Posted on June 15, 2017 by Megan Hawley 1

More on CDCs and Development Consents

The Land & Environment Court has handed down a decision which suggests that a complying development certificate (CDC) cannot authorise development which would breach a condition of a development consent.

If the decision is to be read in that way, which is not clear, this creates new law, and greatly limits the utility of a CDC.

Under State Environmental Planning Policy (Exempt and Complying Development Codes) 2008 (Codes SEPP)  in order to be complying development, the development must fall within a description of a type of development which can be complying development, and must also meet the development standards specified for that development.

The Commercial and Industrial Alterations Code in Part 5 of the Codes SEPP provides (in clause 5.3) that a change of use in premises from a commercial use specified in the clause to a new commercial use specified in the clause is complying development.

Clause 5.4(1)(g) of the Codes SEPP provides that one of the standards specified for complying development under clause 5.3 is that:

‘the new use must not cause the contravention of any existing condition of the most recent development consent (other than a complying development certificate) that applies to the premises relating to hours of operation, noise, car parking, loading, vehicular movement, traffic generation, waste management or landscaping’.

There is therefore no doubt that to that extent, the provisions of any relevant development consent must be considered to determine if the change in use is properly considered to be complying development – under that clause.

In North Sydney Council v Harris Farm Markets Pty Limited [2017] NSWLEC 67 which was handed down last Friday and which can be found here, the Court considered a number of arguments regarding the validity of two CDCs which related to internal alterations to two commercial tenancies in a shopping centre (to remove the wall separating them) and a change of use of the two premises from a fruit and vegetable market and a fresh produce outlet, to a supermarket spanning both tenancies.

The change of use was said to be authorised by clause 5.3 of the Codes SEPP. But the Court accepted 5 and possibly 6 of the 6 arguments the Council raised in respect of the invalidity of the CDCs.

Four (4) of the arguments were regarding compliance of the development with standards in respect of plant rooms, dry storage rooms, a loading dock and car parking requirements under the relevant DCP.

The other 2 arguments were:

• clause 5.3 of the Codes SEPP does not authorise amalgamation of two commercial premises, only a change of use of an existing premises; and
• clause 5.4(1)(g) was not complied with as there was a condition of a development consent for the shopping centre prohibiting the amalgamation of the two tenancies. That condition was said to be breached as the new amalgamated use of the tenancies would increase the required car parking. The condition was drafted to prevent these impacts, and was therefore contravened.

It is clear that the Court accepted these two arguments and the first is not contentious.

However, the second is problematic, and the Court”s reasoning is not clear. The Court clearly states that clause 5.4(1)(g) was breached as a result of a breach of the development consent condition prohibiting amalgamation of the tenancies.

However,  that condition was not explicitly in respect of any of the matters referred to in clause 5.4(1)(g). It was not explicitly in respect of car parking, although expert evidence on behalf of Council was to the effect that the condition ‘related to’ carparking as it would address car parking impacts of an amalgamated site.

It may be that the decision only stands for the proposition that the condition was in relation to car parking, it was a condition to which 5.4(1)(g) referred, and therefore a development in breach of that condition could not be complying development.

However, the Council argued more widely that there was nothing in the Environmental Planning & Assessment Act 1979 or the Codes SEPP to suggest that a CDC is intended to be able to be used to evade negative stipulations or prohibitions in developments consents. Council went on to argue that the planning regime would be subverted if a developer could accept the limitations in a consent (such as the condition preventing amalgamations) carry out the development under the consent, and then evade the limitations by obtaining a CDC.

It is not clear whether the Court, when accepting Council’s arguments, accepted this broader argument.

If it did, then this is new law. The effect would be that all consent conditions in the nature of prohibitions will continue to have effect, even if not of a type referred to in clause 5.4(1)(g) of the Codes SEPP, and even where the Codes SEPP does not attempt to preserve those consent conditions (such as in respect of a wide range of other types of complying development).

This would have broad reaching ramifactions. A local council would be able to avoid the application of the Codes SEPP to particular types of development by imposing standard conditions of consent. For example, a Council could impose a condition prohibiting the erection of a dwelling on a particular lot (or all lots for that matter) when granting a consent to a subdivision of land. This would prevent the General Housing Code in the Codes SEPP from permitting a dwelling to then be erected pursuant to a CDC, thus forcing developers back to the Council to seek approval for dwellings. This clearly subverts the beneficial purpose of the Codes SEPP.

It may be that the next time the issue of the continuing application of consent conditions under the Codes SEPP comes to be considered, the Court will interpret this decision as being limited to its particular facts, and take the narrower view of the decision, that the particular condition which was breached was in respect of carparking, and therefore fell within clause 5.4(1)(g).

In the meantime, however, there remains some doubt regarding the scope of the Codes SEPP.

If you wish to discuss any aspect of this blog, please contact Megan Hawley on 8235 9703.