Posted on May 31, 2023 by Liam Mulligan and Dimitrious Havadjia 15

When is a height control a development standard?

The question of whether a particular clause is or is not a development standard has been a matter of considerable debate over many years.

As discussed in our earlier blog here (Subdivisions and Development Standards), where a clause in an LEP provides an exception to a development standard, there have been somewhat conflicting decisions as to whether the exception is itself truly a development standard.  The recent decision of Australian Unity Funds Management Ltd in its capacity as Responsible Entity of the Australian Unity Healthcare Property Trust v Boston Nepean Pty Ltd & Penrith City Council [2023] NSWLEC 49 (Unity Funds) continues the development of the law on this point.

Background

Boston Nepean Pty Ltd (Boston) submitted a development application (DA) to Penrith City Council (Council) for the construction of a 140 room hotel with a rooftop bar and restaurant. The site was zoned B4 – Mixed Use under the Penrith Local Environmental Plan 2010 (PLEP) and was identified as being part of the “Penrith Health and Education Precinct”.  The maximum building height for the site, under clause 4.3 of the PLEP, was 18m.

However, cl 7.11 of the PLEP also applied to the site (as it was within the Health and Education Precinct) and provided that:

(3)   Despite clause 4.3, development consent may be granted to development on land that exceeds the maximum height shown for that land on the Height of Buildings Map by up to 20% if the floor to ceiling height of both the ground and first floors are equal to or greater than 3.5 metres.

If the 20% additional height permitted by clause 7.11 applied, a building on the site could be up to 21.6m in height. The final approved height of the hotel was 23.845m.

The DA relied on clause 7.11 of the PLEP and proposed a 3.5m floor to ceiling height at ground level. However, on the first floor, the DA only proposed a floor to ceiling height of 3.0m. As part of the DA, Boston relied on two cl 4.6 requests being,:

1. request relating to non-compliance with the height of buildings development standard in clause 4.3 of the PLEP (the 18m standard); and
2. request relating to the non-compliance with the floor to ceiling requirement in clause 7.11 of the PLEP, in respect to the first floor.

On the basis of these requests, the Penrith Local Planning Panel (Panel) approved the DA.

Judicial review of the Panel’s decision

Australian Unity Funds (Australian Unity) commenced judicial review proceedings against the Council and Boston, seeking a declaration that the consent was invalid. Amongst other reasons, Australian Unity argued that cl 7.11 of the PLEP was not a development standard that could be varied by a cl 4.6 request, and therefore the consent was invalid.

The Respondent argued principally that it was unnecessary for the Panel to have approved a variation to the development standard in clause 7.11, as it was enough that a cl4.6 request in respect of the height of buildings standard in clause 4.3 was accepted. In the alternative, the Respondent argued that cl. 7.11 was a development standard which could be exceeded if a  cl. 4.6 request was accepted.

Was a cl4.6 request in respect of cl 7.11 required at all?

The Court rejected the Respondent’s primary argument and found that the Panel had correctly made its decision to grant consent on the basis that both cl 7.11 and cl 4.3 were development standards in respect of which Boston had made a  cl. 4.6 request.

The Court held that the Respondent’s argument (that only a cl4.6 request in respect of cl4.3 (the 18m standard) was required) would leave cl 7.11 with no work to do, and consistently with established law on the construction of LEPs, held that such a construction should be rejected.

Is cl 7.11 a development standard?

Australian Unity relied principally on the decision of Robson J in Elimatta Pty Ltd v Read [2021] NSWLEC 75 (Elimatta), which we discussed in our earlier blog, to argue that cl 7.11 acted not as its own standard, but instead as an exception  to the standard in cl4.3 , and it therefore could not be subject to a cl4.6 request. The reasoning in Elimatta, which considered a clause in different form but of similar effect, was that such clauses are not development standards in and of themselves but instead “leverage off” the principal development standard.

The Court rejected this argument and instead found that cl 7.11 was a development standard in its own right, and therefore could be subject to a cl 4.6 request.

The Court considered the statutory definition of “development standard”, being “development standards means provisions of an environmental planning instrument or the regulations in relation to the carrying out of development, being provisions by or under which requirements are specified or standards are fixed in respect of any aspect of that development, including, but without limiting the generality of the foregoing, requirements or standards in respect of— …[a long list of particular characteristics of development]”.

Having regard to that definition, and the significant body of case law on the identification of development standards, Duggan J found that cl 7.11 was not merely a “formula to gain an exception to clause 4.3” (being the test applied by Robson J in Elimatta), but instead a development standard because it outlined specific circumstances where consent could be granted to development that exceeded the height limit in cl 4.3.

On the basis of that finding, it was not necessary for the Court to determine whether Elimatta was wrongly decided (as argued by the Respondent). However, the Court did make some remarks that tend to suggest that Elimatta may have been wrongly decided:

I note that the statutory regime in Elimatta concerned that of subdivision and not building height and is distinguishable on this basis notwithstanding the structural textual similarities between the provisions at issue in that case and to those in the present matter. Having said this, I note that the conclusion in Elimatta appears to be inconsistent with the remarks in RIG that a relevantly similar provision to cl 7.11 was a development standard (at [53] and [68]).

Implications

Although the Court did not expressly overturn Elimatta, the Court noted that Elimatta was potentially inconsistent with the Court of Appeal’s decision in R.I.G. Consulting Pty Ltd v Queanbeyan-Palerang Regional Council [2021] NSWCA 130, which we also previously blogged about, and which considered a clause in similar terms to cl. 7.11 of the PLEP.

At this stage, the most that can be said is that Unity Funds limits the application of Elimatta to subdivision controls in a similar form to the controls considered in that case, and confirms that Elimatta did not establish a principal of general application.

If you have any questions about this blog post, please leave a comment below or contact Liam Mulligan on 02 8235 9715 or Dimitrious Havadjia on 02 8235 9724.