Property developers who appeal to the NSW Land and Environment Court and who decide that a proposed development should be amended run the risk that the Court will order them to pay the Council's costs for the original proposal.
The issue has emerged from a recent Land and Environment Court decision by the newly-appointed Senior Commissioner (Moore SC) in Cachia v Manly Council (No. 2)  NSWLEC 1107. The decision appears to be the first involving section 97B of the Environmental Planning and Assessment Act 1979 (NSW).
Section 97B provides:
97B Costs payable if amended development application filed
- This section applies to proceedings if the Court, on an appeal by an applicant under section 97 allows the applicant to file an amended development application (other than to make a minor amendment).
- In any proceedings to which this section applies, the Court must make an order for the payment by the applicant of those costs of the consent authority that were incurred in respect of the assessment of, and proceedings relating to, the original development application the subject of the appeal.
- The regulations may provide for circumstances in which subsection (2) does not apply.
- This section has effect despite the provisions of any other Act or law.
Section 97B relates to Class 1 appeals in the Land and Environment Court that are commenced on or after 1 September 2008. It also relates to all types of development applications that are the subject of Class 1 appeals eg residential, commercial, industrial. It is important to note, section 97B relates to the costs of consent authorities, in respect of the original development application, not the costs associated with the amended applications. Costs associated with amended applications will be subject to the usual test of what is 'fair and reasonable in the circumstances' (Rule 3.7 of the Land and Environment Court Rules 2007).
In the Cachia proceedings, the appeal involved a refusal of an application for the erection of a dwelling. The main merit issue was whether the proposed first floor setback from the northern boundary of the site was acceptable.
The Senior Commissioner determined that issue by stating that a particular increased setback would be required.
As a consequence of that determination, it was necessary, if the proceedings were to continue, for the applicant to file an amended development application.
Section 97B then became an issue. The Council argued that the section applied and that the Court was obliged to order the applicant to pay the Council's costs relating to the original application. The applicant argued to the contrary.
The Senior Commissioner pointed out that for section 97B to be of effect, two steps are necessary:
- Firstly, that the Court allows the applicant to file an amended development application.
- Secondly, that the amended development application not constitute 'a minor amendment'.
The Senior Commissioner examined the meaning of 'minor amendment'. He referred to a 1996 decision of a judge of the Land and Environment Court in Coshott v Woollahra Council  NSW Land and Environment Court 256. On the basis of that judgment, the Senior Commissioner said:
'It is clear that the matter that I need to determine is one of fact and degree. The words that are used by Bannon J in (that) (sic) Coshott, on two occasions, relates to the (relative or overall) effect of the changes being minor.
I am satisfied that it would be appropriate, consistent with what his Honour said in Coshott and consistent with the legislative intention, to have regard not to the number of amendments but, whether in the context of the issues that are pressed by the council, the total effect of the changes are minor or not.'
The Senior Commissioner concluded that the amendments in question were not minor and consequently section 97B would apply if the applicant sought the Court's approval to file an amended development application.
The amendments would have involved a change to the setback from the northern boundary and alterations to the streetscape façade. Both of these amendments were considered by the Senior Commissioner to be significant amendments. Although there was also a 'complete re-arrangement of the internal spaces', the Senior Commissioner concluded that such internal amendments could be regarded as minor because there were no external consequences.
The Senior Commissioner said that he came to his conclusion with some reluctance because he was aware that the applicant could choose to abandon the appeal and instead submit an application to a private certifier pursuant to SEPP Exempt and Complying Development Codes 2008 using the original design which 'would have significantly greater adverse impacts on the neighbours...'.
Not surprisingly, when the applicant was told that section 97B would apply if the development application was amended, the applicant informed the Court that she did not seek leave to amend the development application and would rather have the Court simply refuse the application.
As a consequence, the application was refused by the Court and the appeal was dismissed.
In this case, the applicant had the option of allowing the appeal to be dismissed and, instead, submitting a further development application to a private certifier. Options like that are likely to be quite rare in future Court proceedings.
Property developers who are involved in an appeal to the Land and Environment Court should consider section 97B before proposing that a development application be amended. A crucial factor will be whether the proposed amendments can be considered 'minor'.
The judgment in Cachia provides some assistance in what a Court might consider 'minor' and when the Court is likely to order the developer to pay Council's costs relating to the original proposal.
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