Insights

In brief - NSW has experienced rapid and significant planning and environment change

There has never been so much incremental reform impacting development in NSW as there is today. All this at a time of big crane counts, big infrastructure and a need to increase housing supply. We take a look at the key changes in 2016 to bureaucracy, the Environmental Planning and Assessment Act 1979 (the EP&A Act), case law and other environment and planning processes.

While the NSW coalition mantra of "evolution not revolution" has been recited as the pragmatic underpinning for the latest reform agenda (in pointed contrast to the 2013 wholesale proposed-but-unsuccessful reform of the EP&A Act, the cumulative impact of each reform is beginning to feel more revolutionary than evolutionary. The upshot is that significant change is happening faster than you can say “Have your say”, in order to facilitate, among other things, the “new normal”; annual population increases of 30,000 people each year in NSW.

In this context, this article provides a high level summary of some of the key changes during 2016 to:
  • bureaucracy
  • the EP&A Act and related policies
  • case law
  • other environment and planning processes

Bureaucratic changes impacting councils

At the macro level, the amalgamation process for many councils is still being resolved in the courts. As the below Jade Precedent Tracker visually demonstrates, the courts have heard a large cluster of cases challenging the amalgamations.

We mention this because the coalface of planning and environment issues is often at this tier of government. During what appears to be somewhat of a “caretaker” period (the period when councils are under administration and before a new elected council is installed), councils are meant to be complying with the Department’s Circular No 16-18/ 27 June 2016 / A489192 Council decision-making prior to the September 2016 local government elections. Although it is not a binding policy, we have observed difficulties in its implementation and even soft enforcement. Despite this, the circular is an important policy if NSW truly wants to “make things happen” given the current flux in local government. This is particularly important given the latest Australian Bureau of Statistics data showing a fall in approvals over the last six months. While correlation does not prove causation, the reduction in approvals does coincide with the amalgamation of councils in NSW.

We have also just witnessed (and will continue to see) changes to the Local Government Act 1993 of both a symbolic and substantive nature, including the replacement of the charter with principles. While some of these reforms are geared at removing red tape, work will inevitably be required to ensure compliance and implementation of the new requirements or options available. Councils will need to adjust to some of the more permissive regulation embodied in the Act. 

One of the key environment and planning changes is the absence from the principles of the requirement for councils, councillors and council employees to have regard to the principles of ecological sustainable development (ESD) in carrying out their responsibilities and its removal from the principles for local government. 

Of course, many of the Acts under which local government works, such as the EP&A Act, still require consideration of ESD principles. Accordingly, the removal of ESD in the Local Government Act amendments is likely to have more of a symbolic effect. 

The other major change to the bureaucracy dealing with environmental planning issues is to the Department of Planning and the creation of the Greater Sydney Commission (GSC) through the Greater Sydney Commission Act 2015. The significant change here is the introduction of the GSC which came into effect on 27 January 2016. Many of the Minister’s functions have been delegated to the GSC. This is particularly relevant for planning proposals. The GSC has also been tasked with some important planning functions such as the creation of District Plans, discussed in more detail below.

Finally, the enforcement capabilities of the Department of Planning have been ramped up (see its Ministerial media release Toughest fines in the country come into force) across the Sydney, Singleton, Wollongong and Queanbeyan offices - doubling the number of compliance officers in the field across NSW to monitor and enforce the conditions placed on developments of state significance.

Changes to the Environmental Planning and Assessment Act and related policies

We recently attended an end of year seminar from Carolyn McNally, Secretary of the Department of Planning, who mentioned that a more comprehensive Planning Bill was on her desk. While we wait for that to eventuate, some of the changes gazetted in 2016 address:
  • the introduction of pre-development application consultation between neighbours
  • integration of the new Sydney Planning Panels (which have replaced Joint Regional Planning Panels (JRPPs) within Sydney) into the EP&A Act, and setting out the new role of the Panels as consent authorities
  • an end to transitional arrangements for projects approved under Part 3A, including modifications
Other reforms include:
  • A new VPA Practice Note dealing with "value capture", the practices of councils entering VPAs and the appropriateness of using VPAs in certain circumstances. It attempts to strike a balance between legitimate efforts to "capture" development profits and illegitimate "revenue raising", in light of mounting evidence that VPAs were being used by some councils as a "ransom".
  • A new pre-Gateway review process allowing reviews (by the Panels) of planning proposals that have stagnated. This is an important change necessary to reduce blockages in the system. We are currently acting on a number of proponent-led planning proposals impacted by a lack of inertia, which ironically seems partly attributable to the amalgamation of councils. It remains to be seen whether these blockages will be smoothed out with this review process.
  • The introduction of District Plans – these plans appear to be an attempt to bring NSW back to what some see as the planning utopia that existed with the Cumberland Planning Scheme in the 1950s. These plans provide a policy link between the state and regional-level strategic planning and local controls in LEPs, and will help inform the 2017 review of A Plan for Growing Sydney (Greater Sydney's regional plan). District Plans also contain matters for consideration relevant to development applications or rezonings.
  • Further SEPP refinement and consolidation (with six SEPPs being repealed) and changes to SEPP 44 relating to koala habitat protection to broaden the scope of land that falls within the core koala habitat area.
  • The replacement of JRPPs with Sydney Planning Panels (SPPs). The SPPs determine regionally significant development applications (generally development with a capital investment value of more than $20 million) within the Greater Sydney Region (as defined in the GSC Act), and consider rezoning reviews. These are the same functions previously performed by the former Sydney East and Sydney West JRPPs.

Significant planning and environment cases

R v Turnbull murder case 

The Supreme Court issued its sentencing decision involving a lengthy custodial sentence of 35 years in R v Turnbull (No. 26) [2016] NSWSC 847, for the murder of an environmental officer while exercising his public functions investigating native vegetation clearance. While not strictly an environmental law case, this decision marks the conclusion of a two-year trial, preceded by investigations into allegations of unlawful clearance of native vegetation for the purpose of converting two properties to broadacre farms. It also provides some background to the repeal of the Native Vegetation Act 2003 and the introduction of the Biodiversity Conservation Act 2016.

Compulsory acquisition cases before the Land and Environment Court

The Land and Environment Court has had a busy year dealing with the number of compulsory acquisitions going on within NSW. Judgments in Dial a Dump Industries Pty Ltd v RMS [2016] NSWLEC 39, and in (the long-awaited) RMS v Allandale Blue Metal Pty Ltd [2016] NSWCA 7 were handed down. Both cases have helped clarify the types of interests that are compensable when an interest in land is compulsorily acquired. Bligh Consulting Pty Ltd v Ausgrid [2016] NSWLEC 75 also provides some useful analysis on the approach to valuing construction easements that are compulsorily acquired, although the matter is under appeal. 

Reysson Pty Limited v Roads and Maritime Services (No 4) [2016] NSWLEC 159 was perhaps one of the most novel compulsory acquisition appeals in 2016. The case involved an appeal against the amount of compensation offered by the RMS for the compulsory acquisition of land at Banora Point in far north New South Wales. The primary hearing was conducted in November 2012. Due to the age-barred imposition on judges at retirement age, the sitting Judge in that matter was unable to hand down judgment on a weekday before leaving the bench . Accordingly, the decision in favour of RMS was handed down to the parties and their legal representatives on Sunday 5 June 2016 at about 4.30 pm via teleconference – the day before Justice Craig’s 72nd birthday. In these proceedings, the applicant submitted that the judgment and orders should be set aside because of the procedural irregularities observed by the Court in handing down its primary decision. The Court rejected these arguments, but interestingly did not award costs given the compulsory acquisition context and due to the novel nature of the issues and the reasonableness of the arguments put.

Cases dealing with commencement and lapses of development consents

There have also been a number of cases that have cleared the air on physical commencement and lapses of development consents, which has been a recurring theme for us this year with numerous owners and purchasers requesting advice on this issue. The three key take home points from these cases are:

1. The following questions need to be answered affirmatively in order for the development consent not to lapse:
  • Is there a development consent for the erection of a building or the carrying out of a work?
  • Will the work relate to the approved development?
  • Will the work be commenced on the land to which the development consent applies before the lapse date?
(Kunc J in Macquarie International Health Clinic Pty Ltd v Sydney Local Health District; Sydney Local Health District v Macquarie Health Corporation Ltd; Macquarie International Health Clinic Pty Ltd v City of Sydney Council (No 9) [2016] NSWSC 155 at [69])

2. It is well established that survey and geotechnical works can constitute “engineering work” for the purposes of section 95(4) of the EP&A Act (Benedict Industries Pty Ltd v Minister for Planning; Liverpool City Council v Moorebank Recyclers Pty Ltd [2016] NSWLEC 122 per Robson J (at [59]).

3. But the answer on these matters, as Tobias JA acknowledged in Hunter Development Brokerage Pty Ltd v Cessnock City Council; Tovedale Pty Ltd v Shoalhaven City Council [2005] NSWCA 169 (at [86]), that these cases turn on questions of "fact and degree" – shows that each case needs to be considered in light of the statute and case law that have emerged.

The EDO’s case for Millers Point Fund Inc v Lendlease Millers Point Pty Ltd & Others was also heard in November 2016, regarding a challenge to decisions by the NSW Planning Assessment Commission (PAC) on the Crown Casino development at Barangaroo. It will be interesting to see what results from this case in terms of the PAC's obligation to assess modifications of the development's proposed location.

Changes to other environment and planning legislation and processes

There have also been a myriad of other reforms but too many to substantively deal with each one. So in the spirit of 2016, we set out in “listicle” form a summary of the other changes that have occurred:
  • A new Container Deposit Scheme commencing in July 2017 that will reduce the strain on councils' obligations for waste collection. Under the scheme, anyone who returns an empty eligible beverage container to an approved NSW collection depot or reverse vending machine will be eligible for a 10-cent refund. A network of depots and reverse vending machines will open across NSW to receive the empty containers.
  • Proposed amendments to the Protection of the Environment Operations (Waste) Regulation 2014 to repeal the "proximity principle". This change will place an obligation on occupiers of levy-liable waste facilities who wish to claim a transported waste deduction to provide evidence of the lawfulness of the receiving facility to use the waste for the relevant purpose.
  • A new Coastal Management Act 2016 that will have a significant impact on development within the "coastal environment area" which is expansively defined to include land adjoining coastal waters, estuaries, coastal lakes and coastal lagoons.
  • A new Crown Land Management Act 2016. Crown land comprises 50% of land within NSW and often has high ecological importance. The new Act provides, among other things, for:
(i)    Ministerial powers to require Crown land managers to take environmental and heritage considerations into account in making decisions about Crown land
(ii)    community engagement in decisions about Crown land by requiring the preparation of a community engagement strategy for proposals that could affect public use of Crown land
(iii)    Councils managing Crown reserves being required to follow detailed community engagement provisions under the Local Government Act
(iv)    enabling the most appropriate local owner of Crown land to engage in negotiations during the process to transfer land out of the Crown Estate thereby providing for involvement for Aboriginal communities in Crown land and managing Crown land with native title rights and interests 
(v)    greater powers to stop illegal activity on Crown land
 
  • Strata law reforms under the Strata Schemes Development Act 2015 allowing developers to carry out "renewals" where 75% of lot owners in a strata scheme vote to support the strata renewal plan. This has also created appeal rights for owners to the Land and Environment Court to challenge the compensation they receive for these forced private acquisitions. We have started to see a run on these matters. The provisions form a new mechanism for enabling urban redevelopment with increased density.
  • Changes to the Land Acquisition (Just Terms Compensation) Act 1991 and the processes to be followed for councils in acquiring land. These changes: impose longer time frames for the pre-acquisition process; the potential for reinstatement to be compensated; and increase the amount paid for what was previously known as solatium (increased from $25,000 to $75,000). We mention this change as planning for the infrastructure required to support NSW’s projected population increases will inevitably require more compulsory acquisitions.
  • The introduction of the new Biodiversity Conservation Act and repeal of various other laws (e.g. Threatened Species Conservation Act 1995Native Vegetation Act, and parts of the National Parks and Wildlife Act 1974), including a Biodiversity Offsets Scheme. The changes include: requiring the preparation of a biodiversity development assessment report for development approvals if the activity is likely to significantly affect threatened species; and introducing a new biodiversity offsetting scheme (replacing biobanking) to create biodiversity credits which can then be transferred (meaning sold) or retired (meaning they cannot be sold).

Planning and environment watch list for 2017

The key things to watch out for in 2017:
  • further substantive amendments to the EP&A Act 
  • how the new Crown Land Management ActBiodiversity Conservation ActStrata Schemes Development Act and Land Acquisition (Just Terms Compensation) Act are implemented and what develops practically 
  • the enforcement of large planning approvals and the conditions attached to them
  • on a lighter note, judgments on a Sunday (per Reysson).

This article has been published by Colin Biggers & Paisley for information and education purposes only and is a general summary of the topic(s) presented. This article is not specific legal advice. Please seek your own legal advice for any questions you may have. All information contained in this article is subject to change. Colin Biggers & Paisley cannot be held responsible for any liability whatsoever, or for any loss howsoever arising from any reliance upon the contents of this article.​