Posted on August 2, 2022 by Adriana Kleiss and Megan Hawley 6

Zombie Development: Acting on Old Development Consents

In recent years concerns have been raised by residents and environmentalists about ‘zombie’ housing estates in bushland areas along the NSW South Coast, including in the coastal towns of Manyana, Broulee and Tuross Head. The issue was back in the news recently, with concerns being raised by residents about plans to commence construction works for a residential subdivision at Mirador on the Far South Coast which was approved more than 30 years ago.

In this blog we consider what is meant by the phrase ‘zombie development’, how the issue arises, why such development may not be able to proceed, and whether there are ways to avoid consents being implemented many years after they are granted.

What is ‘zombie development’?

The phrase ‘zombie development’ has been used by resident objectors and environmentalists to refer to a development that was approved many years ago but has not been substantially carried out or completed. The phrase has been used particularly in relation to development consents issued for residential subdivisions on greenfield sites.

Such developments are raising concerns in circumstances where they do not comply with current planning laws, or they have adverse social, environmental or economic impacts which were not or could not be considered when the development application was assessed and consent was granted.

For example, natural disasters or other changes in the local environment may result in development sites having higher biodiversity significance for ecological communities and threatened species than they did at the time the development application was assessed. Or coastal erosion and sea level rise may mean that the development is no longer safe.

How does the issue arise?

Under the current law, a development consent will generally lapse after 5 years, but can be prevented from lapsing if ‘building, engineering or construction work’ relating to the consent is ‘physically commenced’ within that 5 year period (Environmental Planning and Assessment Act 1979 (NSW) (EPA Act), s4.53).

Once a consent is prevented from lapsing during that initial 5 year period, it remains in force and can be acted on at any time (subject to limited circumstances, discussed below).

The legal position regarding what is required to prevent lapsing has changed over time.

For approvals (which would now be treated as development consents) that were due to lapse prior to the commencement of the EPA Act in 1980, ‘substantial commencement’ was required to prevent the consent from lapsing. This required an important or substantial portion of the works approved under the consent to be physically commenced: see North Sydney Municipal Council v. Middle Harbour Investments Pty Ltd [1964] NSWR 934. 

However  after the commencement of the EPA Act, and until very recently, ‘physical commencement’ has been sufficient to prevent lapsing, and even minimal preparatory works such as survey work and the removal of vegetation were considered sufficient to meet this requirement (see for example, Cando Management and Maintenance Pty Ltd v Cumberland Council [2019] NSWCA 26).

From 15 May 2020, however, the new s96 of the Environmental Planning and Assessment Regulation 2021 provides that survey work, vegetation removal and other specified minor preparatory works will not be sufficient to constitute ‘physical commencement’ and prevent a development consent from lapsing.

Circumstances in which a ‘zombie development’ may not be able to proceed

Whether a development can proceed to completion long after it has received development consent will need to be determined on a case by case basis.

In this section we discuss some reasons why such a development may not be be able to proceed.

Can the development still comply with the consent?

Development consents are almost always issued subject to conditions.

It is an offence to carry out development which requires development consent otherwise than in accordance with the development consent issued, including its conditions (EPA Act, s4.2).

It is possible that due to the passing of time, a development will no longer be able to comply with the conditions of the development consent.

A consent may require compliance with various standards, such as the Building Code of Australia or applicable Planning for Bushfire Protection Guideline. As those standards change over time, or as site circumstances change, it may be increasingly difficult for the development as approved to be carried out in accordance with those requirements.

Also, the conditions of consent may require additional approvals to be obtained from various other authorities prior to the development proceeding. If such approvals were not granted initially, and the development cannot comply with current legal requirements relating to those approvals, or are otherwise unacceptable to the relevant authority, then the development may not be able to proceed.

If the development can no longer comply with the conditions of its consent, it may be possible to modify the consent. A modification application will be considered by the relevant consent authority in accordance with the current planning laws which apply to modification applications, and assessed on its merit.

Does the development require other approvals or licences?

In addition to the conditions requiring approvals from other authorities, the current law may require other approvals to be obtained which have not already been obtained, despite the grant of the development consent.

Some of the additional approvals or licences that may be required are:

• Approval under the Environmental Protection and Biodiversity Conservation Act 1999 (Cth) for a ‘controlled action’ under that Act, being an activity that will have a significant impact on a ‘protected matter’, such as a listed threatened species or ecological community.
• An Aboriginal Heritage Impact Permit (AHIP) under the National Parks and Wildlife Act 1974 (NSW) if the development involves an activity that may harm an Aboriginal object or place.
• An environmental protection licence under the Protection of the Environment Operations Act 1997 (NSW) if the development involves certain industrial, agricultural, transport, extractive or waste related activities that may impact upon the environment.
• An approval under section 138 the Roads Act 1993 if works are proposed to be carried out on a public road.
• A bushfire safety authority under s100B of the Rural Fires Act 1997 (NSW) for a subdivision of bush fire prone land that could lawfully be used for residential or rural residential purposes, or for a ‘special bushfire protection purpose’ within the meaning of that section.
• An approval under the Water Management Act 2000 (NSW) to construct and use water supply, drainage or flood works.

A failure to obtain any required licence or approval will prevent a development from lawfully proceeding.

Is the development consent time limited?

It is possible for a consent authority to condition a development consent to limit the period during which development may be carried out in accordance with the consent (EPA Act, s4.17(1)(d)).

If a development consent is time limited, it will not be able to proceed after the date specified in the consent.

Revocation or surrender of consents

A council or the Planning Secretary can revoke or modify a consent which is in force if of the view that the development should not be carried out or completed, having regard to the provisions of any proposed local environmental plan or State environmental planning policy (s4.57 of the EPA Act).

This can only be done after consultation with persons who would be affected by the revocation or modification, and compensation is payable. It is not a power that is often used for that reason. Importantly, however, in the absence of a proposed planning instrument, the power cannot be used.

Under s4.63 of the EPA Act a person entitled to act on a development consent can also voluntarily surrender the consent.

Can ‘zombie development’ be avoided?

If consent authorities wish to ensure that consents granted now will not result in inappropriate development being carried out many years into the future, consideration could be given to:

• Issuing time limited consents where appropriate so that development cannot be carried out beyond a certain date, or must be completed by a certain date.
• Conditioning a development consent so as to require a further consent, modification, or additional assessment if certain things occur. For example, the consent could:
  • require further assessment to be carried out if the site becomes bushfire prone or flood prone or affected by sea level rise or coastal erosion, or
  • require further environmental surveys to be completed before works commence or at certain stages of the development to identify any threatened species or ecological communities not previously considered.
• Conditioning a development consent to require the ongoing monitoring and management of the impacts of a development. For example, this can be done by requiring the preparation of management plans that are then incorporated into the consent by condition.
• Ensuring development consents clearly state what is being approved so that any further works outside the scope of the consent can be easily identified as requiring separate approval. This is particularly important if a development consent is only intending to approve removal of a certain number or species of trees or the clearing of particular areas or types of vegetation.
• Conditioning any subsequent development consent issued in relation to the land to require earlier consents to be surrendered (EPA Act, s4.17(b)).
• When there is a proposed change to planning controls, consider whether there are any consents which should be revoked or modified, although given the compensation entitlement, this power should clearly only be used in limited circumstances.

Proposed conditions of consent should be reviewed to ensure that they can be validly imposed in the circumstances of each case.

Conclusion

There have been calls for legislative change to prevent ‘zombie developments’. There are no current proposals specifically to address the issue. The recent changes to the lapsing provisions of the EPA Act noted above should at least ensure that developments which have not been commenced in any real way will not continue in force if no further work is done.

Consent authorities do however have some scope to address the ongoing effect of a consent through conditions, if careful thought is given to potential impacts in the future.

Otherwise, determining whether a ‘zombie development’ can proceed will depend on a careful analysis of the terms of the development consent and any additional approvals or licences that may be required.

If you wish to discuss the issues raised in this post, please contact Adriana Kleiss on 8235 9718 or Megan Hawley on 8235 9703.