The Environmental Planning and Assessment and Electoral Legislation Amendment (Planning Panels and Enforcement) Act 2017 (NSW) (the Local Planning Panel Act) and the Environmental Planning and Assessment Amendment (Staged Development Applications) Act 2017 (NSW) (the Staged Development Act) received royal assent and came into operation on 14 August 2017.

Exclusion of Councillors from development decisions

The Local Planning Panel Act requires all local councils located wholly within the Greater Sydney Region and the City of Wollongong to establish a local planning panel. Other councils can also establish local planning panels, but it is not mandatory for them to do so.

Where a local planning panel has been constituted, the Council itself will have no authority to determine any development applications and all development applications will either need to be dealt with under delegation, by the local planning panel, or by the relevant regional panel.

This is a very significant point, and one which is not clear in any of the media releases we have read relating to the introduction of local planning panels. Where a local planning panel is introduced – which will occur throughout Greater Sydney and Wollongong – all development decisions will be taken out of the hands of elected Councillors.

The Councillors will still have a role in strategic planning, although a council will be able to ask its local planning panel for advice in relation to such matters.

It is proposed that the Minister will issue a section 117 Direction to require that the following types of development applications must be determined by local planning panels:

  1. those with a capital investment value over AU$5 million;
  2. those with 10 or more objectors, or
  3. those where the landowner is a Council, Councillor, member of Council staff or a State or Federal member of Parliament.

The Local Planning Panel Act aims to reduce corruption in local councils and is modelled on giving additional power to existing Independent Hearing and Assessment Panels (IHAPs). While IHAPs are used by a number of local councils currently, their functions and operation vary widely between councils and they often are not empowered to determine development applications, instead performing a mere advisory role.

The Local Planning Panel Act empowers such panels to be the consent authority for certain types of development, and, importantly, makes the implementation of such panels mandatory across Greater Sydney and Wollongong.

Existing IHAPs will be retained under savings and transitional provisions with modifications to reshape these IHAPs into compliant Local Planning Panels.

A Local Planning Panel must include the following 4 members:

  • a Ministerially approved independent person appointed as the chairperson of the panel with relevant expertise that includes expertise in law or in government and public administration,
  • 2 other Ministerially approved independent persons with expertise in at least one area of planning, architecture, heritage, the environment, urban design, economics, traffic and transport, law, engineering, tourism or government and public administration, and
  • a representative of the local community who is not a councillor or mayor.

The following people are prohibited from being panel members:

  • a councillor of any council
  • a property developer or a close associate of a property developer
  • a real estate agent

The Local Planning Panel Act also amends the capital investment threshold for Regional Planning Panels from $20 million to $30 million, although this change has not yet commenced.

This means that, generally speaking, the consent authority for most forms of private development across Sydney and Wollongong will be as follows:

  1. For development under AU$5 million with less than 10 objectors – council officer under delegation;
  2. For development over AU$5 million or with 10+ objectors – the local planning panel; and
  3. For development over AU$30 million – the regional panel.

Any Greater Sydney councils that do not already have an IHAP will have until 1 March 2018 to set up a local planning panel. Any relevant councils that currently have an IHAP will be deemed to have a local planning panel from 1 September 2017.

Reinstating staged development applications

The Court of Appeal decision of Bay Simmer Investments v NSW [2017] NSWCA 135 created widespread consternation in the development industry in finding that a widely accepted use of the staged development application provisions of section 83B of the Act for concept proposals was unlawful.

The Court of Appeal found that if a stage 1 development application for a concept proposal would only be followed by one detailed development application, then it wasn’t a “staged development application” for the purposes of section 83B. The effect of this decision was that a stage 1 development application for a concept proposal must propose at least 2 subsequent detailed development applications for the development of different parts of the site to qualify as a staged development application under section 83B.

The case had wide ranging ramifications across the industry, and impacted upon countless development applications already in the assessment pipeline. The use of the staged development application pathway is particularly popular for design competitions, and to avoid the requirement for site specific DCPs.

The Staged Development Act introduces minor but critical amendments to confirm that a staged development application (which has been renamed a concept development application) can be followed by only one detailed development application.

The transitional provisions also provide that all staged development applications lodged before the commencement of the amendments will be deemed to be concept development applications under the new provisions and can be approved as such and that all staged development applications approved before commencement of the Staged Development Act will be deemed to be concept development consents. The effect will be to save existing staged development consents and development applications that would otherwise have been in jeopardy following the Bay Simmer decision.