Background and findings

In Equity Land Holdings Pty Ltd as Trustee for Equity Land Holdings Trust v Inner West Council [2026] NSWLEC 1346, the Court considered an appeal involving a five storey, 103-room co-living development. One of the reasons that the Council opposed consent being granted related to the design and form of the building, which in turn raised issues associated with the calculation of GFA and resulting Floor Space Ratio (FSR). A dispute arose in relation to whether external walkways along the eastern and western boundaries of the proposed development were GFA or excluded open-sided ‘breezeways’. Including them gave a GFA of 3,375 sqm (FSR 2.67:1), which was a 1,479.6 sqm variation from the FSR development standard. Excluding them gave a GFA of 2,893 sqm (FSR 2.29:1), a 997.6 sqm variation.

As readers will be aware, the GFA definition measures floor area ‘from the internal face of external walls’. Acting Commissioner Swan accepted the Council evidence and argument that the walkways were internal to external walls formed by the site’s boundary walls, which were connected to the building at every level. The Court rejected the submission that ‘internal face’ must mean inside the building itself, and held that an adjacent void did not prevent the walkways from being GFA.

Notwithstanding, the Court still upheld cl 4.6 variation to the FSR development standard and granted development consent.

The decision focusses on the proposition that the GFA inquiry starts with identifying a building’s external walls and then examining what is internal to that external wall.

Key passages from the judgment in relation to this issue are as follows:

‘[111] …I favour Council’s submission that the starting point is to determine what are external walls and then examine what is internal of that external wall. There is no reference in the definition to internal wall, which was referenced by Equity Holding’s counsel a number of times in cross examination and in submissions… There is also no reference to the internal face of external enclosing walls, which I provide as an example, where the word enclosing would address the inside/outside/ “open to the elements” dispute. There is only reference to identifying the external walls of the building and then looking to the internal face of those identified external walls.

[112] In my consideration, the starting point also starts at defining the building which is at the very opening of the definition. The walls most in contention are the walls on the eastern and western boundary… The east and west side boundary walls in contention are physically connected to the building at both the ground level and on each level (at the north and south ends) and are part of the building. The east west walls do not have the status of say a “fence” which is physically disconnected from a building and would not be considered an external wall of the building.

[113] I also agree with Mr Miletic that it does not matter if there is no floor (ie a void) directly adjacent to the east west walls along the boundary…’

Accordingly, the external walkway areas were counted towards GFA.

Differing approaches to the GFA definition

Whilst each particular development application will be assessed upon its own particular design and configuration, Equity Land Holdings may be viewed as another authority that highlights competing approaches that have been taken by the Court in relation to the interpretation and application of the GFA definition.

In GGD Danks Street P/L and CR Danks Street P/L v Council of the City of Sydney [2015] NSWLEC 1521, Commissioner O’Neill excluded an open-ended communal corridor from GFA, reasoning that an external wall performs a weatherproofing function distinguishing it from an internal wall, so a corridor exposed to the weather cannot be internal floor space. On that approach, exposure to the elements was considered relevant to identifying whether the space formed part of the building’s internal floor area. That reasoning has been followed in other cases such as HPG Mosman Projects Pty Ltd v Mosman Municipal Council [2021] NSWLEC 1243 and Emag Apartments Pty Limited v Inner West Council [2022] NSWLEC 1042.

A differing view was expressed in Landmark Group Australia Pty Ltd v Sutherland Shire Council [2016] NSWLEC 1577, which included partially open breezeway corridors as GFA, holding that perimeter openings did not alter the location of the building’s external walls. In Australex Group Pty Ltd v Fairfield City Council [2022] NSWLEC 1685, Commissioner Walsh held it would be ‘…at odds with the GFA definition, read in whole and in context, to exclude lengths of internal communal corridors which happened to have openings, at one or both ends, to the otherwise generally perceived building (and thus floor area) confines‘, preferring Landmark and disagreeing with Danks.

Conclusion

Equity Land Holdings is another decision by a Land and Environment Court Commissioner that adds to the existing authorities that deal with the interpretation of the GFA definition and its application in the context of determining whether to include semi-enclosed corridors/walkways or ‘breezeways’ as GFA in a particular development.

Whilst each case will depend upon the particular development in question, given the potential for reasonable arguments both ways as to whether to include these semi-enclosed spaces within GFA or not, it is suggested that legislative clarification in relation to the GFA definition may assist in providing greater certainty for developers, councils and legal practitioners.

This article was written by Philip Brown, Partner.