May 2020

Development Consents and Appeal Rights extended in the face of the COVID-19 Pandemic

With assent to the COVID-19 Legislation Amendment (Emergency Measures – Miscellaneous) Bill 2020 (the Bill) on 14 May 2020 comes the latest of the NSW Government’s suite of legislative changes to mitigate the impacts of the pandemic.

In this bulletin, the amendments made to some of the critical statutory timeframes under the Environmental Planning and Assessment Act 1979 (the Act) are outlined and considered.

Lapsing of Development Consents

The Changes

Section 4.53(1) of the Act previously stated that a development consent lapses 5 years after the date from which it operates (unless the development the subject of the consent is physically commenced under section 4.53(4)).

The amendments provide that:

  • Any development consent that commences operation during or after the prescribed period of 25 March 2020 to 25 March 2022 (the prescribed period) will lapse 5 years after the date from which it operates;

  • Consent authorities cannot reduce the 5-year lapsing period for development consents granted during the prescribed period; and

  • Any development consent that would have lapsed during the prescribed period will lapse 2 years after the date on which it would have otherwise lapsed.

The same amendments have been applied to section 4.53(6) of the Act, relating to deferred commencement consents.

Implications

Consents granted within the prescribed period now have a minimum, mandatory lapsing period of 5 years and consent authorities are not permitted to reduce this timeframe (previously consent authorities could reduce the period to as little as 2 years).

Of most use to developers, and something that consent authorities should be aware of, is that the lives of development consents that would otherwise have lapsed between 25 March 2020 and 25 March 2022 are extended, providing developers who have been unable to commence a development due to the impacts of the pandemic with the right to act on the consent for 2 years after it would otherwise have lapsed.

Existing and Continuing Uses

The Changes

Section 4.66(3) of the Act previously provided that an existing use was presumed (unless demonstrated to the contrary) to have been abandoned if it had ceased being carried out for a continuous period of 12 months.

This remains this case but a new section 4.66(4) has been inserted into the Act which states that between 25 March 2020 and 25 March 2022, the 12-month period is extended to 3 years.

The same extension (for the same specified timeframe of 25 March 2020 and 25 March 2022) has been made for continuing uses under section 4.68 of the Act.

Implications

An existing use can be a highly valuable right.

It allows the continuance of the use of a building, work or land for a purpose that has otherwise become prohibited under an environmental planning instrument (provided the use was lawfully commenced prior to the prohibiting instrument coming into force).

If such a use were to be abandoned, it would become prohibited development and a new development consent for the use could not be granted.

These amendments ensure that uses forced to cease as a result of the pandemic have additional time to re-commence before they are deemed to have been abandoned.

The same extension applies for a continuing use, meaning that a permissible use forced to cease due to the pandemic will not require new development consent to re-commence operations within 3 years.   

Merit Appeals

The Changes

Under division 8.3 of the Act, applicants and objectors (objecting to designated development only) have the right to appeal decisions to refuse or to grant development consent in the Land and Environment Court.

Previously, section 8.10 of the Act had limited the timeframes for such appeals to be made to 6 months for applicants, and 28 days for objectors. 

This has been amended so that:

  • Applicants for development consent have 12 months in which to appeal a decision made during, or 6 months prior to, the prescribed period (25 March 2020 to 25 March 2022); and

  • Objectors (to designated development) have 56 days in which to appeal a decision made during, or 6 months prior to, the prescribed period.

The former timeframes (6 months for applicants and 28 days for objectors) will apply to development consents granted after the prescribed period.

Implications

The amendments provide applicants and objectors with double the usual time within which to commence appeals.

This will assist particularly where the pandemic has disrupted a party’s ability to commence proceedings in the shorter timeframes following an adverse decision by a consent authority.

It also provides developers running out of time to file an appeal with an extension and the opportunity to act on their right of appeal (which could otherwise have been lost).

Regulation made on Physical Commencement

The Changes

In addition to the above changes to the Act, on 15 March 2020 a significant change to the Environmental Planning and Assessment Regulation 2000 (the Regulation) was announced in relation to the commencement of development consent.

Section 4.53(4) of the Act provides that development consent does not lapse if building, engineering or construction work relating to the building, subdivision or work is physically commenced on the land to which the consent applies before the date on which the consent would otherwise lapse […].

What constitutes “physical commencement” has been a subject of significant debate as sometimes minimal work is undertaken on a development site in an effort to prevent the consent from lapsing.

Clause 124AA has now been inserted into the Regulation and states that work is not taken to have been physically commenced (and thus a development consent is not saved from lapsing) merely by the doing of any one or more of:

(a)  creating a bore hole for soil testing,

(b)  removing water or soil for testing,

(c)  carrying out survey work, including the placing of pegs or other survey equipment,

(d)  acoustic testing,

(e)  removing vegetation as an ancillary activity,

(f)  marking the ground to indicate how land is to be developed.

Implications

This amendment to the Regulation raises the level of works required to be undertaken to physically commence a development consent.

A tightening of the scope of works is at odds with the amendments made to the Act which generally assist developers in the face of pandemic-related challenges. In this regard, the timing of the amendment to the Regulation is curious.

It also overturns the leading NSW Court of Appeal authorities on physical commencement, including:

  • Hunter Development Brokerage Pty Ltd v Cessnock City Council; Tovedale Pty Ltd v Shoalhaven City Council [2005] NSWCA 169, in which land clearing, pegging out, survey marking, and geotechnical work was deemed to be physical commencement of development consent relating to subdivision; and

  • Cando Management and Maintenance Pty Ltd v Cumberland Council [2019] NSWCA 26, in which Court recently held that the clearing of shrubs from land in accordance with a development consent constituted physical commencement.

Despite the amendment, whether work has been undertaken to constitute physical commencement will remain a question of fact and degree, relevant to the specific development for which consent has been granted and the type of works undertaken.

Development consents granted prior to 15 May 2020 are not affected by this clause.

Author: Steven Griffiths

Contributing Partner: David Creais