By Aaron Gadiel, Partner, Mills Oakley
The Land and Environment Court has handed down a decision that will have major implications for the way maximum building height compliance is dealt with on brownfield sites in NSW.
The Court gave its judgment in Merman Investments Pty Ltd v Woollahra Municipal Council  NSWLEC 1582 just over a week ago. We acted for the development proponent in this case. The Court decision resulted in a grant of development consent.
The previous established approach
Most local environmental plans (LEPs) in NSW are ‘standard instrument’ plans. This means that they use many common provisions and definitions set out in the state-wide ‘standard instrument’.
In ‘standard instrument’ LEPs the maximum building height is measured from ‘ground level (existing)’. (In some rare cases it is measured by reference to a reduced level (RL). This article does not concern those cases.)
The ‘ground level (existing)’ is defined as ‘the existing level of a site at any point’.
In the past there was controversy as to how this would be applied to brownfield land — when there is an existing building that has been excavated into the site.
Until now, the relevant Court authority for the calculation of the existing ground level for the purposes of a ‘standard instrument’ height control (in the portion of the site occupied by a basement) was Bettar v Council of City of Sydney  NSWLEC 1070 at -.
In Bettar the Court expressly rejected an argument that would result in starkly different height limits arising from the same development standard (depending on the degree of existing built form on the site).
Under the Bettar approach, where there is a basement in an existing building, the ‘existing ground level’ needed to be inferred from co-ordinates on the edge of a footprint of the basement of the existing building (rather than the excavated ground level that sits under the basement).
The existing ground level could only be extrapolated in this way where there is no existing ground level due to the existence of the basement.
Where the ground level was to be inferred, it was to be shown as a plane drawn from the existing ground level at the key points marking the edge of the portion of the site which is said to have no ground level (ie the portion occupied by a building with a basement).
The methodology in Bettar has, until now, been routinely accepted as appropriate when calculating building height on a site occupied by an existing building that has been excavated into the ground.
The revised approach
In August 2021, the Court decided not to apply Bettar in a particular case (Cadele Investments Pty Ltd v Randwick City Council  NSWLEC 1484 at -). This might have been a one-off. However, this month’s decision in Merman more squarely deals with the issue.
The decision in Merman was handed down by the same commissioner of the Court who made the Bettar decision (Commissioner O’Neill).
In Merman the maximum height of building was 10.5 metres. The Double Bay site sloped steeply from the rear — with an overall fall of around 24 metres. On the site there is an existing residential flat building — which was proposed to be demolished and replaced.
A portion of the site was excavated for the construction of the existing building and the ground level was lowered by the excavation within the footprint of the existing building. The proposed development was greater than 10.5m above the excavated ground level within the footprint of the existing building.
If the excavated ground level was used as the reference point for the 10.5 metre height limit, there would be a dip in that plane that does not reflect in the overall topography of the hill.
The proponent said that the proposal was compliant with the maximum building height when the existing ground level on the site — outside of the footprint of the existing building — is used to determine the maximum building height plane.
The Court did not apply the Bettar decision and instead said (at ) that:
- the existing level of the site at a point beneath the existing building is the level of the land at that point; and
- the ‘ground level (existing)’ within the footprint of the existing building is the existing excavated ground level on the site.
As a result, the Court said that the proposed new building exceeded the maximum building height standard where the vertical distance is greater than 10.5m — measured from the excavated ground level (within the footprint of the existing building) to the highest point of the proposal directly above.
However, this finding was not the end of the matter. Even though, in this case, the development proponent had considered that the proposal complied with the height limit, we submitted a ‘contingent’ request to contravene the building height standard under ‘clause 4.6’ of the LEP.
(‘Clause 4.6’ is a well-known provision that — in simple terms — allows development standards to be varied when their strict application would be unreasonable in a particular case.)
The Court accepted (at ) that there is an ‘environmental planning ground’ that may justify the contravention of the height standard under ‘clause 4.6’ when the prior excavation of the site (within the footprint of the existing building) distorts the maximum building height plane.
The clause 4.6 request was upheld and development consent was granted.
Applying the height control on brownfield sites going forward
This new decision represents a significant break from the established Bettar approach.
The Court did not explain why the Bettar approach was not followed. It is possible that the Court considered that Bettar did not apply because, in Bettar, there was a distinct ‘basement’. A ‘basement’ is defined as ‘the space of a building where the floor level of that space is predominantly below ground level (existing)’. This definition was one of the reasons advanced to support the original Bettar decision.
The existing floor levels excavated into the hillside in Merman did not have precisely the same characteristics as the basement in Bettar. However — if this was the basis for distinguishing the development in Merman from that in Bettar — it does create some uncertainty (about when to apply the differing approaches).
It remains to be seen whether other commissioners or judges will follow Bettar or the revised approach now articulated in Merman (and which forms of basement/excavated ground levels will be subject to which regime).
Nonetheless, in light of the latest decision, it is now prudent for a developer preparing a development application for a brownfield site to establish the existing level of the site at a point beneath an existing building. It would also be sensible for a ‘clause 4.6’ request (‘contingent’ or otherwise) to be submitted for any variation from the maximum building height standard — as measured from the existing excavated ground level on the site.
Complications may arise on sites where ‘clause 4.6’ is not available.