Posted on March 11, 2016 by Frances Tse

Lapsing of Consents – Works Need Not be for a Core Activity

The Supreme Court has put beyond doubt that when determining whether particular works can prevent lapsing of a development consent under section 95(4) of the Environmental Planning and Assessment Act 1979 (‘EPA Act‘), there is no place for distinguishing between works relating to what is perceived to be the ‘focus’, ‘core matter’ or ‘core activity’ of the consent and other works.

In Macquarie International Health Clinic Pty Ltd v Sydney Local Health District; Sydney Local Health District v Macquarie Health Corporation Ltd; Macquarie International Health Clinic Pty Ltd v City of Sydney Council (No 9) [2016] NSWSC 155, the Supreme Court considered whether certain works that were carried out prevented the lapsing of a development consent for a private hospital pursuant to section 95(4) of the EPA Act.

The development consent was ‘…for permission to demolish two buildings and erect a 7-9 storey private hospital and medical centre, including ancillary facilities and a New Hospital Road…’

Section 95(4) of the EPA Act provides that development consent for the erection of a building, the subdivision of land or the carrying out of a work, does not lapse if building, engineering or construction work relating to the building, subdivision or work is physically commenced on the land to which the consent applies before the date on which the consent would otherwise lapse.

Macquarie International Health Clinic Pty Ltd (Macquarie) had carried out works including:

  • demolition and removal of two existing buildings on the site,
  • undertaking bulk excavation and earth works on the site, and
  • undertaking earth works and construction of a new road.

There was no dispute that the above works were carried out lawfully. Macquarie argued that these works were sufficient to prevent the consent from lapsing.

The Sydney Local Health District (‘SLHD‘) argued that the consent had lapsed. It argued that the ‘focus’, ‘core matter’ or ‘core activity’ of the development consent was the building of the private hospital and that any works relied on to prevent lapsing of  the consent must have a sufficient connection or nexus with, and demonstrate a genuine commitment to build the private hospital building.

SLHD argued that the works described above were not specific to the private hospital building and could not be relied on to prevent the development consent from lapsing.

The Court clearly rejected SLHD’s arguments. The Court confirmed the well established principles set out in  Hunter Development Brokerage Pty Ltd v Cessnock City Council; Tovedale Pty Ltd v Shoalhaven City Council (2005) 140 LGERA 201 that:

  • building, engineering or construction work is related to works the subject of  a consent if it is ‘a necessary step in, or part of, the process required for‘ the work the subject of the consent,
  • there is no place for differentiating between works that may be ‘merely preparatory’ and other works – that concept relates to the now abandoned statutory requirement of ‘substantial commencement’,
  • in order to qualify for being ‘physically commenced’, the building, engineering or construction work must be more than a sham, merely notional or equivocal. The work must truly relate in a real sense to what has been approved.

The Court further held that there is no place for interpreting a development consent by dissecting the various activities authorised by the consent and attempting to identify its ‘focus’ or ‘core activity’.  A development consent must be treated as an undifferentiated whole and if building, engineering or construction work relating to one activity authorised by the consent is physically commenced, then the whole of the consent is saved from lapsing.

Having regard to the above principles the Court found that the works carried out could be relied on to prevent lapsing of the development consent because they were either works which were in fact authorised by the consent (being the demolition of the existing buildings) or were works which were a necessary step for the erection of the private hospital and were not merely notional.

This case is a useful reminder to both councils and developers on the established principles for determining whether particular work may prevent lapsing of a development consent.