By Aaron Gadiel, Partner, and Anthony Whealy, Partner

The NSW Department of Planning and Environment has released draft regulations that will make it easier for local councils to ‘reject’ development applications before they are assessed on their merits.

The changes are set out in a draft Environmental Planning and Assessment Amendment (ePlanning) Regulation 2017.  It has been released for public comment.

The Department says that the regulation changes will ‘support online lodgement of development applications by introducing consistent documents and technical requirements across NSW’.

However, for reasons explained below, developers of complex projects are unlikely to want to use the new online lodgement process (as currently proposed).

The regulation does much more than merely pave the way for online lodgement of applications.  It dramatically increases the amount of mandatory information that must be supplied up-front with a development application — even for applications that are merely lodged ‘over-the-counter’ in the traditional way.

This in turn will give public officials working for consent authorities (such as local councils and the Department) much stronger powers to reject applications within the first 14 days on procedural grounds, without any merit assessment.

Status-quo

At present, there is a reasonably concise list of mandatory requirements for development applications (and documents that must accompany such applications).  These are set out in Part 1 of Schedule 1 of the Environmental Planning and Assessment Regulation 2000.

A consent authority can ‘reject’ a development application — without a merit assessment — if it does not contain information, or is not accompanied by a document, required under those provisions.

However, this ‘rejection’ must take place within 14 days after a consent authority receives an application.

Furthermore, the Land and Environment Court, in a 2003 decision known as Parkes v Byron Shire Council, has said that a decision by a council to ‘reject’ a development application without a merit assessment is able to be appealed to the Court.  (Although, in a separate proposal, the NSW Government’s draft Environmental Planning and Assessment Amendment Bill 2017 will abolish that appeal right.)

At present, applicants for large projects often have to battle with local councils in an effort just to get them to accept that a development application has been lodged.  Sometimes this is because a local council officer has misinterpreted the law — the officer may assume that more documents are legally mandatory than is actually the case.

Nonetheless, in our experience, these issues can often be readily cleared up once the local council is informed about its legal obligations.

New standard forms and information requirements

The proposed regulation would introduce a series of state-wide standard development application forms for different development types.  These will replace the forms that are currently made available by each individual consent authority.

These are set out in 181 pages of new proposed ‘Secretary’s requirements’.  The requirements contain various information requirements.  These would replace the reasonably concise provisions in the existing regulation.

As a result of the proposed ‘Secretary’s requirements’, there will now be many more grounds for a local council to ‘reject’ a development application within 14 days of lodgement.

(The 14-day limit will only apply to applications lodged directly with a consent authority.  If the application has been lodged on the planning portal website, the application may ‘hang’ indefinitely while an applicant waits for a notification that the required information has been supplied.)

The full implications of the new requirements are too great to explain here.

However, the changes to the requirements for statements of environmental effects are particularly significant.  These are explained below.

New requirements for statements of environmental effects

The law already requires that every development application be accompanied by a statement of environmental effects (SEE) or an environmental impact statement.  Most forms of urban development only require an SEE.

The Department’s discussion paper (explaining its proposed regulation) wrongly claims that there are presently no requirements as to what an SEE must contain.  In fact, the existing regulation does set out requirements.  As things stand, subject to any applicable departmental guidelines, each SEE must simply address three simple points:

• the environmental impacts of the development;

• how the environmental impacts of the development have been identified; and

• the steps to be taken to protect the environment or to lessen the expected harm to the environment.

Of course, many SEEs say much more than this.  However, an application can only be rejected outright by a consent authority (prior to a merit assessment) if the SEE is so poor it does not even address the above simple list.

The proposed ‘Secretary’s requirements’ sets out four pages of much more detailed information that must be provided in an SEE (there is also a separate detailed list of reports and drawings that must be provided with each development application).  In brief terms, the information requirements are organised under the following headings:

• details of the development;

• compliance with Council requirements;

• privacy, views, overshadowing and noise;

• tree and vegetation;

• access and traffic;

• stormwater and sewerage;

• contamination;

• demolition and asbestos (if applicable);

• cut and fill (if applicable);

• operational and management details (not applicable to residential);

• change of use, additional use and existing use rights (if applicable);

• construction management plan;

• ongoing waste management; and

• schedule of materials.

Many SEEs will already include this information.  However, some do not (particularly for applications that are likely to be regarded as low-risk or not contentious).  Some of the above information (such as a construction management plan) is often not provided up-front, but is prepared later-on — before a construction certificate is issued.

New level of prescription for the operation of all businesses

The requirement for non-residential ‘operational and management details’ provides an example of how the new prescriptive requirements for SEEs may change things

Under the proposals SEEs for non-residential development would be required to include the following:

• the total number of staff;

• the maximum number of staff on duty an any one time;

• the maximum number of clients/customers in a day;

• the maximum number of clients/customers expected at any one time;

• the machinery associated with the business activity; and

• the raw materials, finished products and waste materials.

At present, many SEEs will not include this information.  If they do cover some of these issues it will usually be with some level of generality (although where staff numbers impact on parking requirements specific numbers will often be nominated).

When a consent authority decides to enforce the new requirements, the consent authority will be able to reject the application without a merit assessment if these specific details are not supplied.

Once this specific information is provided in an SEE, it is likely that consent authorities will impose development consent conditions requiring adherence to it.  (Development consent conditions requiring compliance with SEEs are already routinely imposed.)

That is, the changes are likely to bring about a greater degree of regulation of day-to-day business activity — beyond the level that is necessary to merely avoid an adverse impact.

No increase in certainty

The Department’s discussion paper says that the changes ‘will provide certainty for … developers on what documentation …[is] required up front’.

Under the law as it stands, there is already considerable certainty about the documents and information that must accompany a development application.  This currently means that local councils and the Department (when it is the consent authority) only have a limited basis to ‘reject’ development applications without carrying out a merit assessment.

However, the proposed changes remove the current (relatively modest) list of documents and information that is required upfront to lodged a development application — and replace it with a more detailed list.

Rather than promoting certainty, in our view, the law will promote uncertainty, because there will now be far more grounds for a consent authority to reject a development application.

If past experience is a guide, these new powers will be applied selectively, making the process of lodging development applications even more haphazard than it is now.

The Department’s belief that the new system will be clearer seems to be based on its observations of the current unlawful practice that many local councils adopt (in rejecting an application because non-mandatory documents are not supplied at lodgement).

Nothing in the proposed regulation deals with such unlawful conduct by consent authorities.  Past experience suggests that such unlawful conduct is likely to continue in the future, even with these regulation changes.

The proposed regulation change does not propose any new limit to the information that may be requested by a consent authority after a development application has been lodged.

Reasons to avoid using the planning portal

At the heart of the Department’s justification for the reforms is the new ability to lodge development applications on the Department’s ‘planning portal’ website. This will include matters for which a local council is the consent authority.

However, based on the draft regulation, developers will probably want to avoid using the planning portal to lodge complex or contentious development applications.

At present a development application is lodged when the application documents and the application fee are delivered to the consent authority.  If the application is not rejected by the council within 14 days, it is regarded as being lodged from the date that the documents were delivered.  (There is also an appeal right when the power to ‘reject’ is exercised.)

Under the proposed regulations, a different regime will apply to applications lodged on the ‘planning portal’ website.  The material will be reviewed by the local council.  Before ‘lodgement’ can formally be regarded as taking place an email must be issued by the consent authority agreeing that the application has been successfully lodged.

This means that applicants who have submitted application documents to the planning portal may be left hanging for an indefinite time (waiting for formal notification that their application has been lodged).  During this period, they will have no merit appeal rights in the Land and Environment Court.

Rights to a deemed refusal appeal (for an application lodged on the ‘planning portal’) would only be measured from when an email is sent notifying the applicant that the application has been formally ‘lodged’.  This may be weeks after the application documents were originally uploaded.

In short — given the current difficulty developers often experience in getting a local council to accept a development application — developers may prefer to stick with the present over-the-counter lodgement process.

Land owner consent

Under the new system, there will no longer be a need to provide the written consent of a landowner to lodge a development application.  Where a development application (or modification application) is lodged by someone other than the landowner, the applicant will merely need to make a legal declaration that landowners consent has been obtained.

This change will place landowners who have leased their land — or licenced the use of their land to others — in a more vulnerable position.

With these changes, it will be possible for tenants or licensees to make development applications without the express written consent of the landowner.  They may claim that they had an implied or oral consent.

Landowners will be notified of development applications that have been lodged.  However, it seems that this notice will be sent to the address or email address for the landowner nominated by the applicant on the application form.  Landowners who do not monitor their email address closely, for example, may not be aware that an application has been lodged. (There is also no proposal to require landowners to be notified when applications are made to modify development consents.)

This may cause problems for landowners, as development consents ‘run with the land’.  This means that once a tenant or licensee vacates the land, the landowner may find itself bound by an unexpected development consent.

Refund of application fees

At present, if a consent authority rejects a development application without a merit assessment (because mandatory documents and information is not supplied), it must refund the development application fees in full.

The regulation change means that consent authorities will no longer need to refund any of the fee (which, for larger developments, can be tens of thousands of dollars).  This may create a perverse incentive for some consent authorities to make full use of their (expanded) powers to reject development applications within the first 14 days.

Submissions

Submissions to the Department on the proposed regulation changes closed 15 March 2017.