Posted on September 21, 2012 by Megan Hawley

Validity of occupation certificates

The validity of an occupation certificate has been considered by the Land and Environment Court for the first time in Cessnock City Council v Laila Investments Pty Ltd [2012] NSWLEC 206.

Occupation certificates are one of the four kinds of certificates that are issued under Part 4A of the Environmental Planning and Assessment Act 1979 in respect of development requiring development consent under the Act.

Section 109H(2) of the Environmental Planning & Assessment Act 1979 provides that ‘an occupation certificate must not be issued unless any preconditions to the issue of the certificate that are specified in a development consent or complying development certificate, or any requirements of a planning agreement referred to in section 93F that, by its terms, are required to be complied with before such a certificate is issued, have been met’.

In Laila Investments, Pain J considered the Court of Appeal’s decision regarding the validity of subdivision certificates in Northern Residential Pty Ltd v Newcastle City Council [2009] NSWCA 141.

The Court of Appeal held that the words ‘must not be issued‘ in s109J in relation to subdivision certificates made it a mandatory requirement that the preconditions to the issuing of a subdivision certificate certificate specified in that section must be met before the certificate could be lawfully issued. If the preconditions are not met and the certificate is issued, the certificate will be invalid.

Pain J held that the same words in s109H(2) in relation to occupation certificates had the same effect in relation to the preconditions specified in s109H.

In Laila Investments, a number of the conditions of the relevant development consent, including conditions requiring the concurrence of RMS and the provision of vehicular access prior to issue of an occupation certificate, had not been complied with when the occupation certificate was issued. Pain J held that the relevant occupation certificate had been  invalidly issued.

An invalidly issued Part 4A certificate can have significant adverse implications for the development to which it relates. An invalidly issued certificate will have implications for developers, owners and occupiers, buyers and sellers and financiers. The issuing of an invalid certificate may lead to discipilinary action or conceivably a negligence action against the certifier who issued the certificate.

It is clear from the decisions in Laila Investments and Northern Residential that there is no discretion to issue an occupation or a subdivision certificate if the statutory preconditions are not met. The same would apply to the issuing of construction certificates.

Certifiers must ensure that they carefully review the conditions of any relevant consent,  complying development certificate or any planning agreement entered into in connection with a development to ensure that all preconditions to the issue of the certificate are met before they issue certificates.