Posted on November 13, 2012 by Megan Hawley

Savings provisions, existing uses and existing consents

In the decision of Presrod Pty Limited v Wollongong City Council [2012] NSWLEC 240, the Court considered whether a prohihited development, which was approved in reliance on savings provisions in the Wollongong Local Environmental Plan 2009 (LEP) had the benefit of existing use rights.

Presrod Pty Ltd appealed under s97 of the Environmental Planning & Assessment Act 1979 (EPA Act) against Wollongong City Council’s refusal of consent to a development application for the conversion and reconfiguration of hotel accommodation suites in an existing hotel.

Existing use issue

It was not disputed that the LEP prohibited hotels on the relevant land.

It was also not in dispute that there was a development consent applying to the land which authorised its use as a hotel (Hotel Consent).

Presrod argued that the hotel had the benefit of existing use rights which meant that its development application for alterations to that existing hotel could be granted consent. Council disputed that there were existing use rights, and had refused consent on the basis that the proposed development was prohibited.

The Hotel Consent related to a development application lodged before the LEP commenced, and was granted after the LEP had commenced, pursuant to savings provisions in the LEP.

The savings provision in the LEP stated:

“If a development application has been made before the commencement of this Plan in relation to land to which this Plan applies and the application has not finally been determined before that commencement, the application must be determined as if this Plan had not commenced.”

The definition of an existing use in s106 of the EPA Act, includes a use of a building, work or land…. for which development consent was granted before the commencement of a provision of an environmental planning instrument having the effect of prohibiting the use…’. The question was therefore whether the Hotel Consent was granted before the commencement  of the LEP.

The Applicant argued that the savings provision should be construed liberally such that the LEP did not “commence” for the purposes of the development application to which the  Hotel Consent  related, until final determination of the development application by the Council. This would mean that the Hotel Consent was granted before commencement of the LEP, and that the hotel use would have became an ‘existing use’ once the LEP did commence.

The Council argued, and the Court accepted that this was not the way in which the LEP operated.

The Court found no indication in the LEP to support an argument that  different commencement dates applied for some provisions, or that the savings provision altered the timing of the commencement of the LEP or any of the provisions in it.

Rather, the Court found that the effect of the  savings clause was to allow an application lodged within a certain time frame to be determined under an earlier instrument.

As such, at the time the Hotel Consent was granted, the LEP had already commenced. Therefore the hotel use did not fall within the definition of an ‘existing use’ in s106 of the EPA Act.

Operation of s109B of the EPA Act

Section 109B provides that development can continue pursuant to a development consent which is in force, despite any later provision of a planning instrument prohibiting the development. It also permits the modification of such a consent in accordance with the EPA Act.

As the hotel did not have the benefit of existing use rights, Presrod argued that s109B of the EPA Act applied. Council did not dispute that s109B applied such that the existing hotel could continue to operate under the Hotel Consent.

There is case law which indicates that a development consent can be modified  by way of the grant of another development consent (see Waverley Council v CM Hairis Architects [2002] NSWLEC 180). Also s80A(1) of the EPA Act authorises conditions which require the modification of an earlier consent.

Presrod argued that it could therefore modify the Hotel Consent by way of a further development application.

The Court rejected this argument and held that s109B only authorises the modification of a consent to which it applies under s96 of the Act. His Honour Sheahan J does not set out his reasons, but it can be assumed that he adopted the reasoning of the Council.

The Council argued that a consent can only be modified by the grant of a further consent, if that further consent can be lawfully granted. A development consent cannot lawfully be granted in respect of prohibited development which does not have the benefit of existing use rights.

Given that the hotel use is prohibited, and is not an existing use,  there is no power in the EPA Act to grant a development consent to a development application for that use.

Section 109B does not have the effect of enabling development consent to be granted to prohibited development. All it does is to permit existing consents to be modified.

As a result, s109B only contemplates modifications of consents to which it applies under s96 of the EPA Act.

The result in this case was that the development application could not be granted consent. It was also not possible in this case for the proposed development to be approved under s96 as the modifications which would have been required to the Hotel Consent were such as to make the resulting development not substantially the same as that to which the Hotel Consent related.

This decision clarifies the scope of s109B, and makes it clear that there is a limit to the types of modifications which can be made to developments which can continue only in reliance on s109B.

Previous case law has indicated that a development the subject of a consent to which s109B applies can also be an existing use (see Biscoe J of the Land & Environment Court in Currency Corporation Pty Ltd v Wyong Shire Council [2006] NSWLEC 692 and Reading Properties Pty Ltd v Auburn Council [2007] NSWLEC 186 ). Not all judges of the Court have agreed with that view (see Pain J in Caltex Australia Petroleum Pty Ltd v Manly Council [2007] NSWLEC 105). The disagreement has yet to be resolved by the Court of Appeal.

If the Hotel Consent in this case was granted before the LEP came into force, then, on the basis of Currency Corp and Reading, the existing hotel would also be an existing use. If that were the case, then further development consents could be granted in respect of that existing use in reliance on s108 of the EPA Act and the provisions regarding existing uses in Part 5 of the Environmental Planning & Assessment Regulation 2000.

The decision in this case means that whilst a savings provision may enable the grant of consent, despite the coming into force of a new instrument, a developer who obtains such a consent in reliance on savings provisions will not always be in the same position as a developer who obtained a consent before the coming into force of the instrument.