Australia: Understanding the Gerhardt Cases and their implications for developers

Last Updated: 28 October 2016
Article by David Nicholls

There have been five decisions of the Planning and Environment Court and the Queensland Court of Appeal involving a private certifier, Mr Gerhardt, which has caused a flurry of activity over recent months with the State Government actively considering legislative changes to attempt to deal with problems exposed by the Courts' decisions. This article provides an analysis of the more recent decisions and examines the potential legislative responses.

Some relevant background

At the outset, it is worth explaining the issue which is at the heart of the litigation. It concerns the distinction between building work and material change of use, and the proper roles of private certifiers and local Governments in relation to the former.

The issue has been brought into sharp focus in Brisbane in the context of traditional building character overlays which impose restrictions on the alteration or demolition of pre-1947 houses in various parts of the city. An explanation of the operation of these restrictions provides some relevant background which will assist in explaining the Brisbane City Council's concern arising from the earlier judgments, and the need for the State Government to consider amending the legislation.

Ordinarily when an owner wished to re-develop land containing a pre-1947 dwelling within the traditional building character overlay, an application would have been made to the Council for a preliminary approval to demolish the house. Such an application would be assessed against the Traditional Building Character (demolition) Overlay Code. Conflict with that code would arise, usually resulting in refusal of the application, if performance outcome PO5 of the code was not satisfied. PO5 is in the following terms:

"Development involves a building which:

  • Does not represent traditional building character; or
  • Is not capable of structural repair; or
  • Does not contribute positively to the character of the street."


The recently settled approach of the Planning and Environment Court to PO5 (c) is to consider the whole of a street rather than the parts of it that are made up of pre-1947 dwellings, and to assess the character of the street as a whole1 . A pre-1947 dwelling may contribute positively to the character of a street where that character is mixed. Visual character has to be a significantly prominent modern one, excluding any realistic co-existing character, in order to eliminate the possibility of a positive contribution by a pre-1947 house2 . Thus PO5(c), as interpreted by the Court, sets the bar rather high.

The strength of the controls in place for regulating the demolition of character houses underscores the Council's concern about demolition that has recently been approved without any assessment by the Council against the demolition code.

Alterations to a character house are assessed against the Traditional Building Character (design) Overlay Code. This code requires a pre-1947 house to be retained in its original setting and to compliment other nearby pre-1947 houses on the same street.

Summary of the Gerhardt Series of Cases

The following is a thumbnail sketch of the Gerhardt litigation to date.

Gerhard v Brisbane City Council (2015) QPEC 34 July 2015 (Gerhardt No. 1). The development involved construction of a carport entry, alterations and changes to the external façade of a character house. The application was referred by the certifier to the Brisbane City Council as a concurrence agency. The Council refused to respond and insisted that the proponent make a development application for a preliminary approval for building work to be assessed against the planning scheme. The Court declared that no such application was necessary and that the certifier was at liberty to approve the development as if there were no concurrence agency requirements, because the Council had failed to give a concurrence agency a response within the time required under the Sustainable Planning Act 2009 (SPA). The key finding in this case was that the approach that had been taken by the Council of requiring an application for a preliminary approval for building work for alterations to a character house was not valid.

Brisbane City Council v Gerhardt (2016) QCA 76, April 2016 (Gerhardt No. 2). The Queensland Court of Appeal upheld the Planning and Environment Court's decision in Gerhardt No. 1. The Court confirmed that when section 83 of the Building Act 1975 (BA) refers to a "necessary" preliminary approval, it means one for which there is a necessity under the SPA. The SPA says that a person may apply for a preliminary approval but it is not necessary to do so. In effect, section 83(1)(b) of the BA operates when a preliminary approval has been applied for, but it does not mean that it is necessary to obtain one. In those circumstances the preliminary approval must be effective for the assessment of the building work against the planning scheme before the certifier decides the building application. However, if no application for a preliminary approval has been made, the certifier may proceed to determine the building application.

Gerhardt v Queensland Building and Construction Commission (2016) QCA 136, May 2016 (Gerhardt No. 3). In August 2013 the Queensland Building & Construction Commission (QBCC) decided that the certifier had engaged in unsatisfactory conduct contrary to section 83(1)(b) of the BA which is the same section that was central to the decisions in Gerhardt No's 1 and 2. The building and work involved relocating a pre-1947 house on a double block of land at Annerley, reconfiguring two lots and building two multi-unit dwellings at the rear. The certifier did not assess the work against the relevant town planning requirements. A member of the Queensland Civil and Administrative Tribunal (QCAT) set aside the QBCC's decision. This was reversed on appeal by the QCAT Appeal Tribunal. The Court of Appeal upheld the Appeal Tribunal's decision. The Court of Appeal's decision is relevant because it confirmed the earlier approach of the Court of Appeal in Gerhardt No 2 and of the Planning and Environment Court as Gerhardt No 1 as to whether the Council is a concurrency agency for a building application. In this appeal, the certifier argued that the Council was not a concurrency agency for the application on the basis that the Council did not, in terms of the Sustainable Planning Regulation 2009, Schedule 7, Table 1, Item 17, "by resolution, or in its planning scheme declare" the building work for a building or structure is in a locality and of a form that may have an extremely adverse effect on amenity or be in extreme conflict with the character of the locality.

The Court of Appeal held that while there was no declaration by the Council per se, the provisions of the planning scheme provided the necessary "declaration" in terms of their intent and operation. Therefore the certifier should have given the Council the opportunity to assess the work. The Court of Appeal also confirmed that section 83(1)(b) of the BA does not require a preliminary approval to be obtained from Council for building work. In this respect, the Court of Appeal found that an error had been made by the QCAT Appeal Tribunal but, in the end, it was not material to the outcome of the appeal which upheld the original decision of the QBCC that the certifier had engaged in unsatisfactory conduct.

Gerhardt v McNeil (2016) QCA 2007, August 2016 (Gerhardt No 4). In relation to the certifier's actions with respect to the development of the Annerley house, the Council brought prosecution proceedings in the Magistrates Court resulting in convictions being recorded and a fine being imposed. An appeal by the certifier to the District Court against the conviction was dismissed. Following the Court of Appeal delivering its judgments in Gerhardt No 2 and No 3, the certifier applied to extend the time to appeal to the Court of Appeal against the convictions.

The Court of Appeal granted leave and set aside the convictions because they had been recorded on the basis that an effective preliminary approval for building work was required before the certifier could approve the building work, whereas the Court of Appeal had decided otherwise, and it was undesirable for the conflicting decisions to stand.

Gerhardt v Brisbane City Council (2016) QPEC 48, September 2016 (Gerhardt No 5). This case involved an application to the certifier for a development permit for building work being the demolition of two pre-1947 houses at Morningside. The certifier argued that the Council was a concurrency agency with jurisdiction to assess the planning aspects while the Council asserted that a separate application for a development approval was required. The certifier sought declarations that no separate development application to the Council was needed.

This case raised similar questions to those in Gerhardt No 1 and at first sight appeared to involve re-consideration of the same questions that had already been decided by the Queensland Court of Appeal in Gerhardt No 2 and No 3. The position was different however because Gerhardt No 1 and No 2 involved physical building work ie construction of additions and alterations, whereas this case involved demolition, and under City Plan 2014 the "building assessment provisions" identified in table 1.6.1 do not include the traditional building character (demolition) overlay code. Rather the building assessment provisions only encompass the Traditional Building Character (design) Overlay Code. It followed that the certifier had no role in assessment of the application against the demolition code. There would have to be a separate assessment manager, namely the local government, with respect to the demolition component that was required to be assessed against the planning scheme.

The Planning and Environment Court considered the Court of Appeal's reasoning in Gerhardt No 3 to be distinguishable. The court took the view that to "declare" something in a planning scheme requires a formal express statement and cannot merely be implied from the purpose, intent or subject matter of the demolition code.

City Plan 2014 contains an express declaration in section 1.7.4 in the terms contemplated by Item 17 (b) of the Sustainable Planning Regulation 2009, but it only has effect with respect to the Traditional Building Character (Design) Overlay code. The result was that in this instance, the Brisbane City Council was a concurrence agency for the application and the application should have been referred to it by the certifier.

Overall outcome of the Gerhardt Cases

The outcome of Gerhardt No 5 was that the certifier's application for declarations was dismissed. The certifier's approval of the building (demolition) work remained valid but the Court's reasons make it clear that the owner of the land cannot implement that approval without also obtaining a preliminary approval for building work (demolition) assessed against the planning scheme. In consequence there is now a dichotomy between applications for construction work in relation to a character house, where the Council is a concurrence agency, and demolition of a character house, where it is not.

It is understood that Mr Gerhardt has filed an application for leave to appeal to the Queensland Court of Appeal against the Planning and Environment Court's decision in Gerhardt No 5.

Where to from here?

The Gerhardt series of cases highlights the difficulties inherent in trying to regulate "building work" through planning schemes. This has come to the fore in recent times in several contexts but more particularly in relation to character housing and local heritage.

Obviously there needs to be a clear pathway for development that does not involve material change of use to be assessed against the relevant aspects of the planning schemes, but care needs to be exercised to avoid over complicating the development assessment system.

The fundamental objectives of any legislative reform should be:

  • Assessment should be undertaken by the most appropriately qualified assessment manager.
  • There should be clear demarcation of responsibility and accountability for each aspect of the building work.
  • Assessment of each aspect of the building work should be able to happen concurrently, while not resulting in an exercisable approval of the building aspects, without independent or concurrent approval of the planning aspects of the building work.

Because the scope of the assessment of the planning aspects of building work is relatively narrow, involving technical assessment against the relevant overlay code, there should be no need to subject it to impact assessment. Consequently the possibility of opening up such building work to impact assessment ought not influence the approach to be taken to finding the legislative solution.

The following pathways appear to be available:

  • One application may be made to the local government for both the planning and building aspects of the work. Under the SPA the local government currently has authority to undertake a complete assessment of such an application3;
  • Applications could be made separately to the local government and a private certifier for assessment of the planning and building aspects respectively;
  • An application could be made to a certifier for both aspects, but the certifier may only assess the building aspects and must refer the planning aspects to the local government as a concurrence agency, and await a decision before granting the building approval.

Appropriate limits need to be maintained through the regulations around the nature and extent of the aspects of building work that may be regulated through a planning scheme. Such regulation should only occur for legitimate planning purposes. There should be a clear distinction, by way of the terminology used, between the building and planning assessment aspects of building work. The former should be the subject of a building development application under the BA however the latter may be the subject of either a separate application for a development approval for building work, for example, "building work (character assessment)", which is assessed and decided under the planning scheme. Alternatively it may be the subject of concurrence agency assessment by the local government for the same purpose.

It does not seem to matter whether this happens through separate applications or through concurrence assessment provided it is possible for the two aspects of the building work to be assessed concurrently (in the interests of efficiency). However the building development approval should not become effective unless and until the planning component of the building work has been approved by the local government.

Footnotes

1 Guiney v Brisbane City Council [2016] QPEC 26

2 Lucas v Brisbane City Council [2015] QPELR 671 paragraph [37]

3 Sustainable Planning Regulation 2009 Section 12(3) and Schedule 6 Table 1

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