Voluntary planning agreement relating to residential
subdivision in the Lower Hunter region
The case related to a proposed residential subdivision in the
Lower Hunter region south of Branxton in New South Wales,
comprising some 1,702 hectares of land, with an expected yield of
7,200 new residential dwellings, to be constructed over a period of
As part of the project, the developer, Huntlee Pty Limited,
entered into a planning agreement with the Minister for Planning
and the Minister for Environment. Among other things, the agreement
required the developer to dedicate 5,612 hectares of
environmentally significant land for conservation purposes, provide
a monetary contribution of $1,000,000 for conservation works and
pay a contribution of $100,000 towards the recovery of certain
Rezoning of the land declared void as a result of voluntary
A local community group, Sweetwater Action Group Inc, challenged
the Minister's decision to rezone the land. Sweetwater argued
that in entering into the planning agreement with the developer,
the Minister failed to have proper regard to how the
developer's commitments under the planning agreement might be
enforced if the developer failed to make good on those commitments
as and when required.
His Honour concluded that "suitable means, such as a bond
or guarantee" required an additional, independent and
enforceable assurance that the developer's promises would be
honoured. As a result, the rezoning of the land by the Governor was
Enforcing voluntary planning agreements by "suitable
The decision was overturned in the NSW Court of Appeal.
The Court of Appeal held that the use of the expression
"suitable means" in the Act reflects a very wide range of
obligations that a planning agreement may impose on a developer and
a variety of mechanisms for enforcement of those obligations that
may be suitable.
Among other things, the planning agreement:
had imposed a liability on the developer to make development
contributions by a series of instalments amounting to $1.1 million
had established a suitable means of enforcement of that
obligation in the event of a breach
contained provisions for registration on title, which meant
that the developer's obligations ran with the land
Safeguards were also in place to minimise, if not eliminate
entirely, the risk of insolvency, including the effect of
registration of the planning agreement on successive owners of the
The Court of Appeal held that despite the absence of bank
guarantees and the like, the planning agreement complied with the
requirements of the Environmental Planning and Assessment
Implications of Huntlee v Sweetwater decision for
The decision has been welcomed by the development industry. It
provides greater flexibility for developers to adopt a range of
measures under planning agreements for security arrangements
relating to contributions. Developers are no longer necessarily
required to pay up-front bank guarantees or bonds.
If you have any further queries in relation this article or in
relation to voluntary planning agreements, please do not hesitate
to contact us.
The Council announced planning policies to encourage more inner suburban retirement village and aged care development.
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