Contravening development standards: further clarification on the construction of clause 4.6

Land and Environment Court of NSW Chief Justice Preston has continued his consideration of how clause 4.6 in local environmental plans should be applied by consent authorities and what matters must be “adequately addressed” by developers who seek to contravene development standards. In the recent decisions of Baron Corporation Pty Limited v Council of the City of Sydney [2019] NSWLEC 61 and RebelMH Neutral Bay Pty Limited v North Sydney Council [2019] NSWCA 130, his Honour has applied the Court’s reasoning in Initial Action and Al Maha in considering whether decision makers have misconstrued or misapplied the tests in clause 4.6 in refusing development applications.

Notably, both cases accept and apply the reasoning of Justice Basten in Al Maha, that the matters in clause 4.6(3), being:

  • that compliance with the development standard is “unreasonable or unnecessary”; and
  • that there are sufficient environmental planning grounds to justify contravening the development standard,

would not be “adequately” addressed unless they in fact justified the non-conformity. In other words, the decision maker has to be satisfied that there are proper planning grounds to warrant the grant of consent, and the contravention is justified. If the decision maker simply had to be satisfied that the demonstration required under subclause 4.6(3) had occurred, clause 4.6(4) would have no work to do.

Baron Corporation Pty Limited v Council of the City of Sydney [2019] NSWLEC 61

In 2016 Baron Corporation Pty Limited (Baron Corporation) was granted a deferred commencement consent to demolish existing warehouse buildings and erect a 7-storey residential flat building containing 27 apartments and associated basement parking on land in Rosebery. It subsequently sought to increase the density of the development and the land use intensity on the land, and lodged a further development application seeking consent for “alterations and additions to approved residential flat building” before satisfying the deferred commencement conditions of the consent.

The residential flat building approved by the deferred commencement consent had a floor space ratio (FSR) of 2:1, comprising the 1.5:1 maximum FSR permitted by cl 4.4(2) of the Sydney Local Environmental Plan 2012 (Sydney LEP) together with an additional floor space ratio of 0.5:1 permitted by cl 6.14(2) and (4) of Sydney LEP for community infrastructure at Green Square. The proposed alterations to the residential flat building would create a floor space ratio of 2.3:1, which exceeded the FSR permitted under the Sydney LEP, and consequently required a written request under cl 4.6 to justify the contravention of the development standard.

Baron Corporation appealed to the Land and Environment Court following the Council’s deemed refusal of the development application. At the hearing, Baron Corporation submitted, and Commissioner Gray accepted into evidence, an amended written request under cl 4.6 seeking to justify the contravention of the development standard in cl 4.4(2) of the Sydney Local Environmental Plan (Sydney LEP).

Commissioner Gray refused the development application on the basis that she was not satisfied, as she was required to be by cl 4.6(4)(a)(i) of the Sydney Local Environmental Plan 2012 (Sydney LEP) that Baron’s written request had adequately addressed the matters required to be demonstrated by cl 4.6(3) of the Sydney LEP. In particular, Commissioner Gray was not satisfied that the written request had adequately addressed:

  • the matter in cl 4.6(3)(b) that there were sufficient environmental planning grounds to justify contravening the development standard in cl 4.4(2) of the Sydney LEP; and
  • the matter in cl 4.6(3)(a) that compliance with the development standard in cl 4.4(2) of Sydney LEP was unreasonable or unnecessary in the circumstances of the case.

The grounds of appeal in the summons commencing the appeal primarily concerned the Commissioner’s finding that the written request had not adequately addressed the matter required to be addressed by cl 4.6(3)(a), and in particular, that the Commissioner misconstrued objective (b) of the development standard in cl 4.4(1) of the Sydney LEP. In submissions on the hearing of the appeal, Baron Corporation sought to expand the grounds of appeal to challenge the Commissioner’s finding that the written request had not adequately addressed the matter required to be demonstrated by cl 4.6(3)(b). It did not however seek leave to amend its grounds of appeal.

With respect to cl 4.6(3), his Honour noted at [77]-[79] that:

  1. The requirement that the matters in cl 4.6(3) be demonstrated by the written request refers to an outcome, not a process. Although the written request “seeks” to justify the contravention of the development standard, it must do this by “demonstrating” the matters in paragraphs (a) and (b) of cl 4.6(3). These matters are outcomes: that compliance with the development standard is unreasonable or unnecessary in the circumstances of the case and that there are environmental planning grounds to justify contravening the development standard.
  2. .…The request cannot “adequately” address the matters required to be demonstrated by cl 4.6(3) if it does not in fact demonstrate these matters.
  3. The upshot is that a consent authority, and the Court on appeal, in order to determine whether the applicant’s written request has demonstrated the achievement of the matters (the outcomes in cl 4.6(3)(a) and (b), might need to form a view about whether the matters have in fact been achieved.

Chief Justice Preston found that the Commissioner erred on a question of law in construing and applying objective (b) of the development standard in cl 4.4(2) of the Sydney LEP. That objective was “to regulate the density of the development, built form and land use intensity and to control the generation of vehicle and pedestrian traffic”. His Honour accepted Baron Corporation’s argument that the Commissioner construed the objective to involve the “regulation” of the density of development, built form and land use intensity by fixing the maximum floor space ratios of buildings in the local area, which involved reading the objective as a regulation or standard in itself. This effectively excluded the operation of cl 4.6 as it applied to the FSR development standard under cl 4.4 of the Sydney LEP by leaving that clause with no work to do.

However, that error was found to not be material and did not vitiate the Commissioner’s decision. In other words, his Honour determined that any error in finding that Baron Corporation’s written request did not adequately address the matter in cl 4.6(3)(a) did not affect the finding that the applicant’s written request did not adequately address the matter in cl 4.6(3)(b), and Baron did not establish that the Commissioner erred on a question of law in making that finding.

The appeal was therefore dismissed with costs.

RebelMH Neutral Bay Pty Limited v North Sydney Council [2019] NSWCA 130

In this case, RebelMH Neutral Bay Pty Limited (Rebel) sought consent to consolidate four lots of land, demolish existing buildings and erect a 5-storey residential flat building with basement car parking in Neutral Bay. The proposed building would contravene the applicable development standard under cl 4.3(2) of the North Sydney Local Environmental Plan 2013 (North Sydney LEP) which limits the height of buildings for the land to 12 metres. The proposed building had a maximum height of 15 metres, and the slope of the site resulted in non-compliances ranging from 0.4 metres to 3 metres. As a consequence, Rebel submitted a written request under cl 4.6 of the North Sydney LEP seeking to justify the contravention of the height development standard.

Rebel appealed against Council’s deemed refusal of the application to the Land and Environment Court, and revised the plans for the proposed development and the written request under cl 4.6 before and at the hearing of the appeal.

Justice Moore heard and determined the appeal and found that he was not satisfied that:

  • Rebel’s written request had adequately addressed the matters required to be demonstrated by cl 4.6(3)(a) and (b) of the North Sydney LEP; and
  • the proposed development would be in the public interest because it is consistent with the objective of the height development standard (his Honour finding that it was not consistent with two of the objectives, objectives (b) and (f), of cl 4.3(1) of the North Sydney LEP).

As a consequence, Justice Moore refused development consent.

Rebel appealed against Justice Moore’s decision, and raised five questions of law.

The Court of Appeal determined that none of the appellant’s grounds of appeal had been established and dismissed the appeal with costs.

Chief Justice Preston who was sitting on the Court of Appeal delivered the principal judgment. Relevantly, his Honour found that, in order for a consent authority to be satisfied that an applicant’s request had “adequately addressed” the matters required to be demonstrated by cl 4.6(3), the consent authority needs to be satisfied that those matters have in fact been demonstrated. It is not sufficient that the request merely seeks to demonstrate or covers those matters. In forming that view, his Honour applied the reasons given by Justice Basten in Al Maha and himself in Baron Corporation, that it would give no work to subclause 4.6(4) simply to require the consent authority to be satisfied that an argument addressing the matters required to be addressed under subclause (3) had been advanced.

Chief Justice Preston also determined that the primary judge did not misdirect himself as to the meaning of ‘views’ in objective (b) of the height development standard, and found that the meaning of ‘views’ is not limited to significant views. Rather it was a question of facts and not law whether the ‘pleasant verdant outlook’ identified feel within the meaning of a ‘view’.

Similarly, Justice Moore’s analysis of the consistency of the proposed development with the scale and density of development in the area pursuant to objective (f) of the development standard, was factual and no error of law was revealed under Ground 4.

Finally, Chief Justice Preston determined that the primary judge did not deny the Rebel procedural fairness by not providing it with an opportunity to amend the application before dismissing the appeal.

Where to from here?

These cases provide further guidance on how written requests under clause 4.6 should be prepared to satisfy the relevant tests. Importantly, such requests must do more than simply cover the matters to be addressed under clause 4.6(3). Rather, they should adequately demonstrate each of the “outcomes”, being:

  • that compliance with the development standard is unreasonable or unnecessary in the circumstances of the case; and
  • that there are sufficient environmental planning grounds to justify contravening the development standard.

In considering written requests, consent authorities are able to form their own view about whether these outcomes have in fact been achieved, and will only have the power to grant consent to development that contravenes the development standard if the requirements in cl 4.6(3) and cl 4.6(4) are met.

This post was written by Maddocks senior associate Melissa Mallos and lawyer Melinda Norquay.

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