By Aaron Gadiel, Partner

The Land and Environment Court has handed down a new judgment that contrasts sharply with a decision handed down only three months prior.

The decision likely means that life will be easier for developers seeking to subdivide land that includes mapped ‘littoral rainforest’ and ‘coastal wetlands’.

When subdivision does not trigger ‘designated development’ requirements

In March 2024, Mills Oakley published an article explaining the implications of the decision of the Land and Environment Court in Investments NQ Pty Ltd v Tweed Shire Council [2024] NSWLEC 1108.

In that matter, the Court considered a development application to subdivide a vacant single lot into two lots.  The development application also proposed to construct a new dwelling on each new lot.

The site had an area of 1,888m².  Part of the land, being 0.051m², was mapped as ‘littoral rainforest’ on the ‘Coastal Wetlands and Littoral Rainforests Area Map’ adopted by the State Environmental Planning Policy (Resilience and Hazards) 2021 (the Resilience and Hazards SEPP).  This mapped area accounted for just 0.003 per cent of the site area.

The proposed subdivision would not have divided this small area of ‘littoral rainforest’ land.  It would have been located entirely within one of the two lots to be created.  No works, including landscaping works, were proposed over this land.

In the matter, all merit issues, including biodiversity issues, had been resolved.

However, the local council argued that development consent could not be granted because any subdivision of a lot that includes land mapped as ‘littoral rainforest’ on the ‘Coastal Wetlands and Littoral Rainforests Area Map’ (under the Resilience and Hazards SEPP) must be ‘designated development’.

The argument was based on section 2.7 of the Resilience and Hazards SEPP.  This provision says that any ‘development’ (other than environmental protection works) that is carried out ‘on’ land identified as ‘coastal wetlands’ or ‘littoral rainforest’ in the ‘Coastal Wetlands and Littoral Rainforests Area Map’ is ‘designated development’.

Subdivision is a form of ‘development’.

The applicant argued that the proposed subdivision was not being carried out ‘on’ the ‘littoral rainforest’ land — as that land itself was not proposed to be divided.

The council argued that when a single lot is to be subdivided, the subdivision is carried out on all of the land that comprises the lot.  It did not matter that the actual new lot boundary would not divide the ‘littoral rainforest’ land.

The Court (constituted by a commissioner) accepted the local council’s argument.  The Court concluded that the proposed subdivision was ‘designated development’.

Development that is ‘designated development’ is required to undergo a more intensive development assessment process.  It is subject to objector appeals/interventions in the Land and Environment Court.

Development applications for designated development must be accompanied by an environmental impact statement and be publicly exhibited for at least 28 days.  If development consent is granted by a consent authority, objectors have the right to commence a merit appeal in the Land and Environment Court.  If a developer appeals a decision (or deemed refusal) of a development application for designated development, the objectors have a right to be heard in the appeal proceedings.

The designated development category is generally reserved for heavy industry and high impact activities (such as coal mines, chemical industrial facilities, quarries, marinas, etc).

If a development application is ‘designated development’, but does not include an environmental impact statement, it will not be able to be given a development consent.

It seems that the Chief Judge of the Land and Environment Court (Preston CJ) has a different view from that expressed by the commissioner in Investments NQ.  Just over a week ago, his Honour handed down a decision known as Goldcoral Pty Ltd (Receiver and Manager Appointed) v Richmond Valley Council [2024] NSWLEC 77.

Without directly addressing the decision in Investments NQ, the Chief Judge considered whether, in materially the same factual circumstances, a subdivision that included (but did not fragment) mapped ‘coastal wetland’ land was ‘designated development’.

The Chief Judge considered that it was not designated development (at [77]-[81]).

In brief terms, in addressing the Resilience and Hazards SEPP, the Chief Judge said:

• The proposed subdivision does not involve the division of that part of the land identified as coastal wetlands into two or more parts that, after the division, would be obviously adapted for separate occupation, use or disposition.
• Although subdivision of land is ‘development’, the mere subdivision of land by the procuring of the registration in the Office of the Registrar-General of a plan of subdivision without undertaking any physical work on the land does not involve the carrying out of development ‘on land’. The procuring of the registration of a plan of subdivision might involve the subdivision of land, which is ‘development’, but that subdivision is not ‘carried out on land’.  To ‘carry out development on land’ involves doing something on the land.  The mere procuring of the registration of a plan of subdivision in the Office of the Registrar-General does not involve the ‘carrying out’ of any development ‘on’ land.

Based on these statements, it appears that some development applications that (since March 2024) have been regarded as ‘designated development’ applications, will no longer be regarded as such.

The decision in Goldcoral signals a welcome lightening of the load for developers seeking to:

• subdivide land that includes mapped ‘coastal wetland’ or ‘littoral rainforest’ under the Resilience and Hazards SEPP;
• retain such lands in a single allotment as part of that subdivision; and
• who do not propose to carry out works in the mapped lands (other than environmental protection works).

Other aspects to the decision

The Goldcoral decision also contained some other helpful findings:

• The local council had proposed a condition of development consent requiring the imposition of an ‘section 88B instrument’ on the title of the title of the land, ‘prohibiting certain development types including childcare facilities, family day care, tourist or visitor accommodation such as short-term holiday rentals and Air BnBs’. The Chief Judge considered that a condition of this kind was tantamount to a private zoning by way restriction on the property title.  Such a condition was held to be inappropriate — as it limited what could be done under  the public zoning (at [185]).
• The local council has proposed a condition regulating the importation of red fire ants — however the condition merely restated the legal requirements that applied in any event. The Chief Judge determined that ‘[n]othing is to be gained by a condition of consent requiring compliance with existing law’ (at [181]).
• The Chief Judge did not see any difficulty in imposing an operational condition (rather than a deferred commencement condition) allowing the condition, structural and serviceability, of a bridge (to be used for access) to be determined after the grant of an operational development consent (at [180]).
• The local council opposed the dedication of land proposed to a public park (as part of the subdivision). The local council said it does not have the financial, human and material resources to manage and maintain the local open space and parks which it currently has and is considering disposing of existing parks.  In these circumstances, the local council submitted that it could not accept and manage an additional local park.  The Chief Judge described this reason as ‘tenuous’ and rejected it (at [176]).   The Chief Judge said (at [177]) that the management of local public parks is a fundamental responsibility of local government.  If the local council is not coping with the management of existing public parks, it needs to improve its performance.  Discriminating against the residents of one neighbourhood — the residents of the proposed residential estate on the land — by not accepting and managing a local park for those residents is not equitable.  Under the proposal the developer would establish all of the facilities and landscape the park before dedicating it to the local council.  The local council only has to maintain the park afterwards.
• It was acceptable for a densely vegetated buffer screen to be used to visually and acoustically screen the residential subdivision from the lands and waters to the south, mitigating unacceptable impacts on a neighbouring land use (at [139]).
• Buffer zones to the littoral rainforest — of around 15 metres or more (with an even greater separation between the residential development and the littoral rainforest) —were regarded as sufficient width to provide adequate protection for the littoral rainforest from edge effects. The Chief Judge said that edge effects can still occur no matter how wide the buffer.  Seeds of weed species can be blown in or deposited by birds and animals in the littoral rainforest regardless of the buffer width.  The littoral rainforest will need to be managed on an ongoing basis as a conservation area, including weed removal and ongoing plantings of rainforest species.  Having a buffer of sufficient width is one management tool to conserve the littoral rainforest, but it should not be viewed as the only conservation management tool.  The ongoing management of the littoral rainforest as a conservation area was required by the conditions of consent (at [124]).
• There is no legal principle that development consent cannot be sought to carry out development to erect a building (which includes a structure) or to carry out works that would amend a building or works that are unlawful, and then to use in the future for new or amended building or works (at [53]).

All up this was an important decision, both in terms of its departure from the approach taken in Investments NQ — and for its rulings on a key selection of other issues that frequently bedevil subdivision applications.