Reminder on the limits to imposing conditions when modifying development consents

A council's power to impose conditions when approving a modification application has long been held to be an implied power.

The recent decision of Peake Pearce Pty Ltd v Georges River Council [2023] NSWLEC 89 (Peake Pearce) is a reminder that this implied power is more limited than the statutory power to impose conditions when granting development consent to a development application.

Grant of consent and modification of consent: Two different powers

Sections 4.16(3) and 4.17 of the Environmental Planning and Assessment Act 1979 (EPA Act) set out the conditions that can be imposed on a development consent. Importantly, the modification of a development consent under section 4.55 or 4.56 of the EPA Act is not (and should not be thought of as) the granting of development consent. Rather, it is a post-consent approval that modifies a consent already granted.

What happened in Peake Pearce?

In Peake Pearce, Duggan J considered whether a council had power to impose a "deferred commencement condition" when approving a modification to a development consent.

Deferred commencement conditions are permitted under section 4.16(3) of the EPA Act in the context of the grant of development consent:

The applicant submitted, and the court accepted, that the power under the EPA Act to impose a deferred commencement condition could not relate to a modification of a development consent.

The key submissions were as follows:

1. the use of the term "development consent" in section 4.16(3) is intentional, i.e. the power to impose a deferred commencement condition can only be exercised in determining a development application, and not a modification application
2. section 4.16 concerns the power to determine a development application, not a modification application. This can be distinguished from the broader power to impose conditions under section 4.17
3. as a practical matter, an already operative consent cannot be modified by the imposition of a deferred commencement condition so that the consent becomes inoperative (until the condition is satisfied). This would make a lawful work, on its face, unlawful.

Key findings

The court held that:

1. the council acted beyond power in attempting to impose a deferred commencement condition upon approving the modification
2. the ability to impose conditions is fundamental to exercising the council's approval functions under the EPA Act. Because of the nature of the deferred commencement condition, the condition was not 'severable' as the court could not be satisfied that the council could have approved the modification application or that the terms of the modification would have been the same if the deferred commencement condition had not been imposed
3. accordingly, the jurisdictional error invalidated the council's decision to approve the modification.

The court declared that the modification was invalid and of no effect.

What this case reminds us (and a Peake into the possible future)

The case is a timely reminder that modification applications have a different statutory and decision-making context to development applications which can prove critical in certain situations.

Although the court did not comment on whether other types of conditions which the EPA Act allows to be imposed on development consents are more limited when imposed on modifications, Peake Pearce at least raises that question.

For example, there may be limitations on the power to impose conditions upon the approval of a modification application:

1. requiring an ancillary aspect of the development to be carried out to the satisfaction of the council
2. securing funding towards the carrying out of works or programs
3. allowing council to review and change conditions on extended opening hours and maximum numbers of people in a building.

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