Australia: Ministerial Approval Of Lower Hunter Region Development Affected By ´Favourable Disposition´

Last Updated: 8 September 2009

Article by Felicity Rourke and Rebecca Pleming

On 31 August 2009 the Land and Environment Court held that Part 3A approvals granted by the former Minister for Planning (Former Minister) in relation to the development of land in the Lower Hunter Region of New South Wales were affected by a reasonable apprehension of bias1. In reaching the decision, the Court described the Former Minister as seeming to be "enamoured with the whole proposal of a land-bribe in exchange for rezoning and associated development".

In declaring the approvals in relation to Catherine Hill Bay and Gwandalan to be void and of no effect, Justice Lloyd held that a Memorandum of Understanding (MOU) and a Deed of Agreement (Deed) entered into by the Former Minister and developers were impermissibly taken into account as part of the decision making process and reflected both a favourable disposition and a solemn commitment by the Former Minister to the development from a point in time when the environmental assessment requirements under the Environmental Planning and Assessment Act 1979 (NSW) (EP&A Act) had not been completed.

How does this affect you?

The decision highlights the need for administrative decision makers to be impartial in their planning decisions and sets boundaries on the appropriate role of the Minister for Planning in land swap negotiations in circumstances where there is a planning application in contemplation. However, of wider relevance, this decision casts doubt on the role of planning deeds or agreements in the planning process where such agreements do not meet the requirements of a 'voluntary planning agreement' (VPA) under the EP&A Act. The case suggests that such agreements (not being VPAs) should be excluded from consideration by a decision maker, being either the Minister or a Council.


In October 2006, a MOU was entered into between the Minister for the Environment, the then Minister for Planning and the Second and Third Respondents (Rose Property Group Pty Limited and Lakeside Living Pty Limited) which had the effect of allowing sites at Gwandalan and Catherine Hill Bay to be developed for residential purposes and, in exchange, agreeing that certain land would be transferred to the New South Wales Government to be dedicated for conservation purposes. The MOU was later formalised into a Deed of Agreement made on 1 September 2008.

On 2 September 2008, the Former Minister effected the rezoning of land owned by Second and Third Respondents which achieved the objectives of the MOU and the Deed, enabling the land to be used for residential purposes, at the same time reserving other parts of their land for environmental conservation. This rezoning occurred by way of a special supplement of the New South Wales Government Gazette No 109, State Environmental Planning Policy (Major Projects) 2005 (Amendment No. 26).

On the same day, the Former Minister granted approval under Part 3A of the EP&A Act for:

  • a concept plan for development at Catherine Hill Bay (600 dwellings) and Gwandalan (187 residential lots); and
  • a project approval for the subdivision of land at Gwandalan into 187 residential lots and one residue lot, including civil works, a public road network and public domain improvements.

These agreements and approvals were carried out against the background set by the draft Lower Hunter Regional Strategy which, relevantly, did not identify either Catherine Hill Bay land or the Gwandalan land as being within either new release areas or future investigation areas. In fact, the strategy provided that the Wallarah Peninsular corridor, which includes the subject land at Catherine Hill Bay, was to be protected.


The proceedings were brought by Gwandalan Summerland Point Action Group Inc seeking declarations that both approvals were void and of no effect (and orders quashing the approvals) on the basis that:

  • at the time the Former Minister made the decision to grant the approvals, there was a reasonable apprehension of bias on the part of the Minister; and
  • in making the decision the Former Minister took into account the MOU and Deed (both being irrelevant considerations).

After considering the test for apprehended bias in relation to administrative decision makers, Justice Lloyd concluded that the test was satisfied in this instance in that a fair minded lay observer, having knowledge of the material objective facts might have apprehended that the Former Minister might not have brought an impartial and unprejudiced mind to his determination of the applications.

In making his decision, his Honour considered correspondence between the Department of Planning and the Crown Solicitors Office as well as internal communications and media releases and found that the Former Minister "publicly committed himself to a particular outcome and indicated a disposition to achieving a particular type of result, namely the specified development potential....this was done before the Pt 3A process had been commenced, let alone completed."

The existence of the MOU, by itself, gave rise to a reasonable apprehension of bias, even although it was expressed as not fettering the discretion of the Former Minister under the EP&A Act and even though the agreement was not legally enforceable. Most notably, Justice Lloyd stated:

"The assumption by a decision-maker of an undertaking, whether contractually binding or not, to exercise a statutory discretion in a particular way, may found a conclusion of apprehended bias."

Given that the applicant's claim of apprehended bias was made out, it was not strictly necessary for the Court to consider specifically the allegation that the Former Minister impermissibly took into account irrelevant considerations. However, Justice Lloyd went on to examine this issue and ultimately accepted that by taking into account the existence of both or either of the MOU and the Deed, the Former Minister took into account irrelevant considerations.


This decision has wide-reaching implications for developments in which matters have been, or are intended to be, negotiated between developer and consent authority and recorded in deeds or agreements which do not conform with the requirements for VPAs, as the Court concluded that:

"the presence of statutory schemes for planning agreements suggests that these [non-VPA] types of arrangements have no place consistently with the statutory scheme."

In practice, this is likely to mean that 'land swaps' or other public benefits offered by developers cannot be taken into account by a decisionmaker unless they are offered in the context of a VPA which is prepared and exhibited in accordance with the requirements of the EP&A Act.


1 Gwandalan Summerland Point Action Group In v Minister for Planning & Ors [2009] NSWLEC 140

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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