Posted on June 16, 2017 by Stuart Simington

Single stage concept DAs held to be invalid and construction impacts relevant to concept approvals

The NSW Court of Appeal, yesterday, held to be invalid the widely adopted practice whereby staged development applications are used to obtain concept approval for single stage developments. The Court also found that in the assessment of the concept approval for Walsh Bay, it was necessary for the consent authority to have considered construction impacts.

Unless the Government intervenes, the case is likely to have significant implications for the validity for a large number of existing consents for major projects and in turn the certainty of associated investment.

Section 83B of the Environmental Planning and Assessment Act 1979 (EPA Act) defines a staged development application as follows:

83B   Staged development applications

(1)   For the purposes of this Act, a staged development application is a development application that sets out concept proposals for the development of a site, and for which detailed proposals for separate parts of the site are to be the subject of subsequent development applications. The application may set out detailed proposals for the first stage of development.

There are usually considered to be two principal benefits of submitting a staged rather than an ordinary development application.

Firstly, and generally speaking, the preparation of a staged development application is considered to require less detail and ordinarily, therefore less cost up front.

Secondly, if a consent is obtained, the concept is crystalised and generally preserved against changes in planning controls by s83D(2) of the Act which provides that:

‘While any consent granted on the determination of a staged development application for a site remains in force, the determination of any further development application in respect of that site cannot be inconsistent with that consent.’

For these reasons, staged development applications are frequently used for locking in key parameters of proposed development, such as a building envelope and allocations of GFA.

In the City of Sydney, for example,  it has been common practice to seek approval for a conceptual building envelope with the detailed design of the building coming in a later single stage development application which is required to be the subject of a design competition.

In Bay Simmer Investments Pty Ltd v State of New South Wales [2017] NSWCA 135, Arts NSW, lodged a development application, said to be a staged development application, for the “Walsh Bay Arts Precinct” with the Minister for Planning as a State significant development.

The concept was subsequently approved by the Minister’s delegate as described in the application in the following terms:

“This Stage 1 SSDA seeks ‘in principle’ approval for the overall WBAP concept only. It will be followed by one or more detailed SSDAs for the construction of the public domain, building alterations and specific uses. The purpose of this concept SSDA is to provide an overview of the project and potential impacts across the precinct, and to establish a framework for the future detailed design, land use and construction works required to deliver the proposed WBAP project.”

The appellant ran a nearby restaurant business and opposed the development, primarily on the basis that no consideration had been given in the granting of the consent to the effects of the proposed construction phase on local businesses, including her own.

In the Land and Environment Court, the judge upheld the validity of the consent even though finding that the delegate had not in fact had regard to the adverse construction-related impacts on local businesses. Pain J held that these matters were not matters of relevance under s79C(1) of the Act at the concept approval stage. We previously reported on the decision here.

On Appeal, however, the Court of Appeal held that the consent was invalid.

Firstly, the DA was not a staged development application because it did not propose a concept for detailed proposals for separate parts of the site.  The Court considered that a staged DA must propose at least two separate detailed stages of the development relating to separate parts of a site and the subject DA could not be interpreted as necessarily involving such separate stages.

As such, the DA did not have the benefit of the special provisions that apply to staged development applications. And if so, the consent purportedly granted was not a consent at all because it did not grant consent to any actual development (eg demolition, or the erection of a building).

Even if it had have done that, the decision to grant the consent miscarried because the delegate had not had regard to the construction impacts that would be associated with the construction of the development.

While Basten JA accepted that the concept proposal provisions of the Act are designed to ‘increase certainty up front and reduce environmental and investment risks and costs’, he held that ‘it would not promote either purpose to exclude from the assessment process at the initial stage any consideration of the impacts of construction, by limiting the assessment process to the impacts of the constructed development.’

Put in another way, ‘There was no self-evident reason [at the concept approval stage] to limit those impacts to impacts flowing from the existence and operation of the development, once carried out, and excluding the impacts of the carrying out of the development.‘

Implications

We think that this case will have significant implications for a large number of existing approvals for significant projects which rely on single stage concept approval consents.

It may well be that consideration will need to be given by the NSW Government to whether there is a need for retroactive legislation to validate prior approvals.

The decision may also prompt challenges to other concept consents where it can be shown that construction impacts were not given requisite consideration.