Developers beware: 'amber light' approach rejected for NSW planning appeals

The NSW Land and Environment Court decision in Saffioti v Kiama Municipal Council will be of interest to applicants seeking development consent, including for changes to existing use rights.

In Saffioti v Kiama Municipal Council [2018] NSWLEC 1426 the NSW Land and Environment Court (Court) considered an appeal against a Commissioner’s decision regarding an application by Ms Saffioti (Applicant) to erect a new dwelling on her land and use the existing dwelling on that land as an art studio, in reliance on existing use rights.

The decision is interesting because the Court held that Commissioners hearing Class 1 planning appeals are not required to give an 'amber light' to applicants seeking development consent, by alerting them to issues with their applications and giving them an opportunity to modify applications to make them acceptable. The Court found that this approach has no statutory basis.

The Court also clarified the requirement to comply with certain environmental planning instruments, and the relationship between those instruments and existing use ‘incorporated provisions’ in the Environmental Planning and Assessment Regulation 2000 (NSW).

Background

The Applicant’s land was zoned E2 Environmental Conservation under the Kiama Local Environmental Plan 2011 (LEP). The zoning prohibited the erection and use of a building for dwelling purposes. However, Kiama Municipal Council (Council) and the Applicant had agreed that the use of the existing dwelling was an existing use under section 4.65 of the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act). 

The Applicant lodged a development application (DA) with Council, seeking consent to erect and use the new dwelling relying on the existing use rights. The Council did not determine the DA, and the Applicant appealed the Council’s deemed refusal to the Court.

The Commissioner hearing the appeal refused the DA and dismissed the appeal on the basis that the proposed development:

• was not designed, sited and managed to avoid, minimise or mitigate any adverse environmental impacts on terrestrial biodiversity as required under clause 6.4(4) of the LEP; and
  
  
• did not comply with five controls in the Kiama Development Control Plan 2012 (DCP) regarding impacts on the natural environment and habitat, and that reasonable alternative solutions were not available that would achieve the objects of the controls for the purpose of section 4.15(3A)(b) of the EPA Act. 

The Applicant appealed against the Commissioner’s findings to a Judge of the Court on questions of law. The appeal was heard by the Chief Judge of the Court and failed on all grounds, two of which are discussed below.

Alleged denials of procedural fairness

The Applicant alleged that the Commissioner had denied her procedural fairness by:

• failing to provide an 'amber light' regarding the Commissioner’s concerns regarding the proposed development; and
  
  
• not allowing her to modify the proposed development or provide further information in order to make it acceptable.

The 'amber light' approach has previously been adopted by some Commissioners in the Court when hearing and disposing of planning appeals. 

In particular, the Applicant argued that the Commissioner had failed to provide her with the opportunity to:

• address any concerns the Commissioner had regarding the proposed development's compliance with clause 6.4(4) of the LEP and with applicable standards under the DCP; and
  
  
• provide 'reasonable alternative solutions' to achieve the objects of any DCP standards which had not been complied with, in accordance with section 4.15(3A)(b) of the EPA Act.

The Chief Judge rejected these arguments, finding that:

• the 'amber light' approach has no statutory basis in the EPA Act, the Land and Environment Court Act 1979 (NSW) or the Court’s rules. The fact that some Commissioners may have previously applied the approach does not give it any statutory or formal basis and does not give rise to a legitimate expectation that other Commissioners will adopt the approach. This is consistent with the recent findings of the NSW Court of Appeal in Ku-ring-gai Council v Bunnings Properties Pty Ltd [2019] NSWCA 28;
  
  
• the Commissioner was not obliged to provide notice to the Applicant that the evidence which she had adduced at the hearing was uncertain and inconsistent, and was insufficient to establish the matters which were the subject of clause 6.4(4) of the LEP and the applicable controls in the DCP; and
  
  
• section 4.15(3A)(b) of the EPA Act did not oblige the Commissioner to give the Applicant an opportunity to provide reasonable alternative solutions that achieved the objects of the DCP standards that the Commissioner found had not been met.

This is because applicants for development consent have the onus of proposing, in their development applications, the alternative solutions that achieve the objects of the applicable DCP standard. The consent authority can then evaluate whether the proposed alternative solutions are reasonable and achieve the objects of those standards for the purpose of section 4.15(3A)(b).

In this case, the Commissioner had considered the only alternative solution provided by the Applicant (being the proposed development) consistent with the requirements of section 4.15(3A)(b), and found it did not achieve the objects of the standards in the DCP.

Alleged misconstruction of ‘derogation’ in section 4.67(3) of the EPA Act

Under section 4.66(1) of the EPA Act, nothing in the EPA Act or an environmental planning instrument (EPI) prevents the continuance of an existing use.

However, section 4.67 recognises that:

• the EPA Regulation may make provision for existing uses, being 'incorporated provisions' taken to be incorporated in every EPI, including LEPs (section 47(1)); and
  
  
• an EPI may contain provisions extending, expanding or supplementing the 'incorporated provisions', but if any such provisions derogate from the incorporated provisions they will have no force or effect while the incorporated provisions remain in force (section 47(3)).

The incorporated provisions are found in Part 5 of the EPA Regulation. In particular:

• clause 41 of the EPA Regulation allows existing uses to be enlarged, expanded or intensified etc subject to the other provisions of Part 5; and
  
  
• clause 42(1) provides that development consent is required for any enlargement, expansion or intensification of an existing use. 

Clause 6.4(4) of the LEP provides that development consent must not be granted to development unless the consent authority is satisfied of the matters in clause 6.4(4)(a) – (c). These relate to the maintenance of biodiversity, appropriate design, siting and the management of adverse environmental impacts on biodiversity.

The Commissioner found that clause 6.4(4) of the LEP did not derogate from the incorporated provisions. 

The Applicant submitted that clause 6.4(4) did in fact do so, as it detracted from the rights otherwise enjoyed and protected by an existing use right – including the entitlement to enlarge, expand or intensify that use in accordance with clause 42 of the EPA Regulation.

The Court rejected this. It held that the correct test is whether clause 6.4(4) of the LEP derogates from the entitlement to make, and have the consent authority consider and determine, a development application seeking consent to enlarge, expand or intensify an existing use. 

The Court found that clause 6.4(4) establishes factual preconditions about which the consent authority must be satisfied in order to enliven the power to grant consent. However, this did not derogate from the Applicant’s entitlement to make a development application seeking development consent for the purpose of clause 42 of the EPA Regulation.

The Court noted that this finding was consistent with other decisions of the Court, which have found that provisions of a local environmental plan that fixed development standards do not derogate from the incorporated provisions.

Key takeaways

• Commissioners of the Court hearing Class 1 planning appeals are not required to alert applicants seeking development consent to issues with their development applications, and to give them an opportunity to modify their applications to make them acceptable.
  
  
• Provisions of an environmental planning instrument (eg. a local environmental plan) may establish factual pre-conditions that a consent authority must be satisfied exist in order to grant development consent or fix developmental standards. An applicant seeking development consent to enlarge, expand or intensify an existing use must comply with any such provisions. 

Such provisions will not derogate from the existing use ‘incorporated provisions’ in the Environmental Planning and Assessment Regulation 2000 (NSW). They will only do so (and have no effect for the purpose of section 4.67(3) of the EPA Act) if they derogate from the entitlement to make the relevant development application.