WINIM Developments Pty Limited v North Sydney Council [2024] NSWLEC 1328 | Case summary

Land and Environment Court (NSW)|2024-06-04

The application is accompanied by a BASIX certificate (Cert No. 1364083M_04 dated 1 March 2024) prepared by Greenview Consulting Pty Ltd in accordance with State Environmental Planning Policy (Building Sustainability Index: BASIX) 2004 (BASIX SEPP 2004).
The Court notes the repeal of the BASIX SEPP 2004 on 1 October 2023, and the savings and transitional provisions at s 4.2 of State Environmental Planning Policy (Sustainable Buildings) 2022 (Sustainable Buildings SEPP) that have the effect of saving the Amended DA from the provisions of Sustainable Buildings SEPP.

Where not otherwise considered in the decision above, I will now consider those issues raised in public submissions by general topic area.

Public submissions express concern at the intensification of traffic, noise and deliveries should the bar facility proposed on the lower ground floor of the hotel be open to the public.
The parties agree it is appropriate to impose a condition of consent that limits the operation of the bar and restaurant to 42 registered guests of the hotel, and are not to be made available to others who are not guests of the hotel. Such a condition appears at Conditions I2 and I21.

A number of public submissions note the congestion evident at times in Carabella Street, and the difficulty in finding on street parking, with concern expressed as to the potential for such both issues to be exacerbated by the development.
The Traffic Impact and Parking Assessment prepared by Greenview Consulting dated 31 January 2024 (Exhibit A, Tab 21) correctly identifies Carabella Street as a one-way street, and:

(1) Assesses the onsite parking provision to comply with Part B10 of the NSDCP, which expresses car parking provision in terms of a maximum.

(2) States that waste collection is proposed to occur onsite, in lieu of the kerbside collection utilised currently.

(3) Concludes that an increase in traffic movements is expected, of six more vehicles in the AM and PM periods.

A Plan of Management, authored by Planning Ingenuity dated 21 February 2023 (Exhibit A, Tab 37) requires, at section 4.8, the promotion of public transport options for guests, and identification of off-street parking options in the vicinity of the site. Additionally, the visitor drop off and pick up is nominated to occur on site in a zone dedicated for that purpose.

Public submissions raise concern as to the loss of affordable housing in the area due to the proposed development.
The Respondent submits that, absent evidence to the contrary, the Court may accept the Applicant's argument that Part 3 of State Environmental Planning Policy (Housing) 2021 (Housing SEPP) does not apply to the proposed development.
Part 3 seeks the retention of existing affordable rental housing that is relevantly defined at s 45 of the Housing SEPP, as follows:

low-rental residential building means a building used, during the relevant period, as a residential flat building containing a low-rental dwelling or as a boarding house, and includes a building that -

(a) is lawfully used as a residential flat building containing a low-rental dwelling or as a boarding house, irrespective of the purpose for which the building may have been erected, or

(b) was used as a residential building containing a low-rental dwelling or as a boarding house, but the use has been changed unlawfully to another use, or

(c) is vacant, but the last significant use of which was as a residential flat building containing a low-rental dwelling or as a boarding house.

While a boarding house is not defined in s 45 of the Housing SEPP, s 4(2) provides that where not otherwise defined, words in the Housing SEPP have the same meaning as in the Standard Instrument - Principal Local Environmental Plan 2006.
'Boarding house' is defined in the standard instrument as follows:

Boarding house means a building or place -

(a) that provides residents with a principal place of residence for at least 3 months, and

(b) that contains shared facilities, such as a communal living room, bathroom, kitchen or laundry, and

(c) that contains rooms, some or all of which may have private kitchen and bathroom facilities, and

(d) used to provide affordable housing, and

(e) if not carried out by or on behalf of the Land and Housing Corporation - managed by a registered community housing provider.

A low-rental dwelling is likewise defined at s 45 of the Housing SEPP in the following terms:

Low-rental dwelling means a dwelling that was let at a rental level no greater than the median level during the relevant period in relation to a dwelling -

(a) of the same type, and

(b) with the same number of bedrooms, and

(c) in the same local government area.

The relevant period to which the definitions above are directed is defined as:

Relevant period means the period commencing 5 years before the day on which the development application involving the building is lodged and ending on that day.

As the original DA was lodged on 23 February 2023, the relevant period is the period between 23 February 2018- 23 February 2023.
During this period, the Respondent submits the definition of 'boarding house' changed, however nothing turns on this and ultimately the Respondent agrees with the Applicant's submissions to the effect that contributions for affordable housing of a kind provided for in s 48 of the Housing SEPP do not apply in the circumstances of this case.
A similar position is advanced in the letter of advice prepared by Mr Jeff Mead dated 28 February 2024 (Exhibit A, Tab 9), supported by annexures, in which the operation of Glenferrie Lodge Hotel is defined as other than a residential flat building containing a low-rental dwelling, which does not provide affordable housing nor answer the description of a boarding house, and has not answered such a description at any time in the relevant period.
In the alternative, Mr Mead also considers the criteria at s 47(2) of the Housing SEPP to conclude the amount of affordable housing in the area will not be reduced in an area that is otherwise well served by boarding houses, and where the proposal is not likely to result in adverse social or economic impacts on the community. As Glenferrie Lodge Hotel does not accommodate long term residents, no residents will be displaced. Finally, as the site is not a boarding house or any other kind of affordable housing, it is unreasonable to impose a monetary contribution for the loss of housing that is not provided on the site.
As such, it is commonly held that Part 3 of the Housing SEPP does not apply to the proposed development and so those matters at s 47(2) of the Housing SEPP that must be taken in to account are not relevant in the circumstances of this case.

The impact of construction on neighbouring properties and residents is of obvious concern in public submissions. An amended Construction Management Plan prepared by LID Consulting dated 29 May 2024 provides for the following:

(1) Part 3.2 Work zone is necessary to carry out the development, and a permit will be needed.

(2) Part 4 Site Coordination - intends to limit impacts on residents

(3) Part 3.7 cranes will be necessary, and a permit will be needed

(4) Part 4.2.5 working parking will be needed and Council permits will be needed.

(5) A number of conditions seek to limit the impact of development on residents and the use of Carabella Street, including:

C1 requiring detailed Construction Management Program
C7 requiring a work zone permit
E2 requiring existing public parking provision to be maintained and observed
E3 requiring safety of public footways and roadways
E8 and E9 - dust emissions and air quality and noise and vibration

Noise impacts during construction are assessed in a Construction Noise & Vibration Management Plan prepared by Acoustic Dynamics dated 2 February 2024.

For the reasons set out in the decision above, I conclude the proposed development is deserving of the grant of consent, subject to conditions of consent, pursuant to s 4.16 of the EPA Act.
The Court notes that:

(1) The Court, exercising the functions of North Sydney Council as the relevant consent authority under s 39(2) of the Land and Environment Court Act 1979, approves, under s 38 of the Environmental Planning and Assessment Regulation 2021, the Applicant amending the development application in accordance with documents and revisions to documents set out in Annexure A to this decision.

(1) The Applicant is granted leave to rely on amended plans and other documents listed in Annexure A, subject to the Applicant paying the Respondent's costs thrown away as agreed or assessed pursuant to s 8.15(3) of the Environmental Planning and Assessment Act 1979.

(2) The appeal is upheld.

(3) Development application DA50/23 for alterations and additions to existing buildings and addition of a new five-storey rear wing extension containing three residential apartments and 42 hotel rooms above basement parking at 12A Carabella Street, Kirribilli is determined by the grant of consent subject to conditions of consent at Annexure B.

(4) All exhibits are returned, except for Exhibits A, B, H, 1 and 11.

Planning and Assessment Act 1979

Environment Court Act 1979

Planning and Assessment Regulation 2021

Is the proposed land use prohibited?

That part of the proposal that is for use as a hotel is for a use that is prohibited by reference to the land use table.
The Applicant's primary submission is that, notwithstanding the land use table, the proposed development is permitted by virtue of what is commonly termed the 'heritage incentive' provisions at cl 5.10(10) of the NSLEP.
The Applicant relies on authorities to submit the terms of cl 5.10(10) have been consistently applied by the Court where it has been found that the conservation of a heritage item is facilitated by the grant of consent, where that conservation retains the cultural significance of the item, and reveals and interprets the heritage significance of the item (David Fox v North Sydney Council [2016] NSWLEC 1366 at [47]; Fox v North Sydney Council [2020] NSWLEC 1056 at [33]; George v City of Parramatta Council [2017] NSWLEC 1366 at [56]).
Furthermore, as stated by Commissioner O'Neill in Howe Architects Pty Ltd v Ku-ring-gai Council [2021] NSWLEC 1233 at [78]: Once an application is made pursuant to the heritage incentive clause for a purpose that would otherwise be a prohibited use under the LEP, then the role of the consent authority is to assess the application pursuant to s 4.15 of the EPA Act and to exercise the discretion to grant consent under cl 5.10(10) of the LPE in relation to the proposed use if the consent authority is satisfied of all the matters (a) to (e).
Clause 5.10(10) relevantly provides: (10) Conservation incentives The consent authority may grant consent to development for any purpose of a building that is a heritage item or of the land on which such a building is erected, or for any purpose on an Aboriginal place of heritage significance, even though development for that purpose would otherwise not be allowed by this Plan, if the consent authority is satisfied that - (a) the conservation of the heritage item or Aboriginal place of heritage significance is facilitated by the granting of consent, and (b) the proposed development is in accordance with a heritage management document that has been approved by the consent authority, and (c) the consent to the proposed development would require that all necessary conservation work identified in the heritage management document is carried out, and (d) the proposed development would not adversely affect the heritage significance of the heritage item, including its setting, or the heritage significance of the Aboriginal place of heritage significance, and (e) the proposed development would not have any significant adverse effect on the amenity of the surrounding area.
The Applicant's position is supported by two written opinions in respect of the provisions at cl 5.10(10).
In the first instance, the Applicant's heritage expert, Mr John Oultram prepared a written opinion dated 4 March 2024 (Exhibit A, Tab 12) in respect of subcll (a)-(d) that may be summarised as follows: 1. In respect of subcl (a), the conservation of the heritage item is facilitated by consent because the primary use of the site has been that of a hotel since the 1940's. Such a continuation of the use retains the early internal cellular layout, features and details of original fabric including the two common rooms, the timber stair and central halls. 2. In respect of subcl (b), there is no heritage management document yet approved by the consent authority with which the proposal could accord. However, the Applicant has prepared a Conservation Management Plan (CMP) intended to serve that purpose, and a Schedule of Conservation Works. 3. In respect of subcl (c), the CMP and Revised Schedule of Conservation Works (Exhibit B, Tab 3) set out the terms by which conditions of consent may require conservation of the heritage consistent with the heritage management documents prepared for that purpose. 4. In respect of subcl (d), the proposal allows for the form, layout, external and internal details of the heritage item to be retained whereas alternative and permissible uses such as residential apartment development would result in the loss of such fabric.
In the second instance, the Applicant relies on the written opinion of Mr Jeff Mead, planning expert for the Applicant, dated 4 March 2024 (Exhibit A, Tab 11) as to whether the proposal would have any significant adverse effect on the amenity of the surrounding area, being the focus of subcl (e).
Mr Mead's opinion is that the retention of the historic use of the site as a hotel brings with it impacts identical to those evident today but with the additional opportunity to impose on the development conditions of consent that better regulate impacts such as access, noise and the like through a Plan of Management. While these impacts are addressed in greater detail in a written request prepared in accordance with cl 4.6 of the NSLEP that is considered at [33]-[56], Mr Mead's opinion as to impacts on the amenity of the area is summarised as follows: 1. Shadow diagrams depict additional overshadowing to No 10 Carabella Street that does not reduce solar access to less than five hours in mid winter, in excess of the minimum of three hours required by Part B1.3.7 of the North Sydney Development Control Plan 2013 (NSDCP). 2. Visual and aural privacy are minimised by providing appropriate setbacks and positioning of glazing, such a limiting glazing to the side boundaries to fixed, obscure or highlight windows only. Where balconies are proposed, they are limited in number and size, and do not align with windows in habitable rooms and balconies on adjoining properties, and where open space is provided in the rear setback, private open space to an apartment replaces communal open space that was a place of activity and a source of noise. 3. View impacts are assessed by a detailed View Impact Assessment prepared by Bonus + Associates (VIA) (Exhibit B, Tab 1) that analyses the view impact from properties at 1-3 Peel Street, 5-7 Peel Street, 14 Carabella Street and 20 Carabella Street, and considers the view impact in terms set out in the planning principle in Tenacity Consulting v Warringah Council (2004) 134 LGERA 23; [2004] NSWLEC 140. 4. Traffic and parking impacts are considered by reference to the traffic generated by the proposal, and arrangements for access into the basement carpark accommodating seven cars and eight bicycles, in respect of which the Traffic and Parking Assessment Report prepared by Greenview Consulting (Exhibit A, Tab 21) concludes no significant impact arises.

(1) Shadow diagrams depict additional overshadowing to No 10 Carabella Street that does not reduce solar access to less than five hours in mid winter, in excess of the minimum of three hours required by Part B1.3.7 of the North Sydney Development Control Plan 2013 (NSDCP).

(2) Visual and aural privacy are minimised by providing appropriate setbacks and positioning of glazing, such a limiting glazing to the side boundaries to fixed, obscure or highlight windows only. Where balconies are proposed, they are limited in number and size, and do not align with windows in habitable rooms and balconies on adjoining properties, and where open space is provided in the rear setback, private open space to an apartment replaces communal open space that was a place of activity and a source of noise.

(3) View impacts are assessed by a detailed View Impact Assessment prepared by Bonus + Associates (VIA) (Exhibit B, Tab 1) that analyses the view impact from properties at 1-3 Peel Street, 5-7 Peel Street, 14 Carabella Street and 20 Carabella Street, and considers the view impact in terms set out in the planning principle in Tenacity Consulting v Warringah Council (2004) 134 LGERA 23; [2004] NSWLEC 140.

(4) Traffic and parking impacts are considered by reference to the traffic generated by the proposal, and arrangements for access into the basement carpark accommodating seven cars and eight bicycles, in respect of which the Traffic and Parking Assessment Report prepared by Greenview Consulting (Exhibit A, Tab 21) concludes no significant impact arises.

WINIM Developments Pty Limited v North Sydney Council

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