Australia: NSW Planning, Environment & Government Update - June 2008

Comprehensive changes to NSW planning laws have now been passed and will soon take effect, but some important changes have been made since the Draft Exposure Bill and are detailed in this update.

The Environmental Planning & Assessment Amendment Act 2008 was passed by parliament last week However, the original Bills (which were considered in our April 2008 update here and our December 2007 update here) have been amended along the way in some key respects. Please refer to those earlier updates for a more general discussion of the planning reforms.

It is important to note that the new planning laws have not yet commenced. They will not commence until the detailed Regulations have been made. gadens lawyers understands that the Regulations will be rolled out in segments as soon as they are ready, to avoid delay, so that at least some of the new planning laws can commence very quickly – probably by July 2008.

Key changes made to the Draft Exposure Bill after the consultation period and its passage through parliament include:

• removal of the proposed ability for councils to compulsorily acquire land for an urban renewal proposal or an urban land release and on-sell it to developers for profit. However, the June 2008 Court of appeal decision in the matter of Parramatta City Council v RR Fazzolari and Others suggests that this can occur in certain circumstances in any event. That decision may soon be appealed to the High Court;

• broadening of the range of people who may be appointed as Planning Assessment Committee (PAC) members (the PAC will effectively deal with State Significant Development) to include persons with legal, engineering, traffic, transport or tourism skills; and

• a lowering of the threshold at which commercial or retail development will be taken out of the hands of local councils and be dealt with by Joint Regional Planning Panels (JRPP) (lowered from $50 million to $20 million). However the threshold for residential and mixed use development will remain at $50 million.

Review processes

The Draft Exposure Bill proposed a system by which the decisions of Councils could be appealed and the applicant would have the choice of appealing to a JRPP or a PAC or to the Land and Environment Court. This controversial proposal led to accusations that the system would promote "forum shopping" for appeals, and has been removed from the Amendment Act.

However, the significant reduction of the time to appeal has been maintained from the Draft Exposure Bill. Applicants will now only have 3 months, rather than 1 year, in which to appeal a determination or deemed refusal. This means that the right to appeal a deemed refusal will often be lost as little as 18 weeks after initial lodgement of the application with Council – in those cases, applicants will need to wait for an actual refusal in order to appeal, however long that may take.

Planning arbitrators

Further clarification has been provided in regards to planning arbitrators. The Amendment Act provides that applicants for minor development applications (see below) will have to apply for review by a planning arbitrator before being allowed to appeal to the Court (unless Council consents to an appeal directly to the Court). This process replaces the old section 82A review process by which Council decisions could be the subject of a review by the Council itself. The review will now be by an external arbitrator, not the Council, and is generally mandatory before any appeal can be commenced.

While it was previously proposed that the local Council would be able to appoint the arbitrator (which led to concerns as to the independence of the arbitrator), arbitrators will now be appointed by the Director-General of the Department of Planning and more than one arbitrator may be appointed to review complex matters.

The matters that an arbitrator may handle will be specified in the regulations and will include:

The previous proposals that it might cover all residential dwelling houses, or all residential work up to a cost of $1million, have been dropped. This will make it more difficult to understand what matters are planning arbitrator matters, as it will depend on the height and the number of storeys of the building (which in turn may depend on the slope of the land and the definitions of 'storeys' and 'height' in the relevant Local Environmental Plan).

Importantly, only an applicant may appeal to the Land and Environment Court against the decision of an arbitrator and councils will not have a right of appeal.

Matters that are not Planning Arbitrator matters (such as residential buildings more than the specified height) will only be able to be reviewed by the Land and Environment Court, by way of an appeal.

Objector appeals

As foreshadowed in the Draft Exposure Bill, there will be a new type of third-party review known as "neighbourhood reviews". Note that this is a "review", not a Court appeal. This review process will apply to certain types of commercial and residential developments including:

A person will be able to seek a review within 28 days of a determination, but only if they have made a submission objecting to the development and if they own or occupy land within a one-kilometre radius of the subject land. Commercial competitors are prevented from taking advantage of "neighbourhood reviews" for the sole purpose of securing a financial advantage. Furthermore, reviews will not be available where the development is a planning arbitration matter or in the case of designated, integrated or crown development. The JRPP will conduct reviews of Council decisions and the PAC will conduct reviews of JRPP decisions.

Cost of amending application in Court

The Draft Exposure Bill provided that an Applicant would have to pay Council's entire costs of the proceedings where the Court approved an amended application which was 'significantly different' from the original application (where the amendment was at the request of the Applicant). The Amendment Act has removed this cost liability and instead imposes an automatic liability upon an Applicant to pay Council's costs thrown away in the assessment of the previous application whenever the Court allows an Applicant to rely on an amended application (unless the amendment is only minor). These costs are paid at the time of amendment and are not dependent on the outcome of the appeal. The Court will decide whether the amendment is of a sufficiently minor nature to avoid a costs order.

Private certifiers

Where the Draft Exposure Bill would have granted certifiers the power to issue a complying development certificate even where the development included non-compliance of a 'minor nature', this power has been removed from the Amendment Act. In relation to interim occupation certificates, the current "fit for purpose" test remains but the certifier will have to identify on the certificate the extent and nature of any inconsistencies with the consent.

Certifiers will be able to seek Council's advice / opinion before issuing a complying construction certificate. If a Council fails to respond within 21 days it will be prevented from challenging the complying construction certificate. This will give certifiers an extra layer of comfort in forming a view that a certificate can and should be issued. Note however that the Council's opinion is simply that – an opinion. It may not necessarily be correct and is not binding on the certifier. A certifier may for example prefer to rely upon legal advice or on his/her own professional judgement.

Substantial commencement

It was proposed that all development consents, even old consents already issued, would lapse if not substantially commenced within two years from the lapse date – in some cases, that would have resulted in retrospective lapsing of old consents that have not yet been "substantially" commenced (and the law does not presently require "substantial commencement", only "physical" commencement). While the Draft Exposure Bill contained no savings or transitional provision to protect those consents, the Amendments now contain transitional arrangements so that consents that were issued before the relevant provisions commence will not be affected by these changes.

Contributions and levies

The Bill provides that councils can automatically fund 'key infrastructure' through local infrastructure levies, however they cannot 'double-dip' by levying at both the subdivision stage and on approval of a development application for a dwelling house that was envisaged in subdivision.

'Key infrastructure' is now defined by the Bill and includes community and child care facilities, libraries, volunteer rescue and emergency services.

Council decision making

The Regulations will be amended to provide that Councils are required to give reasons justifying their decisions where they are not in accordance with a recommendation of Council's planners. Therefore, where the Council staff recommend approval, and the Councillors decide to refuse the DA, reasons will need to be given to justify that decision. This is aimed at de-politicising decision-making, however it is likely that reasons could almost always be easily drafted. There is no requirement that the reasons be rational.

Establishment of other committees

The initial Amendment Bill sought to remove current section 22 of the Environmental Planning and Assessment Act 1979 which allowed the Minister and director general to establish committees. These committees serve a number of different purposes, including providing advice to the Minister and the Director-General on matters relating to the administration of the Act. The Upper House agreed to reinstitute s 22.

The purpose of retaining and amending this section was primarily to provide a statutory mechanism by which to appoint an Implementation Advisory Committee to oversee the implementation of the new legislation. The Minister for Planning has already taken steps to consult about membership of the committee and to develop terms of reference. The advisory committee will include representation of a broad range of associations including the Planning Institute of Australia, the Royal Australian Institute of Architects, Local Government and Shires Associations, the Law Society of New South Wales and the Nature Conservation Council.

Independent Hearing and Assessment Panels

Section 23I of the Amendment Bill provided that councils may constitute a panel of experts to assess any aspect of a development application or a planning matter. Proposed s 23I(3) stated that the appointment of experts on these hearing and assessment panels is to be controlled by the Director-General. The Upper House amended this section to state that the members of the panel will be selected by local councils and that members will include members who have expertise in at least one area of planning, architecture, heritage, the environment, urban design, land economics, traffic and transport, law, engineering, tourism or government and public administration.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.