By Aaron Gadiel, Partner

New land use planning laws came into effect in NSW on 1 March 2018 — introducing new complications for development proponents.

Some provisions have immediate effect.  Other provisions will not come into full effect for some time.

New look

The name of the state’s planning law has not changed.  It is still called the Environmental Planning and Assessment Act 1979 (the EP&A Act).  However, all of its provisions have been re-numbered.  For example, most modification applications will now be made under section 4.55 (formerly ‘section 96’).  Local infrastructure contributions will now be made under section 7.11 or section 7.12 (replacing ‘section 94 and ‘section 94A’).  Many provisions have been amended and/or moved to different parts of the Act.

There will be a period of confusion as regular users of the EP&A Act will have to become familiar with the new text.

Regretfully, the changes mean that about 20 years of Land and Environment case law now cites an obsolete numbering system (of the pre-1 March 2018 EP&A Act).  Over time, this will make it more difficult for non-experts to understand past Court decisions.

Achievement of legislative reforms on the scale sought in the 2013 reform effort

In general terms, the government has now more-or-less achieved the scale of legislative change it sought in its failed Planning Bill 2013.  The Planning Bill was a proposed wholesale replacement of the EP&A Act.  It was abandoned by the government after hostile amendments were made in parliament.  (Disclosure:  the author of this article was a legal advisor to the government in relation to the Planning Bill 2013.)

The latest changes are a consequence of the Environmental Planning and Assessment Amendment Act 2017.  They follow revisions brought about by:

• the Environmental Planning and Assessment and Electoral Legislation Amendment (Planning Panels and Enforcement) Act 2017;
• the Greater Sydney Commission Act 2015; and
• the Environmental Planning and Assessment Amendment Act 2014.

Taken together, these legislative changes effectively enact the kind of legislative change originally sought by former Planning Minister Brad Hazzard in 2013.

District and regional planning panels — reduction in responsibility

The old (established in 2009) system of joint regional planning panels has been re-styled as Sydney district and regional panels.  The name ‘joint’ regional planning panels has been dropped, but the composition of the panels is basically the same.

However, the general capital investment threshold that triggers the panels’ role as decision-maker (for a development application) has been increased from $20 million to $30 million.  This will only apply to development applications lodged from 1 March 2018.  (As before, some limited categories of development can be brought before the panel even when the capital investment value is below the general threshold.)

The overall effect of these changes will be to reduce the number of development proposals that will be decided by the Sydney district and regional panels.

Some development proponents may find this disappointing.  State nominees on these panels enjoy a measure of independence from local councils.  Those state members can only be removed from office by the Minister for Planning.  All members of the new local planning panels (commonly called ‘independent hearing and assessment panels’ or ‘IHAPs’) can be sacked by the councillors of the relevant local council.

District and regional planning panels — no longer bound by contributions plans

Sydney district and regional planning panels are now consent authorities in their own right.  (Formerly, they were only making decisions on behalf of the council who remained the consent authority in a formal sense).

One of the consequences of this change is that ‘section 94’ contributions plans will no longer be binding on these panels.  That is, a Sydney district or regional planning panel may now impose a condition of consent requiring either or both:

• the payment of a monetary contribution; or
• the dedication of land free-of-cost,

even when the contribution has not been authorised by a contributions plan.

A Sydney district or regional planning panel must still have regard to a contributions plan (if there is one).  However it will be able to (if can justify it) impose contributions that exceed those in the plan.  There is a right to appeal such decisions to the Land and Environment Court.

Local planning panels are still only making decisions on behalf of local councils. They are not a consent authority in their own right.  This means that they are still bound by contributions plans.

District and regional planning panels — more transparent

The rules on decision-making process for Sydney district and regional panels have been brought into line with the more transparent rules that apply to the new local planning panels.

Until now, the panels have generally adopted a practice by which meetings have a public component and a private component.  The actual discussion between panel members as to their position often takes place away from the public gaze.

The new law explicitly bans this practice.  It requires each panel to conduct all meetings in public — this includes telephone meetings.  There is no exclusion for any ‘confidential’ matters.

The panel must also record its meetings (including telephone meetings).  Those recordings must be made publicly available on its website.

As a consequence, differences of opinion between panel members are likely to be more evident than under the old system.

If the panel is to hold any ‘briefing’ meeting in advance of its ‘deliberative’ meeting (whether with council officers or developers) that meeting will need to be public and be recorded.

Written reasons for decisions

Local planning panels, Sydney district panels and regional panels must provide written reasons for their decisions.  However, this requirement is not mandatory — in the sense that a decision is not invalid merely because of a failure to give reasons (or all of the reasons) for a decision.

No such luxury is extended to other decision-makers.  Local councillors (outside of Sydney and Wollongong) and council officers making development application decisions will face a new mandatory requirement to give reasons for their decisions.  This requirement will only apply to decisions made from 1 July 2018.

This latter change will assist objectors who may wish to mount a legal challenge against decisions.

Community participation plans

Local councils are now allowed to adopt community participation plans.  These plans can set out new additional mandatory requirements for community participation in development decisions.

These plans may impose mandatory preconditions that proponents must satisfy (in terms of community consultation) before an application for a planning approval (for major development) is made.

While the government has foreshadowed that it may make regulations as to the form, content and procedures for the adoption of community participation plans, no such regulations have been made.  This means that local councils have a wide degree of latitude to decide for themselves what obligations to place on proponents in their community participation plans.

Community participation plans can be prepared and adopted by local councils now.  Each local council is — at the latest — obliged to adopt such a plan by 1 July 2019.

Local strategic planning statements

Until 1 March 2018, there were five layers of statutory land use planning documents in Sydney.  These were:

• state environmental planning policies;
• regional strategic plans;
• district plans;
• local environmental plans; and
• development controls plans.

Outside of Sydney there were four layers of statutory land use planning documents (the same list as above, but without the district plans).

Now the state’s planning laws include an additional layer.  This new type of document is a ‘local strategic planning statement’.  This document will be prepared and adopted by each local council.  It must set out planning priorities and actions within each local council area.

When a council is divided into wards — and the statement separately deals with each ward  — the local councillors for that ward will be able to veto any statement that they do not like.  There is a provision for a state agency to step-in override the veto of the ward councillors, but this can only be done at the request of the local council itself.

The local strategic planning statement will not be the legal document that sets out the formal zoning of land and what is permitted and prohibited in each area.  This role still rests with local environmental plans.

However, the new planning laws require any planning proposal (for a change in planning controls) to address whether the proposal will give effect to the local strategic planning statement. This is a relatively soft obligation.  A planning proposal can still proceed even if it is inconsistent with the local strategic planning statement — as long as that inconsistency is justified.  This contrasts with the requirement that every planning proposal, to proceed, must give effect to a district plan (or if there is no district plan — the regional strategic plan).

Local councils are entitled to prepare and adopt local strategic planning statements now if they wish.  However, Sydney councils are not obliged to finalise their statements before 1 July 2019.  Local councils outside of Sydney have until 1 July 2020.

It is likely that some local councils will now tell development proponents that work for a local strategic planning statement will delay site (or precinct-specific) changes to planning controls.

Local planning panels

All local councils within Sydney and Wollongong must now have local planning panels (these are still commonly referred to as ‘independent hearing and assessment panels’ or IHAPs).

We explained the role of these new panels in our August 2017 article in detail here.

The Minister for Planning has now issued a direction to the new panels that sets out the types of development applications that must be referred to local planning panels (rather than being decided by local council officers).  It is available here.

In very general terms, a development that is subject to vigorous objection (more than 10 unique objector submissions, 25 in the City of Sydney) must be sent to the local planning panels for decision.  Development applications for residential flat buildings of more than four storeys (three storeys in some council areas) must also be sent to the local planning panels for determination, even if no objections are made.  In both instances it does not matter how much the development is worth.  There are also some other matters that may trigger mandatory referral to the local planning panel.

Applications to modify development consents may be decided by either local council officers or the local planning panel — this up to each council to work out itself.

A separate ministerial direction has been issued for planning proposals (to change planning controls).  It is available here.  The direction requires the great majority of planning proposals to be referred (by local councils) to the local planning panel for advice prior to a submission for gateway determination.

The Department of Planning and Environment will have the benefit of both the views of:

• the elected local council; and
• the local planning panel,

when deciding whether to issue a gateway determination (allowing the planning proposal to proceed).  Presumably this is to help safeguard against situations where elected councillors wish to proceed with a rezoning that is not supported by the council’s technical advisors (such as council officers or panel members).

Modification of development consents

A new requirement has been imposed on consent authorities who are deciding whether to approve a modification of a development consent.  This requirement requires the consent authority to take into consideration the reasons that were given for the original grant of the development consent.

This does not mean that a consent authority must refuse a modification application merely because the applicant wants to change something addressed in the original reasons.  However, it does mean that an applicant will need to justify the different approach (if the different approach is inconsistent with the thrust of the original reasons).

Complying development certificates

Complying development certificates may now be issued with a ‘deferred commencement’ condition.  This means that the certificate will not operate until the applicant or the council is satisfied as to a particular matter.

Unlike a development consent, there is no legal right to a merit appeal if the certifier or the council is never satisfied as to the matter.  Accordingly, it is unclear what practical value a ‘deferred commencement’ complying development certificate would actually have.

It is now also easier for third party objectors and councils to have any complying development certificates declared invalid in the Land and Environment Court.  If proceedings are commenced within three months of the issue of a certificate, the Court will be able to determine for itself whether or not a complying development certificate should have been issued.  The opinion that the certifier formed when issuing the certificate will no longer carry any weight.  This change means that complying development certificates  now carry greater legal risks for development proponents. 

Integrated development — new powers for the Department of Planning and Environment

The legislation includes provisions allowing the Secretary of the Department of Planning and Environment to issue approvals on behalf of state agencies that are part of the ‘integrated development’ regime.  The Secretary can do this when state agencies either fail to respond in an appropriate time or two or more agencies provide inconsistent approvals.

However, this provision cannot operate without regulations and no such regulations have been made.

Additionally, even when those regulations are made, it will not cover concurrences that are not part of the ‘integrated development’ regime.  For example, the Secretary will not be able to use the new powers in relation to concurrences by rail authorities for development adjacent to rail corridors under the State Environmental Planning Policy (Infrastructure) 2007.

Occupation certificates, construction certificates, etc

Part 6 of the amended EP&A Act deals with:

• occupation certificates;
• construction certificates,;
• the new ‘subdivision works’ certificates; and
• ‘building information certificates (which are the new name for building certificates).

Some of these provisions are materially different from the existing regime.  However, they will not come into effect until 1 September 2018.  At this stage, the precise detail of the new regime is unknown.  The necessary regulations have not yet been published.  This will presumably happen closer to 1 September.

However, there is one particular forthcoming change that should be influencing developer behaviour now.

A new provision will allow the Land and Environment Court to declare construction certificates and subdivision works certificates to be invalid if the plans and specifications approved by the certificate are ‘not consistent’ with the development consent.

This is a toughening of the current regime that allows the plans and specifications approved by construction certificates to be ‘not inconsistent’ with a development consent.

While the change in wording may appear minor, there is a significant legal difference between the existing regime and regime to apply from September.

In simple terms, the existing regime allows for some inconsistencies between the plans and specifications approved by a construction certificate and a development consent.  In certain circumstances those inconsistencies can be more than trivial.

The new regime will not be so flexible.  It is likely that only trivial inconsistencies between the plans and specifications approved by a construction certificate and a development consent will be allowed.

Developers who are seeking development consents now (where the construction certificate is likely to be issued after 1 September) should be managing this situation by ensuring that (if possible) the plans and specifications submitted to obtain a development consent will not need to be modified by any plans and specifications submitted for a construction certificate.

However, often this will not be possible.  If this is the case, the submitted material should clearly disclose this fact.  For example, development application drawings might contain a note that declares that ‘minor changes to building form and configuration may be required when drawings are subsequently prepared for construction purposes after the grant of development consent’.

However, it will not be enough to merely make notations on drawings (and other specifications).  A development proponent will need to carefully review the conditions of any development consent actually granted to see what strict obligations it imposes. Generally development consents are framed so that the conditions override the approved drawings.

For example, if a development consent condition overrides any note on a drawing (and there are inconsistencies between the drawings and the ‘for construction’ drawings) it may be necessary to make a modification application to either:

• remove the problematic condition; or
• secure express approval in the development consent for the ‘for construction’ drawings prior to the issue of a construction certificate.

Planning Minister recaptures lost zoning powers

The NSW Planning Minister (Anthony Roberts) has now recaptured planning powers lost to the Greater Sydney Commission just two years ago.

At the beginning of 2016, the NSW Government legislated to strip the Planning Minister of the power to make key decisions in the routine process for amending local environmental plans in the Sydney metropolitan area.

The Minister’s powers to issue gateway determinations, decide who can submit planning proposals (to change plans), etc were handed-over to the new Greater Sydney Commission.

From 1 March the Minister’s Sydney rezoning powers have been largely re-instated (while also maintaining the Greater Sydney Commission’s powers).

This means that the Department of Planning and Environment now has the capacity to make decisions on rezoning on behalf of either the Greater Sydney Commission or the Planning Minister.

A tougher ‘complete works order’

Until 1 March, local councils had the power to order a landowner to complete an approved development that has been physically commenced.  However, an order of this type was rarely given.  This is because any such an order could not be issued until at least five years had passed since the development consent became operational.  Additionally, any order still had to allow at least 12 months for the completion of the development.

From 1 March the five-year and 12-month safeguard have both been removed.  As a result, if:

• a development has been commenced, but not completed; and
• the date on which the consent would have lapsed (if there had not been any physical commencement) has passed;

the council will be able to compel an owner to complete the development within a specified time.  The time for completion may be less than 12 months.

There will be serious criminal penalties for non-compliance with such an order.

Such an order may be appealed to the Land and Environment Court (within 28 days of its issue).  However, the intent of change is plainly to reduce a private developer’s commercial discretion as to how quickly it implements a development consent.

Under the proposed legal changes, the Court will not accept (in any appeal) an argument that it is a landowner’s prerogative to determine the pace in which a development consent is implemented. The developer will have to show the Court that its development timetable is reasonable in the circumstances.

Modifying Part 3A project approvals and concept plan approvals

The transitional arrangements for old Part 3A approvals have been amended.

Essentially, modifications of project approvals under ‘section 75W’ are to be phased out.  Modifications of concept plan approvals can continue, albeit in a more limited form.

From 1 March 2018 no new project approval modification requests can be lodged under section 75W .

Significantly, a request to modify a project approval that was lodged before 1 March 2018 cannot continue to be dealt with under section 75W if:

• the request has not been determined by 1 September 2018;
• the Department of Planning and Environment is of the opinion that insufficient information has been provided to deal with the request; and
• the Department notifies the person who made the request that it will not be dealt with under section 75W.

This means that there is an ability for the Department to kill-off a request on the grounds of ‘insufficient information’ from 1 September 2018.

Clause 4.6 requests

In a separate change, on 21 February 2018, the Department of Planning and Environment issued a new planning circular titled ‘Variations to development standards’ (PS 18-003).  A copy is available here.

The circular revoked the circular that the Department issued on 15 December 2017 also titled ‘Variations to development standards’ (PS 17-006).

Mills Oakley identified a number of problems/consequences with the (now) revoked circular in an article we published in January 2018 (here).  This article explains what clause 4.6 actually does and what a ‘clause 4.6’ request is.

Pleasingly, the Department has generally addressed the concerns/problems that we raised.  As a result, the situation on clause 4.6 requests has largely returned to the pre-15 December 2017 status-quo.  In the overwhelming majority of situations where a clause 4.6 request will be made the concurrence of the Secretary is now (once again) to be assumed.

One key difference is that a local council officer will not be able to approve a development application that relies on a ‘clause 4.6’ variation of more than 10 per cent without the concurrence of the Secretary of the Department of Planning and Environment.  This will not be a major issue in most circumstances.  Within Sydney and Wollongong, the development applications most likely to be affected will now need to be determined by local planning panels in any event.

Need to know more?

This article is only a light examination of the latest changes to the planning law.  There are likely to be many implementation issues.  Please do not hesitate to contact us if you would like to know more.