By Anthony Whealy, Partner and James Oldknow, Special Counsel

A recent decision by the Land and Environment Court of NSW (‘Court’) has (re)clarified the approach to be taken by a consent authority when assessing a development application (‘DA’) that is compliant with key development standards within the applicable Local Environmental Plan (‘LEP’).

In those circumstances, a consent authority must assume that the objectives of those development standards have been met, including (in this case) any objectives that relate to the “desired future character” of a site (particularly in the absence of an applicable site specific desired future character statement).

This decision should add a level of certainty and comfort for developers and consultants when designing ‘compliant’ DAs because it cannot then be argued that a proposed development is somehow unacceptable by returning to the objectives of those standards. In simple terms, developers and consultants should now expect that numerical compliance with key development standards in LEPs is enough to receive a ‘tick’ during the assessment process in respect of the corresponding objectives of those standards.

In Gunnamatta Bay Holdings Pty Ltd v Sutherland Shire Council [2025] NSWLEC 1230 (‘Gunnamatta Bay Holdings’), a case in which we acted for the developer of the site, the Senior Commissioner of the Land and Environment Court confirmed at [139], that the Court has made it clear:

“when a development has fulfilled all relevant controls in the [applicable LEP], there must be an expectation that it has achieved the objectives of the controls – including the “desired future character” for that site.”

(our emphasis)

This decision seriously calls into question the mantra we so often hear from councils that land zoning, and LEP controls (such as height and FSR) are “a maximum, not an entitlement”, an idea that obviously feeds the doubt and uncertainty so prevalent in the NSW planning system.

The proposal in Gunnamatta Bay Holdings was to demolish 2 existing dwelling houses to facilitate construction of a ‘multi-dwelling housing’ development (containing 7 townhouses), a permitted use on the approx. 5,000m2 waterfront site. The development was compliant with all key development standards in the applicable LEP, including Height, FSR and Landscaped Area. In fact, the proposal comfortably complied with the applicable FSR development standard of 0.55:1, realising an FSR of only 0.375:1. The Council nevertheless argued that the proposal was an overdevelopment of the site.

Notwithstanding compliance with those key metrics, the proposal was strenuously opposed by the local council, including on the basis that such compliance, of itself, should not lead to the granting of development consent and that it was at odds with the built form in the immediate vicinity and the desired neighbourhood character of the relevant R2 Low Density Residential zone.

In granting consent to the LEP compliant proposal, the Court held at [5] that the development had appropriately responded to “the planning framework and the residential environment in the immediate area of the site now and as anticipated.”

We observe that the approach taken by the Senior Commissioner in Gunnamatta Bay Holdings is squarely consistent with the rationale set out by the Chief Judge in Wehbe v Pittwater Council [2007] NSWLEC 827 at [43], a decision that has been routinely cited for nearly 20 years.  Here, the Chief Judge explained the proper construction of development standards, including in respect of their numerical and objective components:

“The rationale is that development standards are not ends in themselves but means of achieving ends. The ends are environmental or planning objectives. Compliance with a development standard is fixed as the usual means by which the relevant environmental or planning objective is able to be achieved.”

(our emphasis)

We further observe that the Court has adopted the same approach to numerical controls that are contained within Development Control Plans (DCPs). For example, in Hillcrest Rose Bay Pty Ltd v Woollahra Municipal Council [2021] NSWLEC 1662, the Court observed at [80]:

“There is a general presumption that, where a development control plan stipulates numeric controls that have specific objectives, the objectives are met if the proposed development meets those numeric controls.”

(our emphasis)

Of course, when it comes to DCPs, the Act itself specifies point blank that once numerical compliance is achieved (for example with a numerical setback control, or overshadowing duration control), the council cannot press for anything more onerous than compliance (s4.15(3A)(a)).

Having regard to the Court’s longstanding position summarised above and the fact that there is already so much uncertainty and delay in the NSW planning system, it is disappointing that local councils and some planning panels routinely assert that DAs which ‘fully comply’ with the applicable LEP development standards are nevertheless an overdevelopment and out of character for their site, or even (as was the case here) that a permissible landuse should not be approved, despite the zoning allowing that landuse in the zone.

Such assertions were perhaps previously justifiable based on the conservative findings in Rebel MH Neutral Bay Pty Ltd v North Sydney Council [2018] NSWLEC 191In that case, although it was initially agreed at [24] that the key development standards in an applicable LEP have the effect of defining a building envelope capable of being granted development consent (consistent with the body of case law summarised out above), the Court found that “such a building envelope is a maximum and not an entitlement.” For our part, we never quite understood how that proposition was correct when in that case (where we represented the developer), the envelope the Court referenced was in fact a DCP side setback control, and as stated above, strict compliance with a DCP standard was in fact an entitlement, given that s4.15(3A((a) of the Act states that a council may not require anything more onerous than compliance.

In any event, the recent decision in Gunnamatta Bay Holdings is clearly a new emphatic and common-sense rebuff to such assertions. This is most obvious from paragraph [100] of the decision, where the Court observed that:

“Typically, overdevelopment is levelled at development that exceeds the planning controls or that is significantly greater in scale than the surrounding development or has significant amenity impacts on the surrounding properties or within the development itself.”

(our emphasis)

Even then, not all development that seeks to exceed key development standards within an LEP should be cast as a typical example of overdevelopment, noting that it’s possible (and regularly supported by the Court), for dispensation to be granted pursuant to cl 4.6 of a LEP for a proposal to exceed any development standard. That is because the Court has also held that “[p]lanning is not other than orderly simply because there is reliance on cl 4.6 for an appropriate planning outcome” (see: SJD DB2 Pty Ltd v Woollahra Municipal Council [2020] NSWLEC 1112 at [73].

Overall, and as stated at the outset, this recent decision should add a level of certainty and comfort for those designing ‘compliant’ DAs, noting that, as always, it iis still possible (and appropriate in many circumstances) for those willing to take more risk in the assessment process to exceed key development standards within a LEP pursuant to  the power in cl.4.6.

We would however caution that there will of course be instances where the impacts of a compliant development are sufficiently severe to warrant refusal, for example this may be the case in terms of view loss or heritage impacts. We do not suggest that compliance equals automatic approval. Certainly however, in the absence of acute, identifiable impacts, it will be much more difficult for councils or planning panels to refuse compliant developments based on vague notions of whether zone objectives are met, or based on arguments about ‘character’.

Need further assistance?

If you need further assistance with your development (or modification) application, we are ready and able to assist. We are very regularly asked to provide our opinion in response to preliminary and final assessments of development applications by local councils and various planning panels to determine if matters are suitable to appeal to the Court.