124 Penshurst Pty Ltd v Willoughby City Council [2025] NSWLEC 1598

Catchwords: DEVELOPMENT APPLICATION – alterations and additions to shop top housing in E3 Productivity Support zone – conciliation conference – agreement between parties - orders Land and Environment Court New South Wales Medium Neutral Citation: 124 Penshurst Pty Ltd v Willoughby City Council [2025] NSWLEC 1598 Hearing dates: Conciliation conference on 15 July: submissions on 7 and 12 August 2025 Date of orders: 19 August 2025 Decision date: 19 August 2025 Jurisdiction: Class 1 Before: Horton C Decision: The Court orders that: (1) The Applicant is to pay the Respondent ’ s costs thrown away pursuant to section 8.15(3) of the Environmental Planning and Assessment Act 1979 (NSW) as a result of the amendment to the development application, agreed at $13,000 (incl. GST). (2) The appeal is upheld. (3) Development consent is granted to DA-2024/195 as amended, for alterations and additions to the existing shop top housing building at 124 Penshurst St, Willoughby, comprised in Lot 120 DP868160, to deliver 13 additional apartments, alterations to the existing ground floor commercial suite, stratum and strata subdivision of the completed building, and the extension of the existing basement to provide 10 new car parking spaces, subject to the conditions of consent at Annexure B. Catchwords: DEVELOPMENT APPLICATION – alterations and additions to shop top housing in E3 Productivity Support zone – conciliation conference – agreement between parties - orders Legislation Cited: Environmental Planning and Assessment Act 1979 (NSW) , ss 4.16, 8.7, 8.15 Land and Environment Court Act 1979 (NSW) , s 34 Architects Act 2003 (NSW) Environmental Planning and Assessment Regulation 2021, ss 29, 38, Sch 7 State Environmental Planning Policy (Biodiversity and Conservation) 2021, ss 6.6, 6.7, 6.8, 6.9 State Environmental Planning Policy (Housing) 2021, ss 16, 17, 18, 19, 20, 21, 147, 148, 149, Sch 9 State Environmental Planning Policy (Resilience and Hazards) 2021, s 4.6 State Environmental Planning Policy (Sustainable Buildings) 2022, s 2.1 State Environmental Planning Policy (Transport and Infrastructure) 2021, ss 2.48, 2.119 Willoughby Local Environmental Plan 2012 , cll 4.3, 4.4, 6.1, 6.2, 6.3, 6.7, 6.8, 6.23 Category: Principal judgment Parties: 124 Penshurst Pty Ltd (Applicant) Willoughby City Council (Respondent) Representation: Counsel: L Camenzuli (Solicitor) (Applicant) J Simpson (Solicitor) (Respondent) Solicitors: Corrs Westgarth Chambers (Applicant) Willoughby City Council (Respondent) File Number(s): 2025/178040 Publication restriction: Nil JUDGMENT COMMISSIONER : Alterations and additions are proposed to an existing mixed use development at 124 Penshurst Road in Willoughby , legally described as Lot 20 in DP 868160 . In general terms, the proposal is to increase the building height from four storeys to six storeys, increase the number of apartments and car parking spaces and to provide a component of affordable housing. As such, development application DA-2024/195 (the DA) seeks to obtain the benefit of what is commonly known as the height bonus within State Environmental Planning Policy (Housing) 2021 (Housing SEPP). The DA was lodged by the Applicant, 124 Penshurst Pty Ltd (Penshurst) on 6 September 2024. As the DA was otherwise undetermined, Penshurst filed an appeal under s 8.7 of the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act) on 9 May 2025 . On 17 June 2025, the Willoughby Local Planning Panel refused the DA on behalf of Willoughby City Council (the Council). On 15 July 2025, the Court arranged a conciliation conference between the parties in accordance with s 34(1) of the Land and Environment Court Act 1979 (NSW) (LEC Act), at which I presided. At the conciliation conference, the parties reached in- principle agreement on the matters in contention, subject to an adjournment that would permit the preparation of amended plans. I granted the adjournment. A signed agreement was filed with the Court on 7 August 2025 , in accordance with s 34(10) of the LEC Act. 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 jurisdictional prerequisites, with respect to the following environmental planning instruments that must be satisfied before this function can be exercised: State Environmental Planning Policy (Transport and Infrastructure) 2021 . State Environmental Planning Policy (Resilience and Hazards) 2021. State Environmental Planning Policy (Housing) 2021. State Environmental Planning Policy (Biodiversity and Conservation) 2021. State Environmental Planning Policy (Sustainable Buildings) 2022. Willoughby Local Environmental Plan 2012 . For the reasons set out below, I am satisfied that the parties ’ decision is a decision that the Court could have made in the proper exercise of its functions. The site is located within an area identified in the Willoughby Local Environmental Plan 2012 (WLEP) as E3 Productivity Support in which residential accommodation is prohibited. However , as the site is identified as Area 3 on the relevant Special Provisions Map, shop top housing is permitted with consent, where consistent with the objectives for development in the zone. • To provide a range of facilities and services, light industries, warehouses and offices. • To provide for land uses that are compatible with, but do not compete with, land uses in surrounding local and commercial centres. • To maintain the economic viability of local and commercial centres by limiting certain retail and commercial activity. • To provide for land uses that meet the needs of the community, businesses and industries but that are not suited to locations in other employment zones. • To provide opportunities for new and emerging light industries. • To enable other land uses that provide facilities and services to meet the day to day needs of workers, to sell goods of a large size, weight or quantity or to sell goods manufactured on-site. • To accommodate businesses and other uses of land if the access requirements of, and the traffic generated by, the uses do not interfere with the safety and efficiency of the road network. The height standard applicable to the site under cl 4.3 of the WLEP is 14m. However, as the proposal includes seven affordable units , s 16(3) of the Housing SEPP permits a greater height equivalent to the additional floor space attributed to the affordable housing component. So understood, the height permitted on the site is 18.2m. The parties agree the maximum height of the proposal is 18.01m , and so complies with the height permitted on the site when the controls at cl 4.3 of the WLEP and s 16 of the Housing SEPP are read together. In similar terms, the floor space ratio (FSR) standard that applies to the site is likewise derived from cl 4.4 of the WLEP and s 16 of the Housing SEPP to permit a FSR of 2.6:1 with which the proposed development complies. The site is designated on the relevant Acid Sulfate Soils Map at cl 6.1(2) as Class 5 . However, as it is not within 500m of another class of soil, an acid sulfate management plan is not required. A memorandum prepared by Geotechnique Pty Ltd dated 13 May 2024 (the Geotechnique Addendum) cites a Geotechnical investigation undertaken in 2017, informed by drilling two boreholes to a maximum depth of 7.5m below natural ground level . Bored piers that were subsequently constructed are understood to be founded at depths of up to 15m , or at least 5.5m below the level of the basement now proposed to be excavated. Finally, the Geotechnique Addendum concludes that the existing bored piers are capable of being used to support the development now proposed. I also note the conclusions of the Preliminary Site Investigation, undertaken by EI Australia dated 4 June 2024 that found no evidence of contamination on the site. Finally I have considered the stormwater drainage proposed for the development and prepared by ALW Design (Stormwater Plans) . On the basis of those plans and other documents cited above, I consider those matters at cl 6.2(3) of the WLEP to be satisfactorily addressed. I have considered those matters at cl 6.3 of the WLEP that seek to address urban heat. On the basis of the following, I accept that the proposal reduces and removes some urban heating from the environment and protects community wellbeing: The architects statement at [ 21 ] confirms 85% of units are naturally cross-ventilated The Landscape Plans prepared by Site Image depicts d eep soil to the rear of the site and the selection of canopy trees . The architectural drawings (DWG No. A4041 and A4042) identify light to mid coloured roofing and walling materials to the upper most level. Otherwise , the development is off-white. The site is identified on the relevant map at cl 6.7(2) of the WLEP as ‘ Active Street Frontages ’ . The street frontage consists of a commercial tenancy , residential entrance, access for fire services and vehicular access . When the terms of the provision are understood, I am satisfied that the building will have an active street frontage. The site is identified on the relevant Affordable Housing Map at cl 6.8(2) a s Area 1, in which 4% of the gross floor area of the residential component of the development must be provided as affordable housing . As briefly stated at [ 11 ], the development proposes affordable housing. The Applicant proposes t he dedication of Unit 204 to Council , with an area greater than 50m 2 , free of cost, for the purposes of affordable housing. The parties also agree condition s of consent to enforce the dedication . I have considered the Willoughby Affordable Housing Principles at cl 6.8(1) of the WLEP and the impact of the proposed development on the existing and likely future mix of residential accommodation in Willoughby. As the site is also identified on the relevant Special Provisions Map at cl 6.23(2), the proposed development must exhibit design excellence in terms set out at subcll (4) and (5). For the reasons that follows, I am satisfied the proposed development exhibits design excellence: On the basis of the setbacks of the uppermost levels, and change in materials and finishes that are depicted on the architectural drawings , I am satisfied the proposal achieves a high standard of architectural design, materials and detailing . As the proposal is for alterations and additions to an existing development that has been constructed, the proposal substantially retains the interface with the public domain that was the subject of a previous consent. That said, the proposal does not do other than improve the quality and amenity of the public domain by integrating improved access for waste collection. The proposed development does not detrimentally impact a view corridor. I consider the site suitable for the development proposed, and the use mix to be appropriate for the location. While there are no immediate heritage issues, the proposal addresses streetscape constraints by variation in the setback to the Penshurst Road frontage, and setting back the uppermost level. As such, bulk, massing and modulation minimises the effect of overshadowing on adjoining properties, and complies with the height standard for the site. The proposal is supported by a n Ecologically Sustainable Development (ESD) Assessment Report prepared by Thermal Environmental dated 28 August 2024, that sets out targets and ambitions for the development equivalent to 4-star Greenstar rating. Finally, the proposed development achieves appropriate accessible interfaces with the sloping frontage to Penshurst Road and integrates landscape in to the rear of the site to address privacy and amenity. I also not e that subcl (6) requires the proposal to be considered by a design review panel and its review to be taken into account . The parties advise that concerns expressed by the design review panel on 7 February 202 5 as to overlooking and privacy to adjoining properties to the rear are now addressed. State Environmental Planning Policy (Housing) 2021. Notwithstanding consideration of the affordable housing provisions at [ 11 ] -[ 13 ] , the total area of affordable housing component for the purposes of s 16 of the Housing SEPP is 475.75m2, or 14.51% of the gross floor area of the proposed development. The parties agree that the proposal complies with the non-discretionary standards at s 19 of the Housing SEPP , where not otherwise set aside by subs (3). The parties agree that the proposed development is compatible with the desirable elements of the character of the local area , pursuant to s 20 of the Housing SEPP and that provision is made in the agreed conditions of consent for the affordable housing component to be for a period of at least 15 years , in a manner consistent with ss 16, 17 and 18 of the Housing SEPP and to be managed by a registered community housing provider , in accordance with s 21 of the Housing SEPP. Where an application relates to residential apartment development, s 29 of the Environmental Planning and Assessment Regulation 2021 (NSW) (EPA Regulation) requires the application be accompanied by a statement by a qualified designer, defined in the Dictionary at sch 7 of the EPA Regulations as a person registered as an architect in accordance with the Architects Act 2003 (NSW) . The statement is required by s 29 of the EPA Regulation to verify matters that are relevant to those matters that must be taken into consideration when determining a development application for residential apartment development, at s 147 of the Housing SEPP. The statement prepared by Mr Mark Alves dated 8 August 2025 (Arch Reg No 9401) is consistent with the requirements at s 29 of the EPA Regulation , and so permits the Court to take into consideration those matters at ss 147 , 148 and 149 of the Housing SEPP. State Environmental Planning Policy (Resilience and Hazards) 2021. For reasons that are identical to those at [ 16 ], I am satisfied that the site is suitable for the development proposed in accordance with s 4.6 of the State Environmental Planning Policy (Resilience and Hazards) 2021 (Resilience and Hazards SEPP). State Environmental Planning Policy (Biodiversity and Conservation) 2021. On the basis of the Stormwater Plans cited at [ 16 ] , I am likewise satisfied that the development includes measures that positively effect the quality of water entering Sydney Harbour so that stormwater discharged from the site will be as close as possible to neutral or beneficial, and secondly, that the impact on water flow in a natural waterbody will be minimised , being a n opinion of satisfaction required by s 6.6 of State Environmental Planning Policy (Biodiversity and Conservation) 2021 (Biodiversity SEPP) . In particular, I note filtration devices are proposed within a 6m2 chamber to contain stormfilter cartridges , based on MUSIC modelling summarised in a letter prepared by ALW Design dated 17 December 2024. For similar reasons I have also considered those matters at s s 6.7 and 6.8 of the Biodiversity SEPP and am satisfied, there will be no direct, indirect or cumulative impact on terrestrial, aquatic or migratory animals or vegetation to a minimum, and no adverse impact on aquatic reserves, or in terms of erosion , or flooding . Neither will the proposed development have an impact on recreational land uses or access to public land , in terms set out in s 6.9 of the Biodiversity SEPP. State Environmental Planning Policy (Transport and Infrastructure) 2021. Given the proposed development is within relevant proximity to electrical infrastructure, s 2.48 of State Environmental Planning Policy (Transport and Infrastructure) 2021 (Infrastructure SEPP) applies to require referral to the relevant electricity supply authority , Ausgrid. Ausgrid takes no exception to the proposal and provides terms that are incorporated into the agreed conditions of consent. T he site has a frontage to Penshurst Road which is a c lassified Road . As there is no other practical or safe vehicular access to the land, such access is to be from Penshurst Road . A Traffic and Parking Assessment Report prepared by Terrafic Pty Ltd dated 12 December 2024 assesses the traffic generated by the additional units and the additional car parking proposed. TfNSW provided its concurrence to the proposal dated 11 October 2024 , subject to terms that are incorporated into agreed conditions of consent. Accordingly, I am satisfied that the operation of Penshurst Road will not be adversely affected by the development as a result of vehicular access, emissions or dust, or the nature, volume or frequency of vehicles using Penshurst Road, in accordance with s 2.119 of the Infrastructure SEPP. A Road Traffic Noise Advice prepared by Renzo Tonin and Associates dated 1 May 2024 (Acoustic Report) proposes design mitigation measures to address potential impacts from traffic noise generated on Penshurst Road, and the potential impact of noise from other sources such as neighbouring properties. I note the Acoustic Report concludes that acceptable levels will be achieved, subject to measures that are incorporated into the agreed conditions of consent . State Environmental Planning Policy (Sustainable Buildings) 2022. The application is accompanied by a BASIX certificate for 91 apartment s ( Cert No. 175 1847M_02 dated 31 July 2024 ) prepared by ESD Synergy Pty Ltd in accordance with State Environmental Planning Policy (Sustainable Buildings) 2022 (Sustainable Buildings SEPP) . E mbodied e missions are quantified in the BASIX Certificate , such that the Court can be satisfied that the embodied emissions attributable to the proposed development have been quantified in accordance with s 2.1(5) of the Sustainable Buildings SEPP. Conclusion As the parties ’ decision is a decision that the Court could have made in the proper exercise of its functions, I am required under s 34(3) of the LEC Act to dispose of the proceedings in accordance with the parties ’ decision. In making the orders to give effect to the agreement between the parties, I was not required to, and have not, made any merit assessment of the issues that were originally in dispute between the parties. The Court notes that the Respondent has approved, pursuant to s 38 of the EPA Regulations , the amendment of the development application in accordance with the amended plans and documentation referred to in the index at Annexure A. Orders The Court orders that: The Applicant is to pay the Respondent ’ s costs thrown away pursuant to section 8.15(3) of the Environmental Planning and Assessment Act 1979 (NSW) as a result of the amendment to the development application, agreed at $13,000 (incl. GST). The appeal is upheld. Development consent is granted to DA-2024/195 as amended , for alterations and additions to the existing shop top housing building at 124 Penshurst St, Willoughby, comprised in Lot 120 DP868160, to deliver 13 additional apartments, alterations to the existing ground floor commercial suite, stratum and strata subdivision of the completed building, and the extension of the existing basement to provide 10 new car parking spaces, subject to the conditions of consent at Annexure B. T Horton Commissioner of the Court Annexure A (149 KB, pdf) Annexure B (472 KB, pdf) ********** 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: 21 August 2025