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Crown Resorts, Lendlease win legal fight against government over harbour views

Crown Resorts and Lendlease have succeeded in securing a court injunction against the NSW government in an effort to protect valuable views of the Sydney Harbour Bridge and the Opera House from their respective developments.

In August, Crown and Lendlease initiated proceedings against the Barangaroo Delivery Authority (BDA), the NSW government body responsible for the development of Barangaroo, over concerns that an increase in developable floor area for the 5.2-hectare Barangaroo Central development would block views from the Crown Resorts casino hotel tower designed by Wilkinson Eyre and Lendlease’s residential apartment tower designed by Renzo Piano Building Workshop.

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The Supreme Court of New South Wales has now found that the BDA breached its agreements the two companies, which “contain provisions intended to protect those views.”

Justice Robert McDougall prefaced his decision with the statement: “On the eastern shore of what is now Darling Harbour, where once Aboriginal people went about their daily lives, and later, in the Great Depression of the 1930’s, men fought for jobs, thousands of Australians now work in air-conditioned comfort. Competition for work and wages has been replaced by competition for that most characteristic of Sydney fixations: harbour views. How did this transformation occur?”

The masterplan for Barangaroo Central by Skidmore Owings and Merrill and Sydney firm Andersen Hunter Horne.

The masterplan for Barangaroo Central by Skidmore Owings and Merrill and Sydney firm Andersen Hunter Horne.

Image: Barangaroo Delivery Authority

In his judgment, Justice McDougall acknowledged that while the agreements “recognize that optimization of the development of Central Barangaroo is of critical importance to the Authority” they also “recognize that retention of the sight lines is of critical importance to Crown and Lendlease respectively” and that “the Authority must discuss and negotiate in good faith with Crown and Lendlease to seek to agree changes that would retain the sight lines while at the same time optimising development opportunities.”

Crown and Lendlease claimed that the BDA “never negotiated in good faith” in the process of seeking a preferred developer for the project – a claim which the BDA denied.

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Barangaroo Central was originally slated to have a maximum development area of 59,225 square metres in 2010. However, in 2015, an underground train station was announced for the area as part of the Sydney Metro project.

The BDA launched a tender for the design, development and delivery of Barangaroo Central in 2015. As part of the tender process, bidders were encouraged to “explore below-ground opportunities that make best use of the metro station” and to submit proposals for no more than 150,000 square metres of above-ground floor area.

In January 2018, the BDA awarded the tender to a consortium comprising Grocon, Aqualand and Scentre Group. A development application for Barangaroo Central has not yet been made.

The BDA argued its agreements with Crown and Lendlease did not contain clauses which guaranteed the protection of the sight lines.

“[The Sight Lines Clauses] were intended, objectively, to give Crown and Lendlease what might be called a seat at the table, enabling them to negotiate with the Authority about the form of development of Central Barangaroo, if it were proposed to differ from that for which the Concept Plan then provided,” said justice McDougall.

“Crown and Lendlease submitted that the discussions must start with retention of their sight lines, and that the process of optimizing development opportunities was restricted, in effect, to those opportunities that remained on the assumption that the sight lines were retained. The Authority’s position was that the two objectives were of equal importance, and that it was not necessary to start from the proposition that the sight lines should be retained.”

The judge concluded “the parties should at least start with the proposition that the sight lines are to be retained.

“In my view, because the Authority never contemplated, as a starting point, the retention of the sight lines, it did not [discuss and negotiate in good faith].”

The judge will make orders relating to the case on 17 December.

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