The NSW Court of Appeal in Bay Simmer Investments Pty Ltd v State of New South Wales [2017] NSWCA 135 has struck down a development consent for a State significant development at Walsh Bay.

Background

On 1 July 2014, Arts NSW, a New South Wales government agency, lodged a development application for the “Walsh Bay Arts Precinct”, a $210 million development located between the Barangaroo headland and Dawes Point Park (the DA). The DA was subsequently approved on 21 May 2015.

Soon after, the grant of the DA was challenged by Bay Simmer Investments Pty Ltd (Bay Simmer), a restaurant operator located at the southern side of the development. The proceedings, which commenced in the Land and Environment Court on 3 September 2015, challenged the grant of the DA on the primary basis that the Minister for Planning (the Minister) had failed to assess the effects of the development on local businesses such as the restaurant.

The decision of the Land and Environment Court

The DA sought consent for the “overall Precinct concept only” as part of a greater “staged development application” pursuant to section 83B of the Environmental Planning and Assessment Act 1979 (NSW) (the EP&A Act).

The DA attached technical reports which recognised that the Precinct would likely impact on surrounding businesses due to an increase in noise, vibration and traffic. Despite this, the DA did not further investigate the impact of these changes and merely asserted that the concept DA would be followed by “one or more” detailed DAs which would consider any construction-related impacts.

At first instance, Bay Simmer challenged the decision of the Minister to grant the DA where consideration of construction-related impacts was deferred. In essence, they argued that this failure to consider the issues raised in section 79C(1) of the EP&A Act resulted in a legal error, rendering the concept DA invalid.

However, the Court rejected this argument on the basis that the concept DA did not propose any construction work itself and merely requested consent for the overall concept of the precinct development. As such, the construction-related impacts raised by Bay Simmer could not be direct or indirect consequences of the concept and therefore, consideration could be given to them during review of the detailed DAs which were soon to follow.

Issues on appeal

The two main issues on appeal before the Court of Appeal were:

  1. whether the proposal was a “staged development application” within the meaning of section 83B of the EP&A Act; and
  2. whether the Minister was required to consider any construction-related impacts of the proposed development.

The hearing of the appeal was held on 21 April 2017. The decision was handed down on 15 June 2017.

Consideration of issue 1: Staged development applications

The DA was lodged as a staged development application under section 83B of the EP&A Act.

Section 83B(1) defines a staged development application as:

“a development application that sets out concept proposals for the development of a site, and for which detailed proposals for separate parts of the site are to be the subject of subsequent development applications. The application may set out detailed proposals for the first stage of development.”

The Court of Appeal held that this definition necessitated that a staged development application involve two or more detailed proposals lodged in respect of separate parts of the site.

The DA lodged by Arts NSW only referred to “one or more” subsequent development applications. In doing so, it did not commit the proponent to submitting more than one further DA, nor did it specify the separate parts of the site which would be subject to the subsequently submitted detailed DAs.

Accordingly, the Court found that the DA was not a staged development application for the purposes of the Act and, therefore, any consent granted on this basis was necessarily invalid.

Consideration of issue 2: Construction-related impacts

Section 79C(1) of the EP&A Act requires that a consent authority is to consider any construction-related issues which may result from a proposed development. The matters for consideration should include the likely environmental, social and economic impacts of the development. The only limitation on this requirement is that the matters for consideration must be relevant to the development under the DA.

At first instance the Court determined that consideration of these issues could occur during later stages of the approval process, and a failure to consider them during the concept stage was not fatal.

However, this was overturned on appeal as the Court found that there was no basis in law for suggesting that assessment of the DA during the concept stage should be limited to the impacts of the concept only. Further, the Court held that impacts flowing from the carrying out of the development, as well as impacts flowing from the existence of the development were relevant and should have been considered at the concept stage.

Basten JA stated at [62]:

“It would be curiously artificial to assess any development application on the basis that the completed development had simply materialised, without regard to how it had materialised.”

The Court, therefore, also found that the DA was invalid as the Minister failed to give consideration to any construction-related impacts of the DA when granting consent to the application.

Impact of the decision

Practically speaking, the Court of Appeal’s decision would put an end to single stage concept DAs and would also likely result in concept DAs being subject to a more rigorous assessment of construction-related impacts.

The decision may also have resulted in an increase in challenges to other single stage concept DAs which have already been approved by a consent authority.

The proposed NSW Government response

In response to the decision, the NSW Government has released a public consultation draft of the proposed changes the EP&A Act.

Those changes rename staged development applications as “concept development applications” and would allow a concept approval and a single subsequent detailed application. Also new provisions seek to make it clear that the impacts of carrying out the development may be considered when the concept proposal is being assessed but must be considered where approval to carry out works is sought.

The public consultation draft also includes certain savings and transitional arrangements. These provide that pending staged development applications are taken to be a concept development application and that any consent granted for a stage development application is also taken to be a concept development application.

The transitional arrangements do not apply to render valid a development consent that was before 30 June 2017 declared by a court to be invalid and as so, it will not save the Walsh Bay DA.