Court of Appeal decision shakes up staged development applications

The NSW Court of Appeal (Court) recently struck down a development consent for the Walsh Bay Arts Precinct in Bay Simmer Investments Pty Ltd v State of New South Wales [2017] NSWCA 135. This decision has implications for certain pending and determined staged development applications (Staged DAs). In response, the Department of Planning and Environment (DPE) has proposed an amendment to the Environmental Planning and Assessment Act 1979 (EP&A Act). A brief summary of the Court’s decision and the proposed legislative amendment is below.

The Court’s decision

Arts NSW lodged a development application for the Walsh Bay Arts Precinct as a Staged DA, comprising a concept proposal as stage 1, with the intention that a subsequent detailed development application for the actual works would form stage 2. Consent was granted for the concept proposal. A local restaurant business challenged the validity of the consent on the basis that the consent authority had failed to consider construction related impacts on the surrounding businesses, and that the development application could not properly be characterised as a Staged DA.

The Court held the consent was invalid, finding that:

1. construction impacts should be considered at the concept proposal stage (notwithstanding that the concept proposal did not approve construction); and
2. if the initial Staged DA only relates to a concept proposal and does not include a detailed proposal for a separate part of the site, then the initial application must be followed by at least two detailed development applications, each for separate parts of the site, in order to be considered a Staged DA under the EP&A Act.

Commentary

These findings are contrary to the usual approach taken by councils and the DPE, which has been to assess construction impacts at a later stage, if the concept proposal does not permit construction to be carried out, and to allow a concept proposal to be followed by a single development application for construction.  This has especially been the case in the City of Sydney, where the provisions in the Sydney Local Environmental Plan 2012 for larger sites in clause 7.20 are typically complied with by securing a stage 1 concept approval (in place of a site-specific development control plan) followed by a second development application which covers the whole of the site.

As a result of the decision, the practice of lodging a Staged DA comprising a concept proposal for a building envelope with a single subsequent detailed development application to erect a building within that envelope, will no longer be possible. This complicates the approval process for new and existing Staged DAs which are yet to be determined. A risk also arises for legal challenges against consents for Staged DAs which have already been granted.

The DPE’s proposed legislative amendment

In response to the Court’s decision, on 30 June 2017 the DPE released the draft Environmental Planning and Assessment Amendment (Staged Development Applications) Bill 2017 (Bill). If passed by Parliament, the Bill will amend the current provisions for Staged DAs by:

1. renaming Staged DAs as ‘concept development applications’ (Concept DAs);
2. allowing a Concept DA to be followed by only one development application for the site, rather than multiple applications as required by the Court; and
3. allowing the impacts of carrying out development to be considered when approval to carry out works is sought.

The savings and transitional arrangements will ensure that these changes apply to both pending and already determined Staged DAs. The Bill is on exhibition until 24 July 2017 and is expected to be introduced to Parliament later this year.

If passed, the Bill will effectively restore the previous commonly-understood approach.  Importantly, it will also clarify that a concept-only first stage DA need not assess all of the impacts of carrying out development at the concept stage.

We will continue to monitor the progress of the Bill. If you have any questions please contact a member of our Environment and Planning team.