Stromness Pty Limited v Woollahra Municipal Council

Berowra RSL Community and Bowling Club Ltd (2000) 114 LGERA 345 ; Carden v Willoughby Municipal Council (1985) 56 LGRA 366; Fabcot Pty Ltd v Hawkesbury City Council (1997) 93 LGERA 373; Fodor Investments v Hornsby Shire Council (2005) 141 LGERA 14 ; Kremer & Associates v North Sydney Municipal Council (1982) 47 LGRA 209 ; CASES CITED: Minister for Aboriginal Affairs and Anor v Peko-Wallsend (1986) 162 CLR 24; Mobil Oil Australia v Ku-ring-gai Municipal Council (1990) 70 LGRA 419; North Sydney Municipal Council v Boyts Radio and Electrical Pty Ltd (1989) 16 NSWLR 50; Parramatta City Council v Brickworks Ltd (1972) 128 CLR 1 ; Royal Agricultural Society of New South Wales v Sydney City Council (1987) 61 LGRA 305; Segal and Another v Waverley Council (2005) 64 NSWLR 177

DATES OF HEARING: 27/06/2006, 28/06/2006, 29/06/2006

APPLICANT Mr P Tomasetti SOLICITORS LEGAL REPRESENTATIVES: Lang Gellert & Noonan RESPONDENT Mr J Bingham SOLICITORS Deacons

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

11337 of 2005 Stromness Pty Limited v Woollahra Municipal Council

The consequence of the Court's decision in this appeal is the grant of development consent subject to detailed conditions. These conditions are not reproduced as part of this decision but are available for inspection at the Council. In addition, a copy the Court's Orders and the conditions may be obtained from the Court's registry upon payment of a fee. Details of the fee payable and process for obtaining a copy of the Orders and conditions are available on the Court's web site at http://www.lawlink.nsw.gov.au/lec/ .

JUDGMENT 1 Her Honour: This Class 1 Application is an appeal against the deemed refusal by Woollahra Municipal Council ("the Council") of a development application by the Applicant in relation to 95 Wentworth Road, Vaucluse. The application seeks to demolish the existing residential flat building and erect a block of four units on the site. The property has existing use rights for a residential flat building, a use otherwise prohibited under the current zoning. The Court conducted a view of the site, visited several objectors' houses and also viewed the site from Kings Road Vaucluse and Bottle and Glass Rocks on Vaucluse Point. Background 2 The proposal involves the demolition of the existing three storey building plus attic, five unit residential flat building, a single storey dwelling-house at the rear of the site and a triple garage at street level which encroaches onto public land. The existing flat building is a large white rectangular structure with a double storey tiled gable roof. The proposed building consists of four three bedroom units, 7.2m above an excavated basement level containing nine car spaces, including one visitor car parking space and pedestrian access. Access from the carpark is proposed to be by lift, as well as stairs. A garage storage area is proposed adjacent to the street frontage.

3 The proposed cement rendered residential flat building has a flat roof and terraces on the north-western side and front elevations. A balcony is proposed on the rear section of the south-eastern side elevation at the third floor level. Balconies are proposed on the rear elevation at the second and third floor levels. 4 The excavated basement level is at street level, 7.2m to 10.4m below the ground floor level. Rather than excavate the 7.2m of soil and rock between the basement and ground floor levels, the proposal links the basement level with the above-ground section of the building via internal stairs and a lift. 5 During the hearing a number of amendments to the proposed development plans were made such as deletion of the lap pool and several spas, reduction in the size of balconies on the first, second and third floor, and the introduction of numerous privacy screens on the balconies on all levels and along the entrance pathway. These amendments responded to a number of the surrounding residents' objections.

The site 6 The subject site is located on the eastern side of Wentworth Road, Vaucluse adjacent to the intersection with Chapel Road. The site has a Wentworth Road frontage 28.125m in length, a staggered north-western side boundary 35.2m in length, a staggered south-eastern side boundary 52.14m in length, a staggered rear (north-eastern) boundary 36.85m in length and a site area of 1152m2. 7 The site contains a south-eastern section which protrudes approximately 18.2m beyond the general alignment of the south-eastern side boundary. This section has an area of 214.76m2 and is currently landscaped open space. 8 The site is elevated approximately 10.7m above street level atop a ridgeline. The site is highly prominent from Wentworth Road in the vicinity of the Chapel Road intersection and sections of Sydney Harbour, in particular Vaucluse Bay and its eastern foreshore. 9 The adjoining property to the south-east (1 Chapel Road) is occupied by a three storey flat roofed cement rendered dwelling house including a basement level excavated partially into the landform. The adjoining property to the north-west (97 Wentworth Road) is occupied by a dwelling house partly single/partly double storey. Other adjoining properties to the east, north-east and north (32A, 36 and 40 Fitzwilliam Road) are occupied by two or three storey buildings. A new house being built at the rear of the property at 38 Fitzwilliam Street appeared on the view to be higher than the proposed development. There is an issue as to whether this is in accordance with the approved plans, according to the Council. 10 The general locality is dominated by existing, or partially constructed, large detached dwellings, partly two/partly three storeys, including basement garages of various designs and roof forms. Issues Raised Statement of Issues 11 Not all the issues in the statement of issues filed by the Respondent were in issue at the hearing. Some issues were also able to be dealt with by way of imposing conditions. The relevant issues are: … 2. The proposed development is excessive in its height and scale relative to the surrounding development and the development potential of the surrounding land so as to create adverse visual impacts upon surrounding development. Particulars The subject site is zoned Zone No 2(a) (Residential "A" Zone) under Woollahra Local Environmental Plan 1995. Residential flat buildings are prohibited however the proposal has the benefit of existing use rights.

The surrounding land is subject to a height control of 9.5 metres a FSR of 0.55:1. The proposed development is 12.8 metres and has a proposed FSR of 1.06:1. 3. The proposed development is contrary to the objectives of the Zone No 2(a) (Residential "A" zone). Particulars The zone objective 3(a) is to maintain the amenity and existing characteristics of areas predominantly characterised by dwelling houses.

4. The proposed development fails to comply with the design quality principles outlined in State Environmental Planning Policy No 65 in terms of: context, scale and built form. Particulars The proposed development is situated in an area which is predominantly single dwelling houses of 2 to 3 storeys in height. The proposed residential flat building is situated approximately 10.7 metres above the street level and is 4 storeys in height. The elevated position exacerbates the scale of the proposal from Wentworth Road and Sydney Harbour.

5. The proposed development is excessive in its height and scale so as to maintain and exacerbate significant overshadowing of the adjoining property, 1 Chapel Road, Vaucluse. Particulars The existing building on the subject site overshadows the adjoining property and the proposed development will add to the degree of overshadowing which result in an unreasonable amount of overshadowing to the adjoining yard.

6. The proposed development is excessive in its height so as to maintain and exacerbate loss of visual and acoustic privacy on the adjoining properties, 1 Chapel Road, Vaucluse, 97 Wentworth Road and 38 and 40 Fitzwilliam Road, Vaucluse. Particulars The existing building on the subject site has adverse privacy impacts on adjoining properties. The addition of a greater number of terraces at a higher level (and in additional locations) will result in an unreasonable loss of privacy both visually and aurally.

7. The inappropriate location of the garbage/recycling storage area (and lack of screening) will have a detrimental effect on the visual amenity of the streetscape of Wentworth Road, Vaucluse. …

9. The inadequate setbacks of the pathway/pergola from the south eastern boundary … will have a detrimental effect on the aural and visual privacy of 1 Chapel Road, Vaucluse …. Existing use rights legislation/planning principles 12 The existing residential flat building is prohibited in the Residential 2(a) zone under the Woollahra Local Environmental Plan 1995 ("the Woollahra LEP 1995"). This development application (No. 778/2004) for a new residential flat building relies upon existing use rights regulated under s 107 and s 108 of the Environmental Planning and Assessment Act 1979 ("the EP&A Act") and cl 40-43 of the Environmental Planning and Assessment Regulation 2000 ("the Regulation"). 13 Section 107 of the EP&A Act provides: (1) Except where expressly provided in this Act, nothing in this Act or an environmental planning instrument prevents the continuance of an existing use. (2) Nothing in subsection (1) authorises: (a) any alteration or extension to or rebuilding of a building or work, or (b) any increase in the area of the use made of a building, work or land from the area actually physically and lawfully used immediately before the coming into operation of the instrument therein mentioned, or (c) without affecting paragraph (a) or (b), any enlargement or expansion or intensification of an existing use, or … (3) Without limiting the generality of subsection (2) (e), a use is to be presumed, unless the contrary is established, to be abandoned if it ceases to be actually so used for a continuous period of 12 months. 14 Section 108(3) of the EP&A Act states that the provisions of any environmental planning instrument that derogate from the existing use rights provisions have no force or effect whilst existing use rights remain. Section 108 of the EP&A Act provides: (1) The regulations may make provision for or with respect to existing use and, in particular, for or with respect to: (a) the carrying out of alterations or extensions to or the rebuilding of a building or work being used for an existing use, and (b) the change of an existing use to another use, and (c) the enlargement or expansion or intensification of an existing use. (2) The provisions (in this section referred to as the incorporated provisions ) of any regulations in force for the purposes of subsection (1) are taken to be incorporated in every environmental planning instrument. (3) An environmental planning instrument may, in accordance with this Act, contain provisions extending, expanding or supplementing the incorporated provisions, but any provisions (other than incorporated provisions) in such an instrument that, but for this subsection, would derogate or have the effect of derogating from the incorporated provisions have no force or effect while the incorporated provisions remain in force. … 15 Clause 41(1) of the Regulation in force at the relevant time stated that: An existing use may: (a) be enlarged, expanded or intensified; or (b) be altered or extended; (c) be rebuilt; (d) be changed to another use, including a use that would otherwise be prohibited under the Act. 16 Clause 44 of the Regulation provides: (1) Development consent is required for any rebuilding of a building or work used for an existing use. (2) The rebuilding: (a) must be for the existing use of the building or work and for no other use, and (b) must be carried out only on the land on which the building or work was erected or carried out immediately before the relevant date. 17 These regulations incorporated provisions as provided by s 108(2) and are therefore part of every environmental planning instrument. Legislation relevant to merits review 18 Section 79C of the EP&A Act provides: (1) Matters for consideration - general In determining a development application, a consent authority is to take into consideration such of the following matters as are of relevance to the development the subject of the development application: ( a) the provisions of

(i) an environmental planning instrument … (iii) any development control plan, and

(b) the likely impacts of that development, including environmental impacts on both the natural and built environments, and social and economic impacts in the locality, (c) the suitability of the site for the development, (d) any submissions made in accordance with this Act or the regulations, (e) the public interest. SEPP 65 - Design Quality of Residential Flat Building 19 The aim of State Environmental Planning Policy No 65 ("SEPP 65") is to improve the design quality of residential flat development in New South Wales (cl 2(1)). SEPP 65 contains design quality principles related to the following: (i) Context (ii) Scale (iii) Built form (iv) Density (v) Resource, energy and water efficiency (vi) Landscape (vii) Amenity (viii) Safety and security (ix) Social dimensions (x) Aesthetics

20 The issue arose as to whether SEPP 65 can apply at all in this merits review. The Applicant argued it cannot apply because of s 108(3) of the EP&A Act. The Council argued that as SEPP 65 contains design principles, it can and should apply.

21 Sydney Regional Environmental Plan 23 (Sydney and Middle Harbours) ("SREP 23") (repealed 28 September 2005) required consideration of the visual impact of the proposal when viewed from Sydney Harbour. Clause 3 of SREP 23 states that the plan applies to land shown edged in heavy black on the map which accompanies the plan. The land the subject of this appeal is within that marking. Clause 2(f) of the SREP states that in relation to the visual environment to which the plan applies, an objective of the plan is: (i) to protect and enhance the landscape and special scenic qualities of the Harbours, and (ii) to ensure that adequate consideration is given to the visual impact of development…

22 Under cl 18(a) a consent authority must not consent to the carrying out of development on land to which the plan applies unless it is satisfied that the proposed development is consistent with the appearance of development from the waterway and foreshores.

23 Adopting the court appointed expert's report, the Council argued that this could also be relied on in the merits review in this matter. The Applicant argued SREP 23 could not apply in light of s 108(3).

Planning principles 24 Planning principles in relation to the assessment of development applications based on existing use rights were stated by Senior Commissioner Roseth in Fodor Investments v Hornsby Shire Council (2005) 141 LGERA 14 at 17 as follows:

Four questions usually arise in the assessment of existing use rights developments, namely: · How do the bulk and scale (as expressed by height, floor space ratio and setbacks) of the proposal relate to what is permissible on surrounding sites? (Principle 1)

While planning controls, such as height, floor space ratio and setbacks do not apply to sites with existing use rights; they have relevance to the assessment of applications on such sites. This is because the controls apply to surrounding sites and indicate the kind of development that can be expected if and when surrounding sites are redeveloped. The relationship of new development to its existing and likely future context is a matter to be considered in all planning assessment…

· What is the relevance of the building in which the existing use [sic] takes place? (Principle 2)

Where the change of use is proposed within an existing building, the bulk and scale of that building are likely to be deemed acceptable, even if the building is out of scale with its surroundings, because it already exists. However, where the existing building is proposed for demolition, while its bulk is clearly an important consideration, there is no automatic entitlement to another building of the same floor space ratio, height or parking provision…

· What are the impacts on adjoining land? (Principle 3)

The impact on adjoining land should be assessed for all development. It is true that where, for example, a development control plan requires three hours of sunlight to be maintained in adjoining rear yards, the numerical control does not apply. However, the overshadowing impact on adjoining rear yards should be reasonable…

Internal amenity must be assessed as it is assessed for all development. Again, numerical requirements for sunlight access or private open space do not apply, but these and other aspects must be judged acceptable as a matter of good planning and design. None of the legal principles discussed above suggests that development on sites with existing use rights have lower amenity than development generally.

Residents' Objections 25 Local residents raised the following issues: (i) loss of privacy (ii) overshadowing (iii) construction management issues (these can be dealt with by imposing conditions) (iv) removal of a significant tree (Norfolk Island Pine) (v) excessive gross floor area (vi) excessive height, bulk and scale (vii) inappropriate character (viii) excessive number of storeys (ix) inadequate landscaping (x) excessive fill adjacent common boundary with 1 Chapel Road (xi) inadequate front setback

Specific objectors' concerns Wadsworth Residence, 1 Chapel Road 26 The residents of 1 Chapel Road, Vaucluse, which adjoins the subject property were concerned about loss of privacy and overshadowing, and noise and visual impacts. 27 The Applicant argued the future position of this property in relation to these issues would be improved by the development. The building is stepped in on the side facing this property and would present well given the building design which includes planting at the second and third levels. Screens on the new development would reduce noise impacts. Concerns about the shadow impact are mitigated in part at least by the fact that a well-lit terrace at the front of the property with water views exists, which will remain unaffected by shadow impacts and solar access.

Mrs Goddard, 97 Wentworth Road 28 Next door at 97 Wentworth Road, Vaucluse, the resident objector was concerned about overlooking and visual impact from the increased bulk of the development. 29 The court appointed expert was of the opinion that no design change was required in this regard. Mrs Goddard's property is already overlooked by the current building on the subject property, and other properties. Oversight from the balconies (as now proposed) would be addressed by planter boxes and reduced terrace areas.

Mrs Fern, 66 Wentworth Road 30 At 66 Wentworth Road, on the opposite side of the street to the subject property, the resident was concerned about overlooking and, to a lesser extent, shadowing from the development on parts of her front garden. Shadow diagrams suggest that shadowing would affect only a small part of her garden on the worst day of the year whilst the rest of her property would remain in full sun. The proposal is at a considerable distance from her property and I do not consider her concerns about overlooking justify refusal of the development application.

Triguboff residence, 72 Wentworth Road 31 Directly opposite the subject property, at 72 Wentworth Road, Vaucluse, the residents were concerned about overlooking and the visual impact of the property as viewed from a courtyard at the front of the property and a study inside. The distance of separation from the courtyard in question and the subject site was estimated by Mr Sheils to be approximately 70m. 32 The Applicant submitted there was more than adequate separation from the proposed building, and I agree.

Pfeiffer residence, 40 Fitzwilliam Road 33 Concerns were raised about oversight from the second and third storey terraces. Noise from the proposed lap pool was also of concern but the pool is no longer proposed. 34 The Applicant argued the latest modifications to the plan with reduced terrace sizes and more screening alleviated the concerns.

Mr Rolfe 35 Mr Michael Rolfe attended as the secretary of the Sydney Harbour and Foreshores Committee. The Sydney Harbour and Foreshores Committee was founded in August 1979, with the aim of protecting and enhancing Sydney Harbour. Its membership includes local councils and interested members of the public. In a letter from Mr Rolfe to the General Manager of Woollahra Municipal Council, dated 19 February 2006, the Committee lodged an objection to the proposed development, stating that it supported the Council refusing of the development application. It argued that the pitched and hipped roof of the existing building tends to reduce the visual impact of the building as viewed from the Harbour, whereas the height, bulk and enlarged envelope of the proposed building would increase the visual impact of the building. 36 The Applicant submitted the Committee has never seen the relevant plans and never visited the site. Its submissions should therefore be given little weight.

Planning evidence 37 Mr Neal Ingham was the court appointed planning expert. His report analysed issue 2 in the statement of issues (excessive height/scale) on the basis of the planning principles in Fodor. At page 6 of his report dated 30 March 2006, he noted that the visual impact of the site and the locality of the development are of "significant prominence containing a bulk and scale which is visually greater than its neighbours and uncharacteristic of buildings in this immediate locality". He stated at p 7 that the "proposed development has a bulk, scale and appearance which takes it beyond the existing building". It would present as a residential flat building whereas the existing building is more akin to a dwelling house in character. Mr Ingham concluded (at p 17 of his report): …it is my opinion that the proposed development has a bulk and scale which is inappropriate on this site and in this locality. Not only is the proposed development of a greater floor space than the existing building but the proposed development extends beyond it in a number of different areas creating additional bulk. While the roof of the proposal has been lowered by 1.5 metres where the existing ridge occurs the proposed development has a flat roof which is dissimilar to the existing pitched roof form of building and the extent of that flat roof goes well beyond the envelope of the existing building…It is my opinion that the building as proposed is one storey too high. 38 In relation to issue 3 (contrary to zone objectives - see par 11) Mr Ingham considered the zone objectives of the Residential 2A zone in relation to the surrounding area and held that the proposed building would be very prominent. 39 In relation to issue 4 (compliance with SEPP 65 - Design Quality Guidelines for Residential Flat Building - see par 11) Mr Ingham considered Principle 1 of SEPP 65, which relates to the context of a building and the way in which new buildings contribute to the quality and identity of an area. He concluded that the bulk and scale of the building would not contribute positively to the quality and identity of the area. The building would be physically larger and have a greater visual impact on the locality than the existing building. 40 The building would clearly have an impact on views from the harbour and be larger than others in the locality. The only comparable buildings are the Wentworth Chapel and church located on the same ridgeline slightly further to the east. The church is a local heritage item and is expected to be prominent. Mr Ingham stated that the provisions of SREP 23 required that there be consideration of the visual impact of the proposed development from the harbour. 41 SEPP 65 Principle 2 states that good design provides an appropriate scale in terms of the bulk and height which suits the scale of the street and surrounding buildings. Mr Ingham considered the building as proposed would not be appropriate in scale and its bulk and height need to be reduced to bring about a more compatible height and bulk. This approach is also in accordance with the first principle in Fodor, according to Mr Ingham. 42 Under SEPP 65 Principle 3 in relation to built form, Mr Ingham considered the built form was appropriate for a residential flat building set amongst other residential flat buildings, but in the context of this site the physical form would not fit well. Principle 4 states that good design has a density appropriate for a site and its context. Mr Ingham considered that the proposed development extends the density of the development in terms of floor space and provides a building which would not be compatible with adjacent dwelling houses, having regard to the prominence and the context of the site. The reduction in the number of units in the proposed building would have no bearing upon the appropriateness of the proposal. He did not provide any view in relation to Principle 5 concerning resources, energy and water efficiency. 43 Mr Ingham did not express any concern in relation to landscaping under Principle 6, or safety and security under Principle 8. Under internal amenity, Principle 7, he considered there to be good internal amenity. In relation to Principle 10 concerning aesthetics he considered the only issue was bulk and scale. The use of the building is appropriate and the internal design and structure appropriate. Overall he disagreed with Mr Shiels' assessment in relation to issues 1, 2, 3 and 4 of SEPP 65. 44 In relation to issue 5 (see par 11) in the statement of issues concerning the impacts on 1 Chapel Road, particularly overshadowing, Mr Ingham expressed concern that the extensive overshadowing by the existing building would be greatly exacerbated by the proposal. The greater extent of overshadowing was made clearer in amended shadow diagrams. The minimal winter sun now enjoyed on the rear pool area would be substantially reduced. This impact he considered to be unreasonable. 45 In relation to issue 6, (excessive height - see par 11), Mr Ingham considered the relationship of the proposed building with 40, 38 and 32 Fitzwilliam Road to be satisfactory. The major impact would be on 1 Chapel Road due to the increase in overshadowing on the rear yard. 46 In relation to issues 7 and 9 (par 11) in the statement of issues, any issues pertaining to the garbage and recycling area, and the pathway/pergola on the south-eastern side of the building, could be resolved by imposing conditions of consent requiring a 2m high screen fence be erected and adequate landscaping. 47 Mr Shiels, planner, appeared on behalf of the Applicant and provided a written report.

48 In relation to issue 2, (height/scale), Mr Shiels stated that in his opinion, the existing building presents as a boarding house or residential flat building. He stated that the proposal needs to be considered on its merits and in light of the scale and bulk of the existing building. In his opinion, the proposal presents a structure of less height, similar scale and less visual impact than the existing building, and would not have any significant impact on the adjoining properties.

49 In relation to issue 3 (contrary to zone objectives), Mr Shiels stated that because of existing use rights attached to the site it is both unreasonable and highly unlikely to suggest that one day the existing building would be replaced with a single dwelling. Therefore, given that the existing building would be likely to be replaced with another residential flat building, these aspects should be considered against the prospects of retaining and refurbishing a poor quality building with no ecological sustainable development merits and few redeeming visual benefits, if the proposal would result in a better design solution for the site.

50 In relation to issue 4 (compliance with SEPP 65 - Residential Flat Building) Mr Shiels, in his evidence in reply, stated that it was his understanding that SEPP 65 did not apply because of the existing use rights. He therefore initially expressed no opinion on this issue.

51 He nevertheless prepared a report in relation to SEPP 65 to respond to Mr Ingham's assessment. Mr Shiels stated that the high price of land in the area has meant buildings are more often than not replaced by bigger and grander structures, as evident in the buildings presently being constructed at 38 Fitzwilliam Road and 99 Wentworth Road. He stated that the proposal offered an improved contextual relationship to the site and surrounding area, with articulated features enhancing the building's appearance. He also stated that the height of the proposal is 1.5m lower than the existing building, with increased setbacks on all boundaries and the opportunity for increased landscaping. Density would be increased from a floor space ratio of 0.89:1 to 1:1, however this would be offset by the number of units being reduced from six to four, with fewer occupants. The new building has been designed with energy efficiency and water conservation features. There would be improved amenity with increased visual and acoustic privacy for residents, and only a very small amount of additional shadowing on neighbouring properties would be created. Mr Shiels concludes: …My opinion is that the proposal will be in context with its environment. Also, it will result in a substantial improvement when compared with the existing structure…the scale and built form of the proposal is acceptable…the built form of the proposal will also provide for an articulated, well designed building that offers a mix of concrete and non-reflective glazing in colour tones that will blend in with the environment. This is also in contrast with the existing building which has stark colours and unfortunate proportions. The proposal will provide for a high level of amenity for future residents, while also maintaining the amenity of residents residing in adjoining dwellings…privacy is maintained and indeed improved. The building has also included sustainable design principles.

52 In relation to issue 5 (height, scale and overshadowing), Mr Shiels stated that the proposed development provides for a satisfactory relationship with 1 Chapel Road. Since 1 Chapel Road is located in a valley below road level, any building located at 95 Wentworth Road is likely to have some shadow impact on it. The shadow diagrams for the proposed building show little change in the shadow cast as a result of the proposed development. His opinion was that the height and scale of the proposed building would make no significant difference to overshadowing of 1 Chapel Road.

53 In relation to issue 6 (excessive height and its impact on privacy), Mr Shiels stated that the proposed building would preclude oversight of 1 Chapel Road by providing opaque glazing and screening. He stated that 1 Chapel Road's privacy would also be improved by existing landscaping on the south-eastern side of the property. Mr Ingham and Mr Shiels both agreed that the loss of privacy is not so significant as to warrant a change to the proposed development.

54 In relation to issue 7 (the garbage area), Mr Shiels agreed with Mr Ingham that the proposal, by providing for a screened garbage storage and recycling area, would considerably improve the current method of garbage storage on the site.

55 In relation to issue 9 (setbacks and aural and visual privacy), Mr Shiels considered that a fence on the common boundary between the subject site and 38 and 40 Fitzwilliam Road would eliminate potential privacy issues. Whereas Mr Ingham had recommended a privacy screen along the stairs and pathway to the south-eastern side of the development, Mr Shiels considered that that access would be for emergency use only, and likely to be used in a limited way by residents. However notwithstanding this he did not oppose a privacy screen in that area. Council's submissions 56 The Council accepts that the site has existing use rights. However it adopted Mr Ingham's report and argued that the development application should be refused. The proposed building is too big and should be lower by one storey. The question is whether the proposed application should be approved on its merits. While having existing use rights means the Applicant is entitled to seek development consent to rebuild, and whilst the Court has power to grant that consent, it is under no duty or obligation to do so. The Council argued that this is a development application like all others. Section 79C of the EP&A Act applies to it, in particular, s 79C(1)(b), regarding the likely impacts of the development. The Council argued that the Applicant's submission that the incorporated provisions in the EP&A Act mean that they can be held to a lesser standard is without legal basis. There is no express or implied legal provision entitling the Applicant to a less satisfactory form of development than is usually the case.

57 The Council relied on the decision of Senior Commissioner Roseth in Fodor particularly where the Commissioner stated in Principle 2 that: …where the existing building is proposed for demolition, whilst its bulk is clearly an important consideration, there is no automatic entitlement to another building of the same floor space ratio, height or parking provision. 58 The Council submitted that this principle is correct. If there is no automatic entitlement to another building of the same size, then it follows that there can be no automatic entitlement to a larger building. There is no case law which suggests that existing use rights allow for a larger building to be built on the site and in any case, there are ways to improve existing buildings apart from demolition and reconstruction, such as renovation. Here, the proposed building is too big, too visually dominant, and out of context in the surrounding area. The site is in a Residential A zone and surrounded by dwelling houses. The Council did not dispute the usual height limit of the area does not apply to the subject site because of existing use rights, it argued that even a building built to conform with current controls would be very high when viewed from the street frontage, because of the 10.4m gap between the natural ground level and the start of the proposed building. 59 The residents' objections have been partially but not completely met by the amended plans. The Goddard residence (97 Wentworth Road) would still be overlooked. The Pfeiffer residence (40 Fitzwilliam Road) would still be overlooked by the second and third floor bedrooms and the dining areas of the second floor of the building. The Wadsworth residence at 1 Chapel Road would be impacted most, with increased overshadowing and an unattractive view of the building. Removing one storey of the building would greatly reduce these impacts.

60 Regarding the application of SEPP 65 to the proposed development, the Council submitted that in accordance with s 108(3) of the EP&A Act, an environmental planning instrument may contain provisions extending or supplementing the incorporated provisions, and that this is the effect of SEPP 65. Part 2 of SEPP 65, which sets out principles of design quality, supplements the incorporated provisions. The Court's obligation to assess the proposal under s 79C is aided by reference to SEPP 65. Because s 79C is widely drafted, some more specific guidance is needed and is provided by Part 2 of SEPP 65.

Applicant's submissions Legal effect of existing use rights 61 The Applicant accepted that its proposal should be assessed under s 79C but emphasised that it had existing use rights which may not be derogated from; see Lloyd J in Fabcot Pty Ltd v Hawkesbury City Council (1997) 93 LGERA 373; Carden v Willoughby Municipal Council (1985) 56 LGRA 366. The Applicant argued that the effect of s 108(3) of the Act is that nothing in an environmental planning instrument (here Woollahra LEP) may derogate from the "incorporated provisions" (Carden per Kirby J at 368; Kremer & Associates v North Sydney Municipal Council (1982) 47 LGRA 209 per McClelland J at 219). The object of existing use provisions in town planning legislation is to permit the continuation of the use of land for any purpose for which it was used immediately before the passing of the legislation, even though the terms of the legislation prohibit that purpose wholly or partly or upon conditions. Existing use rights have always been required to be "liberally construed" (Parramatta City Council v Brickworks Ltd (1972) 128 CLR 1 at 25) and it would be unjust to deprive an owner of the right to use his land for an existing purpose (Royal Agricultural Society of New South Wales v Sydney City Council (1987) 61 LGRA 305, McHugh JA, Hope JA and Samuels JA concurring, at 309-310).

62 Because existing use provisions are incompatible with the main objects of the legislation of which they form part, the courts have had to develop principles which reconcile the right of owners to have the full benefit of the existing use of land with the right of the local authority to enforce the conflicting objectives of town planning legislation. See North Sydney Municipal Council v Boyts Radio and Electrical Pty Ltd (1989) 16 NSWLR 50, and Royal Agricultural Society of New South Wales. 63 The Applicant relied on Mobil Oil Australia v Ku-ring-gai Municipal Council (1990) 70 LGRA 419, where Stein J held at 423 that: In my opinion existing uses were not intended to be penalised because they became non-conforming. Rather, applications to rebuild or to change the use should be assessed in the ordinary fashion by the application of the [s 79C] heads of consideration… [and] in the light of the provisions contained in [cl 108] of the Regulation…

64 The Applicant argued that s 74C of the Act also applied because there was reliance on the Woollahra Residential Development Control Plan 2003 ("the DCP"). It provides: … (5) A provision of a development control plan (whenever made) has no effect to the extent that: (a) it is the same or substantially the same as the provision of an environmental planning instrument applying to the same land, or (b) it is inconsistent with a provision of any such instrument or its application prevents compliance with a provision of any such instrument.

Therefore, since environmental planning instruments are all deemed to contain the incorporated provisions, if the DCP contains inconsistent provisions or provisions that derogate from the incorporated provisions, these would not apply in this case.

Why Fodor is wrong 65 The Applicant argued that the principles in Fodor are wrong in law and should not be followed. The Applicant argued in relation to Principle 1, that the objectives of the zone cannot be used to restrict the outcome of the application. The fact that other sites are subject to controls cannot mean that those controls are indirectly relevant to the subject site. Section 79C(1)(a) is expressed to apply only to "the land to which the development application relates". As these controls derogate (and were never intended to apply to the subject development, it being prohibited in the zone), the provisions of the instrument do not apply directly or indirectly.

66 Principle 2 adds nothing to the relevant body of law or planning experience. Clause 44 of the Regulation states that there is a right to apply to rebuild with consent. While there is no automatic entitlement to rebuild, if a building with existing use rights were to be destroyed by fire, it is difficult to foresee that its rebuilding could be opposed where there was the same floor space ratio, height or parking provision and internal amenity, contrary to Principle 4 in Fodor.

67 Principle 3 appears to acknowledge that the provisions of a DCP have no relevance and that the assessment is one based upon reasonableness. This is correct. The DCP provisions do not act as a guide as to what is reasonable. That would indirectly bring into consideration provisions of the DCP which are of no legal relevance. 68 Principle 4 is wrong. Internal amenity is not to be assessed in the case of existing use as it is assessed for other development because the usual numerical controls in planning instruments do not apply. The reference to matters of good planning and design in Principle 4 is unclear and is legally flawed if this leads to the application of numerical controls in a planning instrument. Applicant's merits arguments 69 The relevant matters for consideration under s 79C of the Act are: (a) any environmental planning instrument to the extent that it does not derogate from the existing use; (b) the likely impacts of that development, including environmental impacts on both the natural and built environments, and social and economic impacts in the locality; (c) the suitability of the site for the development; (d) any submissions made in accordance with this Act or the Regulation, and; (e) the public interest. 70 Mr Booth, the Council officer (Exhibit 7, tab 9) who originally assessed the development application, assessed it against the provisions of SEPP 55 and State Environmental Planning Policy No 56 ("SEPP 56"), Sydney Regional Environmental Plan (Sydney Harbour Catchment) 2005, draft SREP (Sydney Harbour Catchment) 2005, SREP 23, Woollahra LEP 1995 and the Woollahra DCP. Mr Booth found that the application did not meet the aims and objectives of a number of these instruments. Therefore, he recommended the application be refused. The provisions of these instruments derogate from existing use rights and therefore do not apply here. Zone objectives are only relevant in the case of permissible development. These matters were irrelevant considerations under s 79C and therefore the Council officer's assessment was legally flawed (Minister for Aboriginal Affairs and Anor v Peko-Wallsend (1986) 162 CLR 24).

71 The assessment of the court appointed expert, Mr Ingham (Exhibit 11), was also legally flawed. He assessed the application against SEPP 65. He stated that: The provisions of SEPP 65 apply to all residential flat buildings whether they are proposed under existing use rights or not and the devolution of planning standards relates to those that are embraced by the particular zone within which the development application is made. 72 Mr Ingham also considered the application against the SREP 23 and the 1995 Woollahra LEP. The Applicant further submitted that Mr Ingham, in his assessment, was guided by the planning principles in Fodor which are incorrect and inapplicable.

73 The Applicant argued that were Fodor found to be correctly decided, the application should still be approved. Firstly, the nearby developments being carried out at 38 Fitzwilliam Road and at 99 Wentworth Road are reflective of contemporary developments that the Council sees as appropriate in the area. The appearance and bulk of nearby 99 Wentworth Road is equally as prominent as the subject proposal when viewed from the harbour and street and it has no existing use rights for a residential flat building. It appears to have four levels and is built very close to the street. The building under construction at 38 Fitzwilliam Road is higher than the proposed development, appears to have six levels and is prominent when viewed from the street. 74 The Applicant argued that Mr Shiels assessed the application correctly. His report addressed the merits of the application not by reference to any planning instruments, but by comparison with what is to be replaced. The correct merits review approach is to assess how the proposal compares with the existing development having regard to the relevant matters in s 79C.

75 In an appendix to its submissions, the Applicant attached a table of comparisons between the current building on the subject site and the proposed building. The table states that the proposed building would be lower than the current building by 1.5m. It would have a smaller footprint, reduced in size from 428.5m2 to 391.88m2. The setbacks are to be increased for the new building on the front, side and rear boundaries of the property, an improvement on the minimal setbacks currently existing. 76 In terms of visual impact, the proposed building would not be inconsistent with the single detached dwellings currently under construction at 38 Fitzwilliam Road and 99 Wentworth Road. The new design incorporates masonry, glazing and subdued tonings with contoured balconies to provide a visually attractive building, unlike the current one, with its starkly contrasting colours. It proposes improvement to setbacks, streetscape, car parking numbers, amenities and safety and security. There are fewer bedrooms and units proposed than in the current building. The resource and energy efficiency of the building would be improved, as would its aesthetic appearance and landscaping. The new building would also provide disabled access, unlike the current one. Applicant's submissions on objector's evidence 77 The Applicant argued that the final amendments made to the plans during the hearing resulted in the proposed building having little additional impact on the neighbouring properties. To the extent there were impacts, they did not warrant refusal. Finding 78 Cases relied on by the Applicant to argue that existing use rights should be liberally construed, such as Brickworks and Royal Agricultural Society of NSW, are concerned with the characterisation of an existing use. This case however concerns an application to build a new building in which to continue an existing use. The existing use right preserved by s 107(1) of the EP&A Act is the right to continue in the existing building given s 107(2)(a) which states that s 107(1) does not authorise reconstruction of a building or work. Section 108 provides that regulations may be made to allow, inter alia, the rebuilding of a building and this is provided by cl 41(1)(c) and cl 44 of the Regulation. There is no entitlement to development consent for a new building, only an entitlement to apply for development consent to rebuild. The parties agree that this development application must be assessed under s 79C albeit in accordance with s 108(3). 79 Section 79C(1)(a) requires that a consent authority must take into account the provisions of an environmental planning instrument. As is clear from s 108(1) and (2) any regulations made pursuant to subsection (1) which enable a development application to be made for the alteration, extension or rebuilding of a building being used for an existing use, are deemed to be incorporated into every environmental planning instrument. The definition of environmental planning instrument is s 4 of the EP&A Act includes SEPPs, REPs and LEPs. Clauses 41 and 44 of the Regulation are therefore considered to be incorporated into the LEP. Section 108(3) then states that no provision of the environmental planning instrument which would derogate from these incorporated provisions allowing, inter alia, the rebuilding for an existing use, can apply. 80 The Applicant relied on the decision of Lloyd J in Fabcot, where the meaning of derogation was elucidated. Lloyd J held at 378 that: Section 108(3) uses the word "derogate" the ordinary meaning of which is "to repeal or abrogate in part; to destroy or impact the force or effect of; to lessen the extent of; to detract from; to disparage, to depreciate"…The relevant provisions of the environmental planning instrument in this case…would clearly derogate from the incorporated provisions. Accordingly, those provisions of the local environmental plan have no force or effect. However, it is only those provisions of the local environmental plan which would derogate or have the effect of derogating from the incorporated provisions which have no force or effect.

Since the provisions of the environmental planning instrument on which the respondent relied…derogate from the incorporated provisions, it follows that none of those grounds are relevant. They purport to rely on provisions of the local environmental plan which have "no force or effect" (s 108(3) of the Act). 81 That decision dealt with the application of s 108(3) and is relevant to consider in relation to s 79C(1)(a) which refers to the requirement to take into account an environmental planning instrument and a development control plan when assessing a development application. Issue 3 in the Council's statement of issues (par 11 - contrary to zone objectives) cannot be relied on as it clearly applies the LEP in a way which derogates from the existing use rights, as was found in Fabcot. Issue 2 (excessive height/scale) as stated in the first paragraph of the statement of issues clearly arises in a merits review under s 79C(1)(b) and (c), given the physical surroundings of the site. To the extent that the particulars to issue 2 raise the provisions of the LEP in relation to the height and floor space ratio limits, as the Particulars in the statement of issues do (par 11), these cannot be applied to the development application. Issue 4 raises non-compliance with SEPP 65 and given that s 108(3) applies to environmental planning instruments including SEPPs this issue may also not be maintainable and I will discuss this shortly. 82 In the absence of the usual considerations which apply by virtue of the application of a local environment plan or development control plan, the merit assessment of the development application which must be undertaken under s 79C of the EP&A Act must apply well recognised town planning principles. At par 18 above, the applicable parts of s 79C are set out, that is, s 79C(1)(a)(i), (ii), (b), (c), (d) and (e). While the Applicant argued that cases such as Mobil Oil (see par 61 above), and Berowra RSL Community and Bowling Club Ltd (2000) 114 LGERA 345 set out the relevant principles to apply when assessing an existing use, the principles in these cases are broadly that there must be an assessment "in the ordinary fashion" made under s 79C. Given the broad provisions of that section that is general guidance only. Of particular relevance to this case are s 79C(1)(b) and (c) concerning the likely impact of the development on the natural and built environment and the suitability of the site for the development.

Operation of planning principles in Fodor 83 The Senior Commissioner has stated that planning principles are designed to assist in reaching a decision in a particular case relating to issues which frequently arise in merit cases. Planning principles are not legally binding. In Segal and Another v Waverley Council (2005) 64 NSWLR 177 Tobias JA stated at [16]: In a paper delivered to a Joint Conference of the Land and Environment Court and the Victorian Civil and Administrative Tribunal on 6 May 2005, Dr John Roseth, the Senior Commissioner of the Court, observed under the heading "Establishing planning principles": "There are ten commissioners in the Court, and all commissioners initiate planning principles as they come across issues that, in their opinion, have general application. Since a planning principle published in a judgment obliges commissioners dealing with similar issues to, at least, consider the principles established earlier, the commissioners find it useful to consult with each other. The practice is to circulate the principle in draft form and invite the others to comment, amend, delete or add to the draft version. Comments from other commissioners are a particularly useful test." 84 Tobias JA further stated at [95]-[96] that: I am in no way convinced that in the context of adversarial proceedings in the Land and Environment Court, there is any place for the so-called principle of consistency in administrative decision-making…that concept is more appropriately applied to true administrative decision-making at the level of executive or local government. It has no application to adversarial proceedings where the merits of any particular application depend upon the facts and circumstances of the case and the substantive issues joined between the parties. My only qualification to the foregoing, at least in the context of environmen­tal planning, is that consistency in the application of planning principles is, clearly, a desirable objective. This has been recognised by the Commissioners of the Land and Environment Court … 85 As noted in Fodor by Senior Commissioner Roseth at [16] a number of cases identify what must not be considered in relation to the assessment of development applications relying on existing use rights but are silent on what matters should inform such an assessment. As already stated general town planning principles apply to the assessment of a development application under s 79C. Fodor is an attempt to provide planning principles for the assessment of proposals on land with existing use rights, which can guide that assessment under s 79C. 86 As the planning principles in Fodor are not legally binding it is not strictly correct for the Applicant to argue that they are illegal. The planning principles are intended as guidelines to assist resolution of issues that commonly arise in merits review cases. They must not be applied if they result in the misapplication of the EP&A Act provisions concerning existing use rights, such as s 108(3). Consideration of the Fodor planning principles requires a consideration of what is the appropriate approach to a merits review of a development application for rebuilding relying on existing use rights. Contrary to Principle 2 in Fodor, the Applicant submitted that an existing use rights owner can expect he/she can replace the existing use relied on so that is the initial starting point or "baseline" for a merit assessment. If not, the existing use right will be derogated from. The word "derogate" only appears in s 108(3) in relation to provisions in an environmental planning instrument. 87 The Applicant therefore argued that a merits review for the proposed new building should only be an assessment of the proposed building against what is being replaced. The Applicant is entitled to have its existing use approved, albeit in a new building. That submission is not supported by s 107 and s 108 of the EP&A Act. If s 107(1) and (2) are considered there is no presumption that an existing use which can continue under s 107(1) can be rebuilt (see ss(2)(a)). The Act by virtue of s 108(1) provides that regulations may be made enabling the application for development consent to rebuild a building being used for an existing use. This has been provided for by cl 41 and cl 44 of the Regulation which require that development consent be obtained for the rebuilding. There is no entitlement to a development consent for a rebuilding, only an entitlement to make a development application. No case to which I have been referred has said that in the assessment of a development application to rebuild or intensify an existing use it is a given that the new proposal must be assessed as against what it replaces to determine if it is satisfactory. Principle 2 in Fodor states that where an existing building is proposed for demolition there is no automatic entitlement to another building of the same floor space ratio, height or parking provision. That is correct in my view, given the provisions of the EP&A Act I have outlined. If a merit assessment under s 79C is applied to a new building which is a rebuilding for the purposes of continuing an existing use, it is possible that the existing use holder will not be allowed to build something identical to that which already exists if a merits assessment results in the conclusion that the impacts under s 79C are unacceptable. 88 That is not to say that consideration of the building intended to be replaced is irrelevant to the merit analysis under s 79C. It may well be appropriate depending on the circumstances that the building intending to be replaced is considered, and I consider it is appropriate in this case to do so. The merits assessment is not confined to that comparison only however, it is also necessary to consider the development application more broadly under s 79C. The planning principles in Fodor can assist in that consideration. 89 Principle 1 in Fodor states that it is acceptable to consider the relevant planning instruments as these apply to the area surrounding the proposed development because these determine the nature of development in that area. That principle is not inconsistent with s 108(3) as the Applicant submitted. Care must be exercised, however, against the possibility that such an assessment leads to a de facto application of standards in environmental planning instruments to the existing use rights site. Failure to comply with standards in an environmental planning instrument cannot be a consideration in the assessment of the application based on existing use rights. The same can be said in relation to Principles 3 and 4 but these can clearly otherwise apply to assist in the merit review under s 79C.

90 I do not agree that matters such as the context of the proposed development cannot be taken into account as the Applicant argued when submitting that Mr Ingham's approach was incorrect. If the assessment under s 79C is to be adequate it must consider the proposal in its surroundings, and that is clearly a fundamental part of any analysis required under s 79C(1)(b) and (c). In this case the primary issue is the bulk and scale of the development and consideration of the proposal in its surroundings which would appear necessary given the requirement of s 79C(1)(b) and (c). That is raised by issues 2 and 4 which I will deal with below.

Issues 5 and 6 statement of issues - Impacts on adjoining land (also Principle 3 Fodor) 91 The amended plans tendered on the final day of the hearing result in a number of impacts on neighbouring properties being reduced substantially from the original proposal. I consider the impact on immediate neighbouring properties is generally acceptable given the existing building. While there will be some increase in overshadowing of the rear yard of 1 Chapel Road in winter, this property already experiences substantial overshadowing from the existing building because of the much lower level at which it is built compared to the subject property. I agree with the analysis of Mr Shiels at par 51 in this regard. 92 The amended plans adequately address overlooking and acoustic privacy of other properties in my view, with the reduction in size of some balconies and increased use of privacy screens. As stated by the Applicant, at par 26, the façade of the proposed building which faces 1 Chapel Road would present favourably given the building design.

Regional environmental plans - SREP 23 93 Although not raised directly by the Council's statement of issues, the application of SREP 23 was raised. Section 108 applies to environmental planning instruments, which includes regional environmental plans in the definition in s 4 of the EP&A Act. As set out at par 20, SREP 23 required that there be consideration of the impact of a particular development on Sydney Harbour. The Applicant argued that this environmental planning instrument cannot apply to derogate from the existing use because of s 108(3), which must be correct. Issue 4 statement of issues - Failure to comply with SEPP 65 94 The different views of Mr Ingham and Mr Shiels on the application of SEPP 65 to this development are set out above at par 39-43 and 51. 95 SEPP 65 contains design principles which all residential flat buildings in New South Wales should comply with. SEPP 65 is aimed at achieving better designed residential flat buildings. Section 108(3) provides that the provisions of environmental planning instruments, which includes SEPPs, which derogate from the existing use do not have any effect in relation to existing use rights. To the extent that the SEPP contains any prescriptive requirements, these cannot be applied to derogate from the Applicant's existing use rights. Where an environmental planning instrument can inform the merit assessment to be undertaken under s 79C, then an instrument such as SEPP 65 does apply to assist in the merit assessment of a residential flat building. While I agree that s 108(3) prevents the application of SEPP 65 as a basis for refusing an application relying on existing use rights, its provisions can guide a merit assessment as it is raising matters that should otherwise be considered on a merit assessment of a residential flat building under s 79C no matter where it is located. I consider Mr Shiels analysis under SEPP 65 at par 50 is correct in the context of this case in that what is being considered is a rebuilding to enable an existing use to continue in an area where other substantial structures are being built at 38 Fitzwilliam Road and 99 Wentworth Road. I do not consider the application can be refused on this ground, but I do not agree with the Applicant's submission that SEPP 65 simply does not apply.

Issue 2 - statement of issues 96 Issue 2 in the statement of issues is the major issue to consider in relation to the merit assessment under s 79C, in that it is clearly the bulk and scale of the building which will impact on the wider surrounding area. The particulars in the statement of issues specify the applicable height and floor space ratio under the LEP but these cannot be applied as a basis for refusal. To the extent therefore this issue requires the building to be considered in its context, that context cannot be a "back door" method by which to apply the development standards in the LEP to the proposed development. 97 While I agree with Mr Ingham that the proposal would be prominent in the location as is the current residential flat building and appear to be somewhat bulkier due to the flat roof across the whole building footprint compared to the existing structure with the double storey gable roof, I consider the Applicant has confined the proposal largely within the footprint of the two buildings it is replacing. That is clear from the plans and the comparison table provided in the Applicant's submissions. Given that it is an application to rebuild, it is appropriate to be mindful of what is intended to be replaced by the rebuilding. If Mr Ingham's view that one storey should be removed is adopted, then I consider that his assessment is a de facto application of the height limits for this zone in the LEP and it is clear that s 108(3) does not allow that approach. 98 The existing building is clearly visible, as would be the proposed building, from part of Kings Road. Mr Ingham stated that on its own this would not be a reason for refusal and I agree. 99 I have set out in some detail the Applicant's submissions on the merits at par 73-76. The Applicant emphasised that the proposed development would be a modern, well-designed building with improved aesthetics compared to the existing building, which view I accept. I agree it would not be inconsistent with other dwellings under construction in the vicinity. It would provide better internal amenity than is currently provided in most of the units (an issue raised by Principle 4 in Fodor). 100 As already noted the parties' experts agree issues 7 and 9 can be dealt with by conditions of development consent. Weighing up all the different considerations and mindful that this is an application to rebuild for the purpose of existing use rights, I consider development consent should be granted subject to development consent conditions as prepared by the Council. 101 The Court will make orders which will issue separately that:

1. The appeal is upheld.
2. Development Application No 778/2004 for the demolition of the existing building and construction of a residential flat building at 95 Wentworth Road Vaucluse is determined by the granting of development consent subject to the conditions in Annexure A to the orders.
3. No order as to costs.
4. The exhibits other than Exhibit 13 and Exhibit E are returned.

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