Posted on May 18, 2020 by Katie Mortimer and Megan Hawley
Lapsing of Consents – Preliminary Work and Extension of time
Last week 2 significant changes were made to the law in respect of the lapsing of developments consents.
First, the Environmental Planning and Assessment Regulation 2000 (EPA Reg) was amended to preclude preliminary works from saving a consent from lapsing, and second, the Environmental Planning & Assessment act 1979 (EPA Act) was amended to extend the period of lapsing for some consents, although the amendment does not seem to have the intended effect for all consents.
Section 4.53 of the Environmental Planning and Assessment Act 1979 (EPA Act) provides that a development consent for the erection of a building, subdivision of land or carrying out of a work will lapse after 5 years if building, engineering or construction work relating to the development is not physically commenced on the relevant land before the lapsing date.
The lapsing date can be reduced by the consent authority on the grant of the consent.
On Friday 15 May 2020 a new clause 124AA was inserted into the EPA Reg to specify that the following work will not be sufficient to constitute physical commencement of a development in order to save a development consent from lapsing:
(a) creating a bore hole for soil testing,
(b) removing water or soil for testing,
(c) carrying out survey work, including the placing of pegs or other survey equipment,
(d) acoustic testing,
(e) removing vegetation as an ancillary activity,
(f) marking the ground to indicate how land is to be developed.
Before this amendment, the case law which had developed was to the effect that preparatory or initiatory work, such as the types of work listed above, would be sufficient for the purposes of s4.53 to prevent a development consent from lapsing (provided that work was lawful and referable to the consent). See for example Iron Gates Developments Pty Ltd v Richmond-Evans Environmental Society Inc (1992) 81 LGERA 132 and Hunter Development Brokerage Pty Ltd v Cessnock City Council (2005) 63 NSWLR 124.
Just last year, the Court of Appeal held that removing shrubs was a type of work that could prevent a consent from lapsing in the particular circumstances of the case before it (see our blog on that decision here).
That position has now changed. However, the new clause only applies to a development consent granted from 15 May 2020.
Developers therefore need not be concerned if they have existing consents which are about to lapse, as the types of works contemplated above will still, according to the case law, be sufficient in most cases to prevent lapsing if lawful and referable to the consent.
However in respect of a development consent granted from 15 May onwards even carrying out all of the works noted above will not be sufficient to prevent a consent from lapsing and some more substantive work will be required.
Extension of Lapsing Periods
In addition, on 14 May 2020, s4.53 of the EPA Act was amended to provide that if a development consent commenced operation before 25 March 2020 and has not lapsed, it will now lapse 2 years after the date on which it would otherwise have lapsed. This two year extension also applies to developments consents the subject of a deferred commencement condition.
Also, if a consent did lapse after 25 March 2020 and before the amendment commenced on 14 May 2020, it is revived and taken not to have lapsed and the beneficiary will have an additional two years in which to commence the development.
However, any development consents granted after 25 March 2020, will continue to lapse 5 years after the date from which they operate. That lapsing date may still be reduced by the consent authority (although not if the consent is granted before 25 March 2022).
The new provisions are contrary to the explanatory note for the amending legislation which said that consents granted between 25 March 2020 and 25 March 2022 will not lapse for 7 years. In fact they will lapse after 5 years.
See the amendment to the EPA Reg here: Environmental Planning and Assessment Amendment (Lapsing of Consent) Regulation 2020
Read the Bill which amended s4.53 of the EPA Act here: COVID-19 Legislation Amendment (Emergency Measures—Miscellaneous) Bill 2020
If you have any questions regarding this post please contact Katie Mortimer on 8235 9716 or Megan Hawley on 8235 9703.