By Aaron Gadiel, Partner

The Land and Environment Court last week (13 July 2023) handed down a significant decision on the legal effect of concept development consents.  The decision should reduce the scope for local councils to ‘wind-back’ aspects of a concept development consent — when assessing a detailed development application.

What is a concept development consent?

A concept development application is a development application that:

• sets out concept proposals for the development of a site (which may include detailed proposals for the first stage of development); and
• for which detailed proposals for the site (or part of the site) are to be the subject of subsequent development applications.

A concept development consent approves (at least) concept proposals.

The approval of these concept proposals sets the parameters for the determination of any further development application in respect of a site.  The idea is to ‘lock in’ a concept for a proposed development, but still allow detailed plans for each subsequent stage of the development to be submitted subsequently— in ‘detailed’ development application(s).

While a concept development consent for a site remains in force, the determination of any further development application in respect of the site cannot be inconsistent with the concept development consent — as per section 4.24(2) of the Environmental Planning and Assessment Act 1979 (the EP&A Act).

Concept development consents may be modified, provided that the ‘substantially the same’ test is met.

It is commonplace that a concept development consent may approve something as simple as building envelopes.

Concept development applications are commonplace in the City of Sydney —  where they are often called ‘stage 1’ development applications.  In the City of Sydney, a subsequent ‘detailed’ development application is often called a ‘stage 2’ application.

The problem with concept development consents

Concept development consents were originally sold (by the government) to developers on the basis that they would be a quick and easy way to get in-principle approval for a basic idea — without going through all the detailed (and costly) work for a detailed development application.

In practice, it has not turned out like that.

Firstly, local councils (with the help of the courts) generally insist on a large body of detailed information being prepared and submitted with concept development applications.  For example — even when only building envelopes are to be approved — most local councils will expect developers to submit a ‘reference’ or ‘proof-of-concept’ architectural scheme.  Such a scheme must demonstrate the building envelope is capable of containing a building with acceptable amenity and impacts.

Many developers have told us that if they are going to have to design the building anyhow, they would rather proceed directly to a detailed development application.

Secondly, the assessment time for concept development applications is generally around the same as for detailed development applications.  If a concept development application is lodged — followed by a detailed development application —the time that a developer needs to allow for resolution of the planning approval is effectively doubled.

Thirdly, some local councils have deliberately structured their local environmental plans to force developers to obtain concept development consents, before lodging detailed development applications.  For example, in the City of Sydney, a concept development consent is normally essential whenever a competitive design process is to be undertaken.

Developers will rarely freely choose to pursue a concept development consent first.  When they end up doing so, it is usually because of some planning rule that limits access to height or floor space in the absence of a concept development consent.

In a subdivision context, a concept development consent can sometimes be a way of getting a local council to approve bulk earthworks for a whole site.  This is because the council may want to lock-in some in-principle commitments as to the ultimate land uses and street/block layout before signing-off on the earthworks.

Finally, local councils have often sought to limit what concept development consents actually approve.  This may be done by only listing a limited range of the developer’s documentation in the approval condition of the consent. It may also be done by condition.  For example, the City of Sydney will routinely impose a condition affirming that no particular amount of floor space has been approved.

Nonetheless, the Chief Judge of the Land and Environment Court, Justice Preston, has said:

• If the concept proposals for the development of the site are building envelopes, any development consent to those building envelopes will fix the envelope within which any building can be erected.
• Any further development application could not seek consent to erect a building that would be inconsistent with the building envelope approved by the consent granted on the determination of the concept development application.
• A building could be inconsistent if it exceeds the approved building envelope, but equally, it could be inconsistent if it is less than the approved building envelope. For example, a building of 20-storeys is inconsistent with an approved building envelope of 15-storeys, but so too, a building of 10-storeys is inconsistent with an approved building envelope of 15-storeys.

(The Uniting Church in Australia Property Trust (NSW) v Parramatta City Council [2018] NSWLEC 158 at [44].)

The new Court decision— no clause 4.6 request needed

On 13 July 2023, the Land and Environment Court handed down its decision in Karimbla Properties (No. 59) Pty Limited v City of Parramatta Council [2023] NSWLEC 1365.  Mills Oakley represented the development applicant.

The proceedings related to a site that already had the benefit of a concept development consent for a 30-storey mixed use tower building, with a four-storey basement.  The concept development consent comprised four levels of basement car parking, two commercial levels, and 28 residential levels.

The development applicant sought to modify the concept development consent and secure the grant of development consents for two detailed development applications (one for early works and one for the main building).

The existing concept development consent was granted by the Sydney Central City Planning Panel.  This consent had approved a building envelope that exceeded the 72-metre building height development standard (on the strength of a ‘clause 4.6’ request).  The approved envelope was for a maximum height of 95.67 metres (a 32.9 per cent variation).

The development applicant sought to increase the height of the building by a further 4.23 metres to 99.9 metres.  The proposed increase in height did not change the number of storeys.  It was a result of an adjustment for floor-to-ceiling heights and the provision of a lift overrun.

The Court approved a modification application that altered the approved envelope — finding that the ‘substantially the same’ test was satisfied.

When the Court came to the detailed development application for the building, the Court had to consider whether a ‘clause 4.6’ request — to vary the height standard to the 72-metre building height development standard —  was required.  The development applicant had provided such a ‘clause 4.6’ request, but argued that the Court did not need to deal with it.

The Court accepted the development applicant’s submission that a written request to vary a development standard is not required for a subsequent development application — following a concept approval for a building envelope that already envisages that the standard will be breached.

The Court said that the determination of a subsequent development application for the detailed proposal of a site cannot be inconsistent with the concept development consent under section 4.24(2) of the EPA Act.

This made it unnecessary to deal with and uphold a further ‘clause 4.6’ request on building height.

This decision reduces the risk that a developer faces when seeking to act on a concept development consent that approves a building envelope that is contrary to current development standards.  Based on this Court decision, a developer will, at least in some circumstances, no longer need to run-the-gauntlet of a ‘clause 4.6’ request as part of the detailed development application.

Of course, developers (and their consultant town planners) must examine the terms of their concept development consent closely — and any development standard that may be overridden — before deciding that a clause 4.6 request is not required in a particular case.  If needed, legal advice should be sought.

The new Court decision —  car parking

There is another aspect to this latest Court decision that is worth noting.

The local council had argued that the proposal must be refused because:

• the floor space ratio exceeds the maximum floor space ratio permitted; and
• a variation to the floor space ratio development standard is not permitted (due to a locality-specific restriction on the application of ‘clause 4.6’).

The alleged contravention of the floor space ratio control arose solely because of the extent of car parking provided for in the detailed development application for the main building.

The development control plan’s car parking provisions had changed in between the granting of the concept development consent and the preparation of the detailed development applications.

The Court found that the concept development consent had given concept approval for 299 car parking spaces.  The detailed development applications sought to provide for 299 spaces.  However, the table in the current development control plan set a maximum car parking number of 221 spaces.

Under the ‘standard instrument’ definition of gross floor area (used in all modern local environmental plans), ‘gross floor area’ is defined to exclude ‘car parking to meet any requirements of the consent authority’.

Normally, local councils will argue that any car parking provided above a development control plan maximum is not car parking that meets the ‘requirements’ of a consent authority.  The local council made this argument in the present case.

However, the Court said that where a concept development consent had been granted by a consent authority (in this case, the Sydney Central City Planning Panel), the ‘requirements’ of the consent authority were not those set out in the development control plan, but those set out in the concept plan development consent.  That is, the requirements were 299 car parking spaces, as per the concept development consent.  The detailed development application for the building met that requirement.  There was, therefore, no exceedance in floor space ratio.

The Court also applied section 4.24(2) of the EP&A Act again, to say that the development control plan’s provisions on car parking rates do not apply.  This is because, if those rates were to be applied, it would result in the determination of a development application inconsistently with the concept development consent.

The bottom line

This is a welcome judgment that clears up some of the long-standing uncertainties with the concept development consent regime.

It should reduce the scope for local councils to ‘wind-back’ aspects of a concept development consent when assessing a detailed development application.