In brief

This end of year article focuses on several cases from 2023, that have given added definition to the types of jurisdictional issues that will go to the validity of development decisions and those which will not. These court decisions have brought nuance to the types of jurisdictional issues that exist. This is important given the long list of jurisdictional issues parties to disputes involving development have been required to address in proceedings before the New South Wales Land and Environment Court (NSW LEC). 

In this article we also provide a summary of the successful challenges to Registrar’s decisions in the NSW LEC and the New South Wales Environment Protection Authority’s (NSW EPA) Climate Change Policy and Climate Change Action Plan 2023-2026 released this year.

To conclude, we comment on the outlook for 2024 in the current climate where there are daily newspaper articles about the need for housing in NSW and what impact that will have on NSW planning and environment law into next year. 

'Jurisdictional facts'

Since the decision in Al Maha Pty Ltd v Huajun Investments Pty Ltd [2018] NSWCA 245 (Huajun) and HP Subsidiary Pty Ltd v City of Parramatta Council [2020] NSWLEC 135, there has been greater scrutiny in development appeals to ensure the satisfaction of each provision that requires something to occur before a consent authority has the power to grant development consent. These provisions are often expressed as: "Development consent must not be granted unless...", or "The consent authority must consider... before granting development consent". 

Preston CJ’s comments at [217] of Huajun in the NSW Court of Appeal, differentiating between conditions on the exercise of power, and conditions to the exercise of power, are insightful to proceedings in the NSW LEC:

"The requirement to consider relevant matters is a condition on the exercise of the power to determine a development application, but it is not a condition to the exercise of the power in the first place. The check on jurisdiction required by s 34(3) [of the Land and Environment Court Act 1979] is that the decision could have been made in the proper exercise of the relevant power, that is to say, that there is power to make the decision, not on how the power, if it can be exercised, should be exercised." (emphasis added) 

Since these cases, parties have been actively providing jurisdictional statements to the NSW LEC along with section 34 agreements so that the Court can be sure that the grant of development consent following a successful section 34 conciliation conference is "a decision that the Court could have made in the proper exercise of its functions": section 34(3) Land and Environment Court Act 1979 (NSW) (LEC Act).

In our 2022 Year in Review article, we considered the Court of Appeal’s judgment in Ross v Lane [2022] NSWCA 235 (Ross). The Court of Appeal in that case held that where the application of a provision in an environmental planning instrument depends on the formation of an opinion, it is the consent authority, not the Court, which conclusively determines whether the provision is engaged. The particular provision in that case was the clause within State Environmental Planning Policy No 65 - Design Quality of Residential Apartment Development (SEPP 65) which set out when SEPP 65 was to apply, including that SEPP 65 applies to development involving "the substantial redevelopment...of an existing building". The Court of Appeal found that the question of whether the development involved the "substantial redevelopment" of the building was not a jurisdictional fact. 

Since that judgment, we have seen several judgments relating to whether certain provisions involve jurisdictional facts including El Khouri v Gemaveld Pty Ltd [2023] NSWCA 78 (El Khouri), and Lahoud v Willoughby City Council [2023] NSWLEC 117 (Lahoud).

El Khouri v Gemaveld Pty Ltd [2023] NSWCA 78

In El Khouri, the Court of Appeal dismissed an application for judicial review of a NSW LEC decision where development consent was granted following a successful section 34 conciliation conference for a proposed residential development in Blakehurst. 

A significant contention in the proceedings had been compliance with the nine metre height control imposed by the Kogarah Local Environmental Plan 2012 (LEP) (now repealed).

The applicants in the Court of Appeal, who were objectors in the NSW LEC proceedings, appealed on the basis that the height control was later discovered to have been breached, and there had been no request to vary the development standard under clause 4.6 of the Kogarah Local Environmental Plan 2012

Clause 4.6 requests seek to dispense with the requirement to comply with a standard and have been regularly described as a "gateway" to further merit assessment preventing the progression of the proposed development if the gateway is not opened. Therefore, the applicants argued that the NSW LEC could not have decided to grant development consent in the proper exercise of its functions under section 34(3) of the LEC Act.

Critically, although the applicant’s fresh evidence showed that the proposed development exceeded the height control, that was not evident in the documents before the Commissioner in the NSW LEC. 

The Court of Appeal dismissed the amended summons with costs stating at [75]:

"It is plain that the Commissioner had regard to cl 4.3 of the Kogarah LEP. He expressly formed the only view that was open to him on the evidence which was available to him, namely, that there was compliance with the height requirement. That decision is not vitiated merely because the applicants can establish, by evidence not made available to the Commissioner, that there was not compliance with that clause." (emphasis added)

Lahoud v Willoughby City Council [2023] NSWLEC 117

Lahoud involved class 4 judicial review proceedings in the NSW LEC relating to a challenge to the grant of development consent by Willougby Local Planning Panel to a development application made by Helm Pty Ltd. The applicant, who was a neighbour to the land the subject of the development consent, alleged that the development consent was invalid on six grounds involving jurisdictional error.

Before the NSW LEC handed down its decision, the NSW LEC invited the parties to make submissions as to whether or not (and, if so, how) Ross and El Khouri, potentially impacted on the approach the NSW LEC was required to adopt to all or any of the grounds pressed by the Applicant. The parties' submissions relating to how Ross and El Khouri apply or do not apply are extensively set out in the judgment from [80].

Ground 1 asserted that the Panel’s clause 4.6 decision relating to contravention of the height control was invalid. The ground failed because while it was clear that the Planning Panel was not satisfied with the clause 4.6 request as it applied to the entire development proposed, section 4.16 of the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act) allows a consent authority to grant approval to only part of the development that had been sought, and that was the power that the Planning Panel exercised in requiring the removal of a portion of the northern end of the development. In doing so, the Planning Panel properly considered the clause 4.6 request and concluded that it was appropriate to grant the dispensation if the northern portion of the development was removed. Interestingly, the NSW LEC reminded that the reasons written by decision making bodies such as planning panels "are not to be examined with an eye attuned to error or with a fine-toothed comb" (at [146]).

Ground 2 related to a challenge involving the active street frontage requirement in clause 6.7 of the LEP. The ground was successful with the NSW LEC concluding that there was "no proper basis in fact on any rational construction of the wording of the clause that could have led the Planning Panel to have concluded that it was satisfied" (at [186]). However, the NSW LEC declined to grant relief for merit related reasons. 

Ground 3 asserted that the development was prohibited because it was not for shop top housing. However, the ground failed because the Court found that there was "no necessity for any vertical linear relationship between any apartment falling within the concept of shop top housing to be directly above any of the ground floor commercial or business premises that provide the anchoring foundation for the permissibility of such a development" (at [218]).

Ground 4 related to a challenge that clause 4.4 of the LEP (which was the FSR development standard) was not achieved and there was no clause 4.6 request. This ground relied on post-determination surveying evidence. The NSW LEC followed El Khouri saying at [251] that to "the extent that the Applicant now seeks to rely on the surveying evidence – evidence which is 'fresh' in the sense that it was not available to the Planning Panel – this approach is inconsistent with what the Court of Appeal has held in El Khouri". 

Grounds 5 and 6 related to an alleged failure to consider contamination under SEPP 65. The Respondent argued that the grounds should be dismissed as they arise from fresh evidence setting out matter not available to the Planning Panel in an El Khouri sense, but that could have been made available to the Planning Panel from the Applicant. However, the NSW LEC rejected the argument because the grounds were advanced on a different basis, being that there was a material error in the Council’s assessment report. That error was the assertion that there would be no excavation on the site arising from the development. While the NSW LEC found that the grounds were made out, the NSW LEC declined to exercise its discretion because, amongst other reasons, there were conditions that dealt with what was to occur if contamination was discovered and there was no credible explanation as to why the Applicant had not raised matters of potential contamination known to him at the time he examined the development application. 

Finally, with respect to El Khouri, the Applicant "respectfully submit[ted] that the decision in El Khouri was plainly wrong in concluding that planning instruments had no force in themselves because nothing in the EPA Act gave them force, as it overlooked the provisions of the Act that lend force to planning instruments otherwise than as s 4.15 factors for consideration, and the binding authority of Hillpalm Pty Ltd v Heavens Door Pty Ltd (2004) 220 CLR 472." Despite this, the NSW LEC noted that it was bound by the decision "to the extent that I consider it applicable to the matters I am required to address and determine arising from each of the ground advance on behalf of the Applicant in these proceedings" (at [90]). Based on the above comments, there may be some more nuanced commentary or findings from the Court of Appeal to come so as to clarify El Khouri. 

Review of Registrar decisions

In this section of this article, we analyse some of the reviews of Registrar decisions that have occurred in 2023. Each of the review decisions below have resulted in the decision of the Registrar being either set aside or amended in some way. 

The power to review a Registrar’s decision is found under rule 49.19 of the Uniform Civil Procedure Rules 2005. These reviews are carried out by a Judge in the NSW LEC.

We have summarised the key decisions below:

  • In CWO Pty Ltd v Muswellbrook Shire Council and Commonwealth of Australia [2023] NSWLEC 37 the Applicant sought to set aside the Registrar’s decision joining the Commonwealth of Australia in class 1 proceedings. While Robson J found that the Commonwealth of Australia should be joined to the proceedings, the joinder was limited to discrete contentions relating to the impact of the proposed development on the Myambat Explosive Ordnance Depot and vice versa. 

  • In Bennett v Ku-ring-gai Council [2023] NSWLEC 6, Robson J heard an application made by the respondent council seeking a review of part of a Registrar’s decision to refuse an application for leave to adduce town planning evidence – an area of expert evidence most cases focus on. Robson J found that the order made by the Registrar should be amended to provide for a single party town planning expert. One of the reasons for the decision was that there was a change in circumstances which the NSW LEC found was sufficient to warrant reconsideration. But balancing the interests of justice between the parties, the Robson J allowed only a single party expert given the applicant’s opposition to an additional expert when there were already two heritage and two landscape architect experts engaged to deal with the question of whether a single tree should be removed. 

  • In Caruana v Central Coast Council [2023] NSWLEC 108 the Applicants were successful in setting aside a Registrar’s decision to refuse leave to amend a class 1 application which involved an amendment to a standard development application to rely on the concept development application provision in section 4.22 of the EPA Act. The review application was neither consented to nor opposed by the respondent council, but the application before the Registrar was consented to by the council. Pain J found that the amendment did not alter the development application in substance, and it was not a "new one". 

NSW EPA Climate Change Policy and Action Plan

In our 2022 Year in Review, we examined the NSW EPA’s Draft Climate Change Policy and Action Plan

This year, the NSW EPA released the Climate Change Policy (Policy) and Climate Change Action Plan 2023-2026 (Action Plan). We conclude this article with a summary of the Policy and Action Plan. 

The Policy outlines the causes and consequences of climate change in NSW. The policy identifies three key objectives:

  1. To maximise the economic, social and environmental wellbeing of NSW in the context of a changing climate and current and emerging international and national policy settings and actions to address climate change.

  2. To reduce greenhouse gas emissions in line with the NSW Government’s net zero targets, which are:

    • a 50% reduction in emissions by 2030, compared to 2005 levels;

    • a 70% reduction in emissions by 2035, compared to 2005 levels; and

    • net zero emissions by 2050.

  3. To make NSW more resilient and adapted to a changing climate.

The Action Plan accompanies the Policy and sets out the specific actions the NSW EPA will take to meet the above objectives, as well as the regulatory actions it will consider over the medium to long term to support the NSW Government’s climate change commitments and policies, including achieving net zero emissions by 2050. 

Both the Policy and Action Plan are supported by three pillars:

"1. Inform and plan: continually improving as we listen, provide support and report
2. Mitigate: reducing greenhouse gas emissions
3. Adapt: adapting and building resilience to a changing climate

The NSW EPA has identified 25 actions that it will both continue and develop, categorised under the three pillars.

Under the first pillar, 'Inform and plan', the NSW EPA identifies three actions it will continue and strengthen, being to monitor and report on the impacts of climate change, to engage and collaborate with climate change experts, and to monitor emerging trends, risks and opportunities surrounding the issue of climate change. The NSW EPA also offers an additional six actions that it will undertake over the next three years. Of note, the Action Plan proposes a partnership between the NSW EPA and the Department of Planning and Environment to ensure climate change is adequately addressed in appropriate conditions in planning approvals, and to require licensees to update their pollution incident response management plans. 

The second pillar, 'Mitigate', identifies five actions that the NSW EPA will continue and strengthen. These actions focus on the implementation of programs to reduce emissions, support renewables, minimise emissions from NSW EPA-licensed onshore gas operators, and regulate climate pollutants. Additionally, the NSW EPA will aim to take new actions including the development of greenhouse gas emission targets, the adoption of climate change mitigation guidance for key sectors, and the progressive implementation of greenhouse gas emission limits on licences for key sectors. The NSW EPA has identified management of non-road diesel emissions at coal mines through the imposition of US EPA Tier 4 emission standards as an early step to achieve its mitigation goals. 

The final pillar, 'Adapt', identifies the NSW EPA’s continued commitment to protect the environment through emergency response and recovery, and ensuring that native forestry climate risks are addressed via the Forest Monitoring and Improvement Program. Beyond these initiatives, the NSW EPA will develop an adaptation and resilience delivery plan, develop and implement environmental resilience programs and initiatives, prepare performance outcomes for key industry sectors, and develop a climate change citizen-science strategy and community education program. 

These actions indicate an increased focus on sector-specific industry regulations. The industries that are specifically addressed in the Policy and Action Plan include building and construction, waste, transport, mining, forestry, metallurgy, agriculture and aviation. As the NSW EPA begins to implement the three pillars, those industries should begin planning now for new conditions relating to monitoring, reporting and performance management focusing on emissions and pollution.

Where to for 2024? 

The NSW Government’s drive to engender more housing supply which has been the subject of many media releases in 2023 will lead to new levers in policy and law encouraging that objective. The legal system will need to respond to these pressures for new development as more decisions are made concerning development issues that are underpinned by the administrative law that planning law sits on, such as those jurisdictional issues mentioned early in this article. 

While the NSW Government is encouraging development to meet housing supply, it is too early to tell whether there will be more applications that are brought before the NSW LEC for determination. However, if the resources of consent authorities such as councils and planning panels and referral and concurrence authorities such as Transport for NSW are inadequate to meet the demand, applicants may pursue determinations through the NSW LEC. 

Recently, Sydney Morning Herald commented "As Minns remarked yesterday (7 December 2023), there was a decade of housing with no infrastructure, and major new infrastructure with little new housing." The NSW Government’s major transport and housing package will need to balance the need for infrastructure and housing in various areas throughout the state. We have already seen decisions to cut well-progressed projects such as the M7/M12 interchange ("spaghetti junction") and to stimulate development in specific areas around public transport. 

Developers will need to have their ears to the ground in 2024 to capitalise on the incentives that are and may become available, and to time and design their development applications so that they are approved swiftly. With that said, the lack of infrastructure in some areas that are ripe for development means that first movers may face more obstacles and need to spend more time and money on development applications to progress development. 

Declaration of interest: Colin Biggers & Paisley acted for the applicants in Caruana v Central Coast Council [2023] NSWLEC 108. The views expressed in this article are solely those of the authors.

This is commentary published by Colin Biggers & Paisley for general information purposes only. This should not be relied on as specific advice. You should seek your own legal and other advice for any question, or for any specific situation or proposal, before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories. © Colin Biggers & Paisley, Australia 2024.

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