Relying on incentive provisions — when you do not comply with prerequisites

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By Aaron Gadiel, Partner

A new decision of the Land and Environment Court has highlighted that it is not always necessary to comply with the nominated prerequisites to take advantage of height/floor space ratio incentives in a local environmental plan.

Clifton Development Group

In Clifton Development Group Pty Ltd v Council of the City of Sydney [2022] NSWLEC 1290 (handed down last month), development consent was sought for the construction of a seven-storey Surry Hills building, to be used for the purposes of a commercial premises and retail premises.  We acted on behalf of the applicant in these proceedings.

The Land and Environment Court granted development consent in reliance on a ‘clause 4.6’ request.

A ‘clause 4.6 request’ is a request to carry out a in a way that contravenes a development standard set out in an environmental planning instrument.  A local environmental plan (LEP) is a type of environmental planning instrument.  The legal mechanism is set out in clause 4.6 of ‘standard instrument’ compliant local environmental plans.

In Clifton Development Group, the proposed development had a total gross floor area of 2486sqm which equated to a floor space ratio of 5.56:1.  The proposed floor space ratio exceeded the 5.1 maximum by 0.56:1 (11.2 per cent).

This exceedance was equal to 250.4sqm of extra gross floor area.  Of this, 68sqm was attributable to the ‘end of journey’ floor space that would have been permissible under incentive floor space provisions if extra gross floor area for commercial and retail space had not been sought.

However, the incentive provisions were not available (under the terms of the relevant prerequisites), because the gross floor area was not otherwise compliant with controls.

This other non-compliance was caused by 182.4sqm that was sought for commercial and retail space.

The Court accepted that the extra 182.4 sqm better achieved the objects of the planning legislation than a compliant building.  This was because it offered an efficient use of the land in a way that creates no material adverse impacts for neighbours or the wider community.  (The extra floor space was largely subsurface and it created an opportunity to provide a commercial/retail space with distinct qualities that could accommodate niche activities that were not likely to be accommodated in above-ground floor space.)

The Court also concluded that the 68sqm for the ‘end of journey’ floor space should still be made available, despite not meeting a prerequisite for this floor space, relying on an earlier Court decision known as GM Architects Pty Ltd v Strathfield Council [2016] NSWLEC 1216.

In Clifton Development Group the clause 4.6 request was upheld and development consent was granted.

GM Architects

GM Architects — which was relied on in Clifton Development Group —  is an important decision that is under-appreciated by many developers facing difficult-to-satisfy incentive provisions in LEPs.

In GM Architects, the proposed development did not meet the requirements to access the additional height/floor space under the LEP.  This meant that the incentive provisions did not apply.

The Court considered that, nonetheless, development consent could be granted varying the height and floor space provisions of the LEP under clause 4.6.  The consequence was that additional height/floor space — that would have been available if the ‘incentive’ provision had applied — was able to be accessed.

Critically, the Court concluded that the approval of the proposed additional floor space ratio and the proposed height provided a better planning outcome — as it allowed the subject lot to achieve the planned residential density for the locality without generating an adverse impact.

The Court also said approval of the development, on the basis of the clause 4.6 requests, would lead to a better outcome than restricting development to the base development standards. (That is, the base development standards did not actually provide for the optimum level of development for the area.)

The clause 4.6 requests were upheld, varying the base height and floor space controls (not the incentive provision prerequisites) on the basis that a better outcome would be achieved than by restricting the development to the ‘base’ height/floor space.

This was done, despite the fact that the application:

  • sought significant additional height and floor space (103 per cent and 44.7 per cent) provided for in separate incentive clauses; and
  • did not comply with the prerequisites set out in the separate incentive clauses.

The bottom line is that, so long as clause 4.6 is available for use in relation to base height/floor space ratio provisions, it may still be possible to achieve the built-form outcome anticipated by incentive provisions.  This applies even where all of the technical prerequisites to access that incentive floor space have not been met.

For further information, please do not hesitate to contact us.

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