Australia: When does my development consent expire? What is physical commencement and why is it important?

"A development consent is a valuable asset. It is a statutory permission that authorises the carrying out of development on land, mostly for economic gain... It adds value to the land. Hence the prospect of a consent lapsing is apt to engender dismay in the holder of the consent."
CJ Preston in para 1 Kinder Investments Pty Ltd v Sydney City Council [2005]NSWLEC 737

In most situations, it is not great news for an owner or developer to discover a development consent that applied to their land may have expired. Getting to the point where a development consent was granted would usually have involved significant time and cost, so it can be more than disappointing to discover that benefit may have been lost.

Even if the current owner or developer may not have been ready or interested in proceeding with a development consent in the form originally granted, the existence of a development consent may have helped as a starting point for a modification application (also known as a section 96 application) to the council. [Note: a modification application can usually only be made if the proposed modified development is substantially the same as that originally approved.]

When does my development consent expire?

Development consents will expire on the expiry date specified in the development consent, usually a consent specifies a date that is 2 – 5 years after the date it is granted, unless:

  • physical commencement of "building, engineering or construction work relating to the building, subdivision or work" takes place on the site before the expiry date of the consent.
  • [s.95 Environmental Planning & Assessment Act, 1979 (NSW) ("EP&A Act")]

Can I change the expiry date specified on my development consent?

If the development consent was granted for a period of less than 5 years, then you can apply to the council for an extension and show "good cause" why the extension should be granted. The extension application must be lodged before the development consent expires. An extension of 1 year only may be granted through such an application.

If the council rejects the application (or doesn't make a decision within 40 days of lodgement) then you can appeal to the Land & Environment Court ("L&E Court") to make a decision about the extension application.

Any 1 year extension, if granted, will apply from the later of the date:

  • the consent would have expired – so, add 1 year onto the expiry date of the consent; or,
  • the application for the grant was granted by the council or approved by the L&E Court.

[s.95A EP&A Act for the above]

What is physical commencement?

If there is physical commencement of building, engineering or construction work on the site that relates to the subject of the consent before the expiry date of the consent, then your development consent may survive beyond the expiry date indefinitely – or at least until a subsequent event.

Usually, the test is applied to cases where fairly minimal physical work has been carried out on a site. Many of the cases relate to whether survey work, demolition, or testing on the site constitutes "physical commencement". It is a factual question of what work was carried out physically on the site. Off-site work does not does not count as physical commencement [refer to the leading Court of appeal judgement in: Tovedale Pty Ltd v Shoalhaven City Council [2005] 63 NSWLER 124].

Some useful cases that provide further guidance include:

  • Richard & Ors v Shoalhaven City Council [2002] NSW LEC 11. The consent in this case granted approval for the subdivision of land. The question was whether survey work carried out was an essential part of the engineering work required for the approved subdivision. The Judge found that "the taking of levels, placing pegs, the removal of vegetation and the establishment of marks, including the centre point of a road" were "part of the engineering work required for the establishment and construction of the subdivision". As the survey work had taken place before the lapsing date, the consent had not lapsed.

but... the work has to be carried out after the consent has issued and the work has to be legal, which means it must be carried out in accordance with the EP&A Act and in compliance with the conditions of the consent:

  • Biwazu Pty Limited v Cessnock City Council [2004] NSWLEC 411 involved a subdivision in the Hunter region. The conditions of the consent required that design plans be approved by the council before commencement of any works on the site. In this case the Judge was not satisfied that the physical works relied on had taken place after the consent had been issued. However, even if they had, as the works had been carried out without obtaining approval of the design plans from the council as required by the conditions, the works were unauthorised and could not be relied on as "physical commencement".

FYI: Consent to a section 96 (modification) application does not extend the time before lapsing

An approval to an application to modify a development consent does not re-start the clock. It is not possible to modify a consent through a modification/section 96 application which just seeks to extend the lapsing date on a consent [Kinder Investments Pty Ltd v Sydney City Council [2005] NSWLEC 737]. In the same case the Judge stated that sections 95 & 95A of the EP&A Act "were the only possible means and timings of lapsing of a development consent permitted by the statutory scheme" [para 40 of the judgement].

Next steps:

The expiry date on any consent is the starting point.

The terms of the development consent, whether an extension application is possible, whether physical commencement has occurred (and whether that physical work took place legally and relates to the development consent) will all require investigation before taking any steps.

The sooner that advice can be sought and investigations undertaken if necessary, then the better placed an owner or developer will be to take any necessary further steps available to avoid the potential loss of a valuable consent.

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.

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