The validity of certain staged development applications, and consents granted on the basis of those applications, is in question following the decision of the Court of Appeal in Bay Simmer Investments Pty Ltd v State of New South Wales [2017] NSWCA 135 on 15 June 2017.

The Court of Appeal unanimously overturned the decision of the Land and Environment Court at first instance, and ruled that the development consent for the Walsh Bay Arts Precinct was invalid.

The proposed Walsh Bay Arts Precinct comprises Pier 2/3 and Wharf 4/5 at Walsh Bay, and a new waterfront square between them, and is classified as State significant development. It was submitted as a staged development application in July 2014 by Arts NSW, a government agency, and was approved by the Minister’s delegate in May 2015.

What does this mean for you?

If you are submitting a staged development application for “concept proposals”, ensure that you:

  1. expressly request that the application be dealt with as a staged development application;
  2. identify two or more proposed stages of the development, relating to separate parts of the site, and either:
    • if you have included concept proposals only, identify that there will be two or more detailed development applications to follow; or
    • if you have included a detailed proposal for the first stage of development, identify that there will be one or more detailed development applications to follow; and
  3. address the matters under s 79C(1) of the EP&A Act in relation to both construction and operation of the development, as they will be considered by the consent authority in determining your application.

If you hold a development consent granted on the basis of a staged development application, now is the time to review your staged development application to see if it complied with the above three points. If it did not, your development consent is at risk of invalidity.

Further details regarding the Court’s decision are set out below.

The decision

The Court of Appeal made its decision on the following two bases:

(1) Staged development applications require at least two detailed proposals for separate parts of the site

The development application for the Walsh Bay Arts Precinct was submitted and determined as a staged development application containing concept proposals only, under s 83B of the Environmental Planning and Assessment Act 1979 (NSW) (EP&A Act).

On appeal, an issue was raised as to whether or not it could properly be characterised as a staged development application.

A staged development application is defined in s 83B(1) 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 held that a staged development application requires that there be two or more detailed proposals for separate parts of the site – there cannot be a single detailed proposal for the whole site. This means that a staged development application must include concept proposals for two or more stages of development, and either:

  • be followed by two or more detailed development applications; or
  • include a detailed proposal for the first stage of development, and be followed by at least one detailed development application.

As the proponent’s application referred to “one or more” subsequent development applications, and did not itself include a detailed proposal for a separate part of the site, it left open the possibility of a single detailed proposal for the entire site. Accordingly, the application was not a staged development application and the consent granted on the basis of that application was invalid.

(2) Construction-related impacts must be considered even at the “concept” stage

The appellant, the owner of a restaurant on the southern side of the development site, argued that the construction-related impacts of the development on local businesses were required to be considered and had not been. This was despite the fact that construction was expected to take 18-24 months.

Both the Minister’s delegate (who approved the application) and the Land and Environment Court at first instance (which rejected the appellant’s challenge to the validity of the consent) considered that construction-related impacts would be taken into account when assessing the subsequent detailed development application/s, and were not required to be considered at the “concept proposals” stage. The application was therefore assessed on the basis of the impacts from the operation and use of the completed development only.

The Court held that the matters under s 79C(1) of the EP&A Act must be considered by the consent authority even at the “concept proposals” stage. The only limitation is that the matters must be of relevance to the development the subject of the development application.

The matters under s 79C(1) include the likely environmental, social and economic impacts of the development. The Court held that impacts flowing from the carrying out of the development (including construction), as well as impacts flowing from the existence and operation of the development, were relevant and should have been considered.

In addition, any submissions made in relation to the application must be considered under s 79C(1), which in this case included objections relating to the impact of construction work on local businesses.

The Court therefore held that the consent was also invalid on the basis that the Minister’s delegate was required to give consideration to construction-related impacts when granting consent to the application, but had not done so.