The Trustee for SSTG Property Group v Inner West Council

Land and Environment Court (NSW)|2023-09-26

Judgment

COMMISSIONER: This is an appeal pursuant to the provisions of s 8.7(1) of the Environmental Planning and Assessment Act 1979 (EPA Act) against the refusal of Development Application No. 2022/0684 for the demolition of existing structures and the construction of a residential flat building including basement parking and landscape works (the proposal), at 77 Glassop Street, Balmain (the site), by Inner West Council (the Council).
The Court arranged a conciliation conference under s 34 of the Land and Environment Court Act 1979 (LEC Act) between the parties, which was held on 26 September 2023. I presided over the conciliation conference. At the conciliation conference, the parties reached agreement as to the terms of a decision in the proceedings that would be acceptable to the parties.
Under s 34(3) of the LEC Act, I must dispose of the proceedings in accordance with the parties' decision if the parties' decision is a decision that the Court could have made in the proper exercise of its functions. The parties' decision involves the Court exercising the function under s 4.16 of the EPA Act to grant consent to the development application.
There are preconditions to the exercise of power to grant development consent for the proposal.

Public submissions

One resident objector gave evidence at the commencement of the hearing onsite and the Court, in the company of the parties and their experts, viewed the site from two properties on the opposite side of the street. The objector's concern is that the proposal will obstruct views of the harbour from both properties as those views are across the top of the existing hipped roof on the site.
The planning experts agreed that the proposal complies with the floor space ratio (FSR) development standard of 1.18:1, and as such, the building envelope of the proposal is reasonable in all of the circumstances.

The application is amended

Inner West Council, as the relevant consent authority, has agreed under s 38(1) of the Environmental Planning and Assessment Regulation 2021 to the Applicant amending the development application in accordance with the plans and documents listed under condition 1 of the conditions of consent at Annexure A.
The Applicant is not required to lodge the amended development application on the NSW Planning Portal pursuant to s 38(4) of the Environmental Planning and Assessment Regulation 2021. The Applicant filed the amended development application with the Court on 26 September 2023.

Jurisdictional pre-conditions to the grant of consent

I am satisfied that the site is suitable for the proposal, pursuant to s 4.6 of State Environmental Planning Policy (Resilience and Hazards) 2021, as the site has a history of residential use.
Division 1 In-fill affordable housing, of Pt 2 Development for affordable housing of State Environmental Planning Policy (Housing) 2021, applies to the proposal at s 16(1). The proposal is afforded a bonus FSR of 0.5:1 under s 17. The proposal complies with the non-discretionary development standards under s 18.
State Environmental Planning Policy No 65 - Design Quality of Residential Apartment Development (SEPP 65) applies to the proposal at cl 4. I am satisfied, pursuant to cl 28(2) of SEPP 65, that the proposal is consistent with the design quality principles under SEPP 65, on the basis of the architect's statement submitted with the amended application and dated 25 September 2023.
The site is zoned R1 General Residential under the Inner West Local Environmental Plan 2022 (LEP 2022) and the proposal is permissible with consent. The objectives of the zone, to which regard must be had, are: • To provide for the housing needs of the community. • To provide for a variety of housing types and densities. • To enable other land uses that provide facilities or services to meet the day to day needs of residents. • To provide residential development that maintains the character of built and natural features in the surrounding area.
Clause 6.14 of LEP 2022 is in the following terms: 6.14 Diverse housing (1) The objective of this clause is to ensure the provision of a mix of dwelling types in residential flat buildings and mixed use development that includes shop top housing. (2) This clause applies to the following development involving at least 4 dwellings on land identified as "Area 1" on the Key Sites Map - (a) development for the purposes of residential flat buildings, (b) mixed use development that includes shop top housing. (3) Development consent must not be granted to development to which this clause applies unless - (a) at least 25% of the dwellings will be - (i) studio dwellings, or (ii) dwellings containing only 1 bedroom, and (b) no more than 30% of the dwellings will be dwellings containing at least 3 bedrooms.

Contravention of the diverse housing development standard

The proposal does not comply with cl 6.14(3)(b) of LEP 2022 as the proposal has 33.3% of dwellings with at least 3 bedrooms, being two apartments of the total of six apartments.
The Applicant provided a written request seeking to justify the contravention of the diverse housing development standard, prepared by Planning Ingenuity and dated 26 September 2023.
Clause 4.6(4) of LEP 2022 establishes preconditions that must be satisfied before a consent authority or the Court exercising the functions of a consent authority can exercise the power to grant development consent (Initial Action Pty Ltd v Woollahra Municipal Council (2018) 236 LGERA 256; [2018] NSWLEC 118 at [13] ("Initial Action")). The consent authority must form two positive opinions of satisfaction under cl 4.6(4)(a). As these preconditions are expressed in terms of the opinion or satisfaction of a decision-maker, they are a "jurisdictional fact of a special kind", because the formation of the opinion of satisfaction enlivens the power of the consent authority to grant development consent (Initial Action [14]). The consent authority, or the Court on appeal, must be satisfied that the applicant's written request has adequately addressed the matters required to be addressed by cl 4.6(3) and that the proposal development will be in the public interest because it is consistent with the objectives of the contravened development standard and the zone, at cl 4.6(4), as follows: (4) Development consent must not be granted for development that contravenes a development standard unless: (a) the consent authority is satisfied that: (i) the applicant's written request has adequately addressed the matters required to be demonstrated by subclause (3), and (ii) the proposed development will be in the public interest because it is consistent with the objectives of the particular standard and the objectives for development within the zone in which the development is proposed to be carried out, and (b) the concurrence of the Secretary has been obtained.
On appeal, the Court has the power under cl 4.6(2) to grant consent to development that contravenes a development standard without obtaining or assuming the concurrence of the Secretary of the Department of Planning and Environment, pursuant to s 39(6) LEC Act, but should still consider the matters in cl 4.6(5) of LEP 2022 (Initial Action at [29]).

The applicant's written request to contravene the diverse housing development standard

The first opinion of satisfaction required by cl 4.6(4)(a)(i) is that the applicant's written request seeking to justify the contravention of a development standard has adequately addressed the matters required to be demonstrated by cl 4.6(3) (see Initial Action at [15]), as follows: (a) that compliance with the development standard is unreasonable or unnecessary in the circumstances of the case, and (b) that there are sufficient environmental planning grounds to justify contravening the development standard
The applicant bears the onus to demonstrate that the matters in cl 4.6(3) have been adequately addressed by the written request in order to enable the Court, exercising the functions of the consent authority, to form the requisite opinion of satisfaction (Initial Action at [25]). The consent authority has to be satisfied that the applicant's written request has in fact demonstrated those matters required to be demonstrated by cl 4.6(3) and not simply that the applicant has addressed those matters (RebelMH Neutral Bay Pty Limited v North Sydney Council [2019] NSWCA 130 at [4]).
The common ways in which an applicant might demonstrate that compliance with a development standard is unreasonable or unnecessary are summarised by Preston CJ in Wehbe v Pittwater Council (2007) 156 LGERA 446; [2007] NSWLEC 827 at [42]-[51] ("Wehbe") and repeated in Initial Action [17]-[21]:

the objectives of the development standard are achieved notwithstanding non-compliance with the standard;
the underlying objective or purpose of the development standard is not relevant to the development, so that compliance is unnecessary;
the underlying objective or purpose would be defeated or thwarted if compliance was required, so that compliance is unreasonable;
the development standard has been abandoned by the council;
the zoning of the site was unreasonable or inappropriate so that the development standard was also unreasonable or unnecessary (note this is a limited way of establishing that compliance is not necessary as it is not a way to effect general planning changes as an alternative to strategic planning powers).

The five ways to demonstrate compliance is unreasonable or unnecessary are not exhaustive, and it may be sufficient to establish only one way (Initial Action [22]).
The applicant's written request justifies the contravention of the diverse housing development standard on the basis that compliance is unreasonable or unnecessary because the proposal includes two high quality, generously sized three/four bedroom dwellings which will deliver housing that will meet the needs of the community, as sought in the "Our Inner West Housing Strategy 2020" (the Housing Strategy). The Housing Strategy identifies that housing for growing families, including more affordable housing, is in demand within the Balmain locality and therefore the higher percentage of larger apartments within this proposal will contribute to meeting the continuing demand for this household type.
The grounds relied on by the applicant in the written request under cl 4.6 must be "environmental planning grounds" by their nature, and environmental planning grounds is a phrase of wide generality (Four2Five Pty Ltd v Ashfield Council [2015] NSWLEC 90 at [26]) as they refer to grounds that relate to the subject matter, scope and purpose of the EPA Act, including the objects of the Act (Initial Action at [23]). The environmental planning grounds relied upon must be sufficient to justify contravening the development standard and the focus is on the aspect of the development that contravenes the development standard, not the development as a whole (Initial Action at [24] and Cumming v Cumberland Council (No 2) [2021] NSWLEC 117 at [78]). Therefore, the environmental planning grounds advanced in the written request must justify the contravention of the development standard and not simply promote the benefits of carrying out the development as a whole (Initial Action at [24]).
I am satisfied, pursuant to cl 4.6(4)(a)(i), that the applicant's written request has adequately addressed the matters required to be demonstrated by cl 4.6(3). The applicant's written request defends the exceedance of the housing diversity development standard of no more than 30% of the dwellings will contain at least 3 bedrooms as a justified by the de minimis numerical exceedance and the Housing Strategy. I am satisfied that justifying the aspect of the development that contravenes the development standard as a considered response to achieving the objectives of the clause, while taking into account the documented need for affordable accommodation for families in the Balmain locality, can be properly described as an environmental planning ground within the meaning identified by his Honour in Initial Action at [23].

Whether the proposal is in the public interest because it is consistent with the objectives of the contravened development standard and the zone

The second opinion of satisfaction in cl 4.6(4)(a)(ii) is that the proposed development will be in the public interest because it is consistent with the objectives of the development standard that is contravened and the zone objectives. The consent authority must be satisfied that the development is in the public interest because it is consistent with these objectives, not simply that the development is in the public interest (Initial Action at [27]). The consent authority must be directly satisfied about the matters in cl 4.6(4)(a)(ii) (Initial Action at [26]).
I am satisfied that the small numerical percentage exceedance of the 30% maximum for three-bedroom dwellings does not thwart the objectives of the clause to ensure the provision of a mix of dwelling types in a residential flat building, because the proposal offers a broad mix of dwelling sizes across the six apartments and the zone objectives are met by the proposal.

Conclusion

I have considered the submissions made by the Council's outline of relevant jurisdictional provisions filed with the Court on 26 September 2023 and I am satisfied on the basis of the evidence before me that the agreement of the parties is a decision that the Court could have made in the proper exercise of its functions.

Orders

The orders of the Court are: 1. The appeal is upheld. 2. The Applicant is to pay the Respondent's costs that are thrown away as a result of the amendment of the development application, as agreed or assessed, pursuant to s 8.15(3) of the Environmental Planning and Assessment Act 1979. 3. Development Application No. 2022/0684, as amended, for the demolition of existing structures and the construction of a residential flat building including basement parking and landscape works, at 77 Glassop Street, Balmain, is determined by the grant of consent, subject to the conditions of consent at Annexure A.

Commissioner of the Court Amended Annexure A (315091, pdf)

Amendments 01 November 2023 - Pursuant to r 36.17 of the Uniform Civil Procedure Rules 2005 (the slip rule), upload the Amended Annexure A. 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: 01 November 2023

(2018) 236 LGERA 256

(2007) 156 LGERA 446

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Judgment (12 paragraphs)

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Cases Cited (7)