site is developed on its own. If consolidated with the development site, the building mass over 1A Trafalgar Street would be able to be pushed northwards. A setback and transition to the R3 zone could still be achieved by reducing the building from the building steps to the south while maintaining an economically viable yield.
To the extent that the planning principles are engaged in the circumstances of this case, the Council contends that they potentially create a dilemma. As was put to Mr Waghorn in cross-examination, Mr Galasso submitted that one cannot simply assume because a site is part of an amalgamated site that all of the amalgamated allotments should be and must be put to the use of the proponent. One scenario is that the residue, that is the non- developed part of the site be able to be amalgamated with the true residue of the site, and to a certain extent that was the matter that Molesworth AJ was concerned with in 680-682 Kingsway decision when His Honour looked at the second question of whether the site can be amalgamated with another site.
In short, Mr Galasso submitted that irrespective of the CDCP, the answer to the applicant's submission that the controls for isolated site development are not engaged is that in any case the Court is entitled to inquire as to the resulting built form and whether orderly planning can recognise that in some instances there should be, as it were, sufficient held over to permit the potential appropriate urban design outcome in the future. And, if that means that lot 49 to the north of 1A Trafalgar Street should be excised from the amalgamated site to afford the potential in the future for there to be a redevelopment scenario of potentially amalgamated two sites, then so be it. As it stands presently, on Mr Apps evidence the three storey schematic design is an unlikely redevelopment scenario, that is notwithstanding any notion of viability and the like - as it is inconsistent with what is envisaged and incentivised as it were, in the series of R4 zone controls.

Finding on isolation

I agree with the applicant's interpretation of the CDCP isolation provisions as outlined above. The property at 1A Trafalgar Street is not rendered smaller or narrower by the development of the applicant land as proposed. Nor is it an existing isolated site. It simply becomes an adjoining site to the applicant development upon the approval of the applicant's DA.
In my opinion it is unreasonable to interpret the CDCP controls to mean that an isolated site is one where any development cannot be achieved under the CLEP. If that were the correct interpretation, then every site would be described as isolated when the neighbouring site was developed independently because inevitably the redevelopment potential only available through amalgamation would be lost. The words of the CDCP at issue describe an isolated site as one which is "incapable of accommodating the form of development envisaged by the planning controls". The objective being to ensure that the land adjoining is not left "incapable of being reasonably developed under the applicable controls". The Council seeks to import words into the CDCP which are simply not there.
That said, if I am wrong the applicant has adequately addressed the provisions of the CDCP to satisfy me that the adjoining site will not be isolated by an approval of the applicant's DA.
In this LGA the CDCP requires the applicant to demonstrate that the remaining property has reasonable potential for redevelopment by preparing an indicative schematic design that shows two things: 1. A building envelope; and 2. A general layout that complies with the current applicant planning controls.
The provision says what it says and cannot be ignored in the first instance to achieve a particular end.
Mr Apps gave evidence that the indictive design fails to demonstrate that 1A Trafalgar Street can accommodate an orderly and economic use and development (Exhibit D at [vii]), he also offered the view that the development is not economically feasible. However, the CDCP does not reference the orderly and economic development use of the land nor the economic feasibility of the proposed scheme -notwithstanding that I accept that my assessment of the application under s 4.15 must have regard to the aims of the EPA Act including s 1.3(c) and all relevant matters raised by s 4.15.
The planners in the joint report agree that the isolation plans before the Court prepared by Statewide Planning Revision A shows a 3-storey redevelopment option within a compliant building envelope and having a general layout that complies with the current applicable controls. Based on the agreed evidence of the planners in the joint report I find that the neighbouring property at 1A Trafalgar Street will not be an isolated or sterilised site by an approval of the proposed development. Mr Apps and Mr Waghorn have agreed that the applicant has demonstrated through the indicative schematic design for the 3-storey residential flat building (Annexure D) that the adjoining site will be able to reasonably accommodate redevelopment under the planning controls.
I am also satisfied based on my observations of the site and its environs that the R3 zone to the south of the site is predominately single storey development - basically cottages with some two storey dwellings. In the absence of any evidence that the character of the streetscape would be detracted either from the retention of the existing dwelling or replacement with another dwelling or a boarding house or even a three-storey flat building the C5 is not a basis to refuse consent to this DA.
The evidence is that the redevelopment potential of the adjoining land is constrained by its size, configuration and location. That said, the planning controls anticipate a variety of housing types within the high-density residential environment of the R4 Zone. The land use table identifying as permissible uses not only residential flat buildings but dwelling houses etc. Mr Waghorn gave evidence that not all development needs to be high rise or built to the maximum allowable FSR or height in order to achieve the R4 zone objective of providing " a variety of housing types within a high-density residential environment". I accept his expert opinion because to require only high-rise development would preclude the variety of housing types and other uses anticipated by the land use table and its objectives.
The applicant submits that the CLEP provides only a maximum and the lot is not required to be developed to utilise the full gross floor space permitted. The property at 1A Trafalgar Street could continue to be used as a dwelling house despite the proposed development taking place without including it. The CDCP does not require the development to be the maximum permitted but sets a lower bar to provide "reasonable potential for redevelopment". On the residential flat scenario provided by the applicant, 244 square metres could be achieved upon redevelopment of 1A Trafalgar Street which would result in a FSR of 0.6:1 thus achieving only 38% of the gross floor area. This does not necessarily make it an unreasonable redevelopment option accepting that it is a constrained site.
The R4 zone planning controls set out the Land Use Table permit residential flat buildings as well as a number of other uses including dwelling houses. The first objective for development in R4 zone is to provide for the housing needs of the community within high density residential development and does not require high density development on every parcel of land in that zone. The second objective of the R4 zone is so provide a variety of housing types within the high-density residential environment. However, the Council submitted that, considering the greater height and FSRs permitted for residential flat buildings, residential flat buildings are what the CLEP envisages for R4 zoning and encourages sites to be amalgamated to make it more attractive for development to gain a higher yield.
The Council also contends that it would not be reasonable to construe the CDCP as only defining a lot as an isolated site if all other land uses are not permissible. The Council highlighted that some permissible land uses include erecting signs or roads which evidently do not require as much land as a more substantial development. The Council submitted that 'accommodating the form of redevelopment envisaged by the planning controls' does not simply require contemplation of permissible uses in the Land Use Table but is a broader concept that starts with permissible uses in the Land Use Tables but also takes into account various development standards.
While we should always aim to have orderly and economic development and use of land (s 1.3 of the EPA Act), the specific inquiry invited by the provision in the CDCP is whether the land adjoining the site, whether 1A Trafalgar Street is narrower or smaller than required to be developed under the CLEP - the answer is no. Would the consequence of an approval of the applicant's residential flat building has the consequence of rendering the adjoining land incapable of accommodating the form of development envisaged by the planning controls? Again, the answer is "no" on the agreed evidence of the planners. Albeit, they accepted that the development potential is limited if the site is developed on its own, but the owners have refused the reasonable terms offered for amalgamation.
In the decision 680 - 682 Kingsway Caringbah Pty Ltd v Sutherland Shire Council [2017] NSWLEC 99 at [78] the Court sets out - what Mr Tomasetti SC submits are "…the well-established principles relating to the amalgamation of land and isolation of sites" - all stemming from the decision of Karavellas v Sutherland Shire Council [2004] NSWLEC 251.
Following a consideration of those planning principles and some later decisions of the Commissioners (Tcpt, 2 February 2021, p 71(30-50) and p 72(5 -15)) the applicant submits that I will conclude on the evidence that the consequence of the approval of the proposed development will not result in the isolation of the adjoining land at 1A Trafalgar Street.
While I agree that the evidence supports such a finding, I accept the dilemma identified by the Council in blindly applying the provisions of the CDCP and slavishly following planning principles derived from different controls. The purpose of planning principles, as I understood them, is to fill in the gaps where the planning control or policy is silent. In circumstances where the CDCP is specific, earlier decisions offering planning principles about different provisions are unhelpful, as each LGA and factual context is distinct. And, while a flexible approach to the application of the CDCP is mandated by the EPA Act this does not mean that the intent of the provision can be distorted to achieve a particular end by applying an irrelevant planning principle and ticking a box.
In saying that I accept that this CDCP does not have the same weight as a legislative instrument or statute. And, it is well understood that there is a need to apply the provisions of a DCP flexibly - with the EPA Act explicitly stating this in s 79C(3A)(b) "…be flexible in applying those provisions and allow reasonable alternative solutions that achieve the objects of those standards for dealing with that aspect of the development". But as stated earlier that does not mean that I ignore the text of a relevant CDCP provision.
In this case the adjoining land at 1A Trafalgar Street can be redeveloped as a standalone development envisaged by the controls. The applicant concedes that there may be amenity issues with the schematic design, yet I accept that these issues could be overcome in the design process for a DA as the schematic design obviously needs to be refined but is sufficient to address the Control 4 of the CDCP. The excluded lot is already developed with a dwelling house which is a permissible use and consistent with the existing streetscape, as such this form of development must be envisaged by the controls which also include an 8.5m height control for a dwelling house as a permissible development in the R4 zone.
As the applicant's planner Mr Waghorn explained in his evidence Controls C1 and C4 of C4.2.1.2 of the CDCP do not require a development to maximise the planning controls but rather the CDCP sets a lower bar to "reasonably accommodate redevelopment" or to demonstration that the remaining property "has reasonable potential for redevelopment. As detailed in the isolation concept scheme, a three- storey residential flat building would comply with the 20m frontage requirements under C2 of C4.2.11 and the experts have agreed that the site is not sterilised (Exhibit D par 48).
Based on my observations of the site taken at the Court view, in particular the land size and its interrelationship with the adjoining R3 Low Density Residential zone - I accept that the adjoining site's redevelopment may not achieve the maximum development potential afforded by the applicable planning controls. In that regard, as Mr Waghorn states in the joint report "the three-storey built form in the concept plan offers an appropriate transition between the proposed development at 754-774 Canterbury Road" (Exhibit D par 49). Moreover, I accept that a reduced built form does not mean that orderly and economic use and development of land is not achieved. The CDCP requires reasonable potential for redevelopment and to my thinking this has been demonstrated by the concept design before the Court.
The latest valuation from Lunney Watts dated 28 December 2020 states that the highest and best use of the land is to retain the existing dwelling and this must also be considered orderly and economic use and development of 1A Trafalgar Street. I am not concerned with the economic viability of the concept proposal or a redesign of the subject application to push the massing over 1A Trafalgar Street northwards to achieve an appropriate transition of built form with the R3 zone as Mr Apps suggests (Exhibit D par 64).
It may well be that if consolidated with the applicant's land, a greater yield of an additional 8-10 dwellings over 5 storeys could be achieved as Mr Apps suggests. However, there are numerous speculative development opportunities that could be envisaged under the controls but the CDCP does not mandate that inquiry.

Reasonableness of offers made - consideration and finding

The negotiations undertaken with the neighbours - which did not culminate in an agreement, were necessary for the purpose of the CDCP if the consequence of the development of the applicant 's land resulted in isolation or sterilisation of that adjoining site.
The CDCP requires that a reasonable offer must have been made by the proponent of the amalgamation to the owner of the potentially isolated property. On 28 December 2020 Mr Grahame Hollinshead, a senior valuer, prepared a valuation of 1A Trafalgar Street and peer reviewed two earlier valuations of the same property.
The valuation evidence from Mr Grahame Hollinshead submitted by the applicant provides the market value of the land and the applicant submits that it ought not be assumed that the R4 High Density Residential zoning of the land results in an automatic increase in land value. The applicant further submits that the most recent offer for purchase made to the owners of 1A Trafalgar Street was 8% above market value, which constitutes a reasonable offer, albeit rejected.
The Council contends that the offers for purchase made by the applicant were not reasonable as they appear to be for the subject site as a house, rather than as an acquisition for a building project attracting a potentially higher value. The Council further submits that the three valuations relied upon were made using comparison properties that were not in actuality comparable to 1A Trafalgar Street due to their different size, zoning, different height or FSR controls. As a result, the offers made were too low and did not constitute the 'reasonable offer' required by the party proposing the amalgamation.
Insofar as Mr Hollinshead's valuation is based on a redevelopment scenario the Council submits that there are serious errors and serious inadequacies in his report (Tcpt, 2 February 2021, p 75(46-50)). Mr Galasso submitted that the comparative sale 5 relied upon by Mr Hollinshead with a lower rate due to land size was " … conveniently narrow" and his reliance upon sale 6, having been transacted on the basis of a residential dwelling, with the submission that "…you only need to pay $1 more than that at auction" belying the fact that the effect of retaining these sales was to draw down the range that Mr Hollinshead relied upon with respect to the commercial development".
Mr Galasso also criticised sale 3, submitting that although deriving an amount of $2,864/m2 of potential floor area, that given this comparative site was in fact not comparable - with controls providing for less height and FSR - as a matter of common sense the rate per square metre should be greater than $2864/m2 rather than less (Tcpt, 2 February 2021, p 76(1-40)). It was also submitted that had Mr Hollinshead relied upon the rate per metre for sale 7 times the 646.88m2 "…it's a remarkably coincident number to the $1.8m that the objectors' valuer had come up with" (Tcpt, 2 February 2021, p 76(29-32)).
In response Mr Tomasetti submitted that where the Council has not adduced valuation evidence of its own, and where the objector has not qualified a valuer of their own, then it is difficult for the Court to accept the criticisms of Mr Hollinshead's expert evidence. Mr Hollingshead's expert valuation assessment is supported by a methodology which is explained and relies upon comparable sales analysis which is not contradicted by any other expert valuer's analysis.

Finding - reasonableness of the offer of purchase

So far as the rejection of the offer, I only need to be satisfied that the threshold point of negotiations has past and I do not need to delve into the negotiations to decide who's being more reasonable or unreasonable. That said, having considered Mr Hollinshead's evidence under oath in Court as tested by an experienced cross-examiner, I find that his answers are supported by an accepted valuation methodology. I do not dismiss his conclusions as a "speculative coincidence" as the Council suggests.
That said, I have evidence of an offer that is reflective of market value plus a premium from the only expert valuer in the case, Mr Hollandale. As far as I am concerned the relevant provisions of the CDCP, if engaged, have in fact been satisfied.

The agreed planning evidence and the draft conditions of consent for the applicant's proposed residential flat building

The ASOFC raises no merit issue with the applicant 's architectural plans for the proposed residential flat building subject to the imposition of the Council's draft conditions of consent. All external and internal referrals of the application support the grant of a conditional consent (Exhibit B pars 24 and 25). And, while the written submissions from the local objectors from Trafalgar Street and Garden Street raise concerns about the R4 zoning and the impacts of the permissible 18m height limit and density controls for their properties there is nothing the Court can do to preclude development which is permissible and compliant with the zoning. In the circumstances, the planning evidence that the development is acceptable must have precedence over the lay objections which have also been considered in the assessment process.
Accordingly, having considered the objectives of the R4 zone and the matters raised by s 4.15 of the EPA Act there is no proper planning basis to refuse consent to the proposed residential flat building on the evidence before me.
The council has proposed draft conditions of consent dated 29 January 2021 (Exhibit E). The applicant accepts the conditions as proposed subject to proposed condition 5 which requires a detailed landscape plan to be approved by the Principal Certifier prior to the issue of a construction certificate.
Draft condition 5 seems reasonable to me and as it is within power it should be imposed.

Directions

For the reasons I have given I have decided to grant consent to the application. In order to do this the Council is directed to prepare and file with the Court the conditions of consent in the template for the planning portal within 7 days of my reason for judgment. After receipt of the Council's conditions I will hand down the final orders.

Amendments 04 May 2021 - Correction to typographical errors at [68] and cover sheet. 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: 04 May 2021

At a glance

Court

Decision date

Source

Judgment (33 paragraphs)

Parties

Cases Cited (3)

Cited By (1)