A change from an existing use to a conforming use now requires Council’s LEP development standards to be considered in any assessment of the development application.
Iris Diversified Property Pty Limited v Randwick City Council  NSWLEC 58
The Land and Environment Court recently determined that where land with the benefit of existing use rights seeks to change the use to a conforming use (permissible in the zone) the provisions of the relevant LEP have force and effect and where there is a proposed departure from any development standard a SEPP 1 objection will be required.
The Applicant owns land at Clovelly on which the Hotel Clovelly stands. The land has been used for hotel purposes since at least 1926 and has existing use rights as a hotel. The land is zoned "2C (Residential C Zone)" pursuant to Randwick Local Environmental Plan 1998 (the LEP) and development for the purposes of "hotel" is prohibited in the zone.
The subject development application sought consent for alterations and additions to the hotel including a new basement carpark, a change of use pursuant to the incorporated provisions of the Environmental Planning and Assessment Regulation 2000 (the Regulation) of part of the land for six multi-unit housing apartments, strata subdivision of the hotel and apartments and strata subdivision.
Development for the purpose of multi-unit housing is permissible with development consent within the 2C zone. It was common ground that the application did not comply with Council’s development standards in relation to landscape area and floor space ratio.
Justice Pain in Iris Diversified Property Pty Limited v Randwick City Council  NSWLEC 58 dealt with a question of law as to whether the provisions of Randwick Local Environmental Plan (LEP) derogate from the incorporated provisions and have no force or effect while incorporated per force of section 108(3) of the Environmental Planning and Assessment Act 1979 (the Act) and/or whether the development application could be determined in the absence of a SEPP 1 objection.
Clause 41(1)(d) of the Regulation was amended on 29 March 2006 to provide that an existing use may "be changed to another use, but only if that other use is a use that may be carried out with or without development consent".
Iris Diversified Property Pty Limited is the first time the Court has considered the amended provision.
It is well established that existing use rights provisions exist as a "transitional derogation designed, for a time only, to cushion the impact of new general planning laws upon private owners with established use of their land which has continued without abandonment." (North Sydney Municipal Council v Boyts Radio & Electrical Pty Limited (1989) 67 LGRA 344 at 345)
The issue before Justice Pain was whether clause 41(1)(d) (as incorporated into the LEP) allowing a change of use from an existing use to a permissible use is derogated from if the change of use is assessed against the development standards in the LEP.
Her Honour held that the application of development standards to the assessment of a conforming use does not derogate from the incorporated provisions. The assessment will not detract from, destroy or impair the operation of clause 41(1)(d). Her Honour observed that:
"Clause 41(1)(d), as amended, together with the repeal of clause 41(2) in 2006, is a material and significant change to the previously existing situation which applied to the change of an existing use."
Until this case was determined it was the practice of many councils to assess an application for existing use rights as if the local controls in an LEP or DCP had no force or effect. Such controls may have been considered as a guide in a section 79C merit assessment but could not be given any determinative weight other than considering the application in the context of existing and future neighbourhood character (see Stromness Pty Limited v Woollahra Municipal Council  NSWLEC 587).
The effect of the Iris decision is that development standards in an LEP apply to an application for change of an existing use to a conforming use and where there is non-compliance with development standards a SEPP 1 objection will be required.
In dealing with future SEPP 1 objections applicants and councils alike need to be careful to ensure that the objection is founded on grounds relating to the particular development standard and the circumstances of the case. As was stated by Preston CJ in Wehbe v Pittwater Council  NSWLEC 827 at paragraph 60, "It (SEPP 1) does not allow a consent authority to dispense with compliance with a development standard merely in order to bring about conformity with some other planning control. SEPP 1 does not permit the consent authority to rank in order of importance planning controls applicable to the land and the proposed development, and give precedence to other planning controls over the development standard".