COVID-19 does not (yet) stop the ‘clock’ on lapsing on development consents or the expiry of appeal rights

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By Anthony Whealy, Partner, Ben Salon, Associate and James Oldknow, Lawyer

Whilst developers in NSW have embraced the State Government’s (long-awaited) announcement for a “Planning System Acceleration Program” and various Ministerial Orders for extended days and operating hours in response to the COVID-19 pandemic, we remind all of our contacts that now is not the time to be complacent. Instead, we are strongly encouraging developers to continue to be vigilant with their projects as the ‘clock’ has not stopped ticking toward the lapsing of development consents or the expiry of appeal rights on development applications.

On lapsing of consents however, history may well repeat itself. In May 2010, to aid financial recovery at the tail end of the Global Financial Crisis, the NSW Parliament amended the Environmental Planning and Assessment Act 1979 (NSW) (the ‘Act’) by inserting provisions that had the effect on existing development consents of extending the (then) usual 2 year lapsing period, to the maximum 5 years allowable under the Act.

For the current pandemic though, we are yet to see similar intervention although it may be that lapsing and activation of consents will be examined when Parliament resumes on 12 May 2020, so keep watching this space. In the mean time, it seems reasonably clear to us that peak industry bodies should be lobbying for such a change to be made, to reflect the general financial and practical hardships of the NSW and Australian population, which are only likely to worsen if building start times are delayed or if ‘shovel ready’ projects in the current development pipeline are lost by overlooking stringent legal timeframes. Introducing an immediate but perhaps temporary extension of the lapsing of development consents and the expiry of appeal rights on development applications in the order of 12 months would go a long way in our view to achieving the Department of Planning, Industry and Environment’s goal to support “productivity, investment and jobs during COVID-19”.

Of course we will keep our mailing and social lists updated if such changes are introduced. For the meantime though, or in the event that those changes do not arrive, we have prepared the following refresher in relation to the current legal timeframes for development projects in NSW and we encourage you to take a read.

Lapsing of Development Consents

In most cases under the Act, a development consent will lapse five years after the date from which it operates. However, it is open to the consent authority under the Act to specify a shorter period of time for a development consent to lapse when it grants that consent, except in the case of concept development applications.

The Act also provides that development consents do not lapse if building, engineering or construction work relating to the consent has physically commenced before the lapsing date, or if the use of the land, building or work the subject of the consent has actually commenced before the lapsing date.

In some cases, a development consent can be subject to a deferred commencement condition which must be satisfied before the consent operates. In such a case, the Act provides that to prevent the consent for lapsing, the requirements of the deferred commencement condition must be satisfied within 5 years from grant of consent, or a shorter period if specified by the consent authority (often a much shorter period is specified, sometimes for example, a period of only 6 months).

If you have received consent to a development in the last 5 years and have not activated that consent (through physical commencement, or the use of the land, building or work the subject of the consent), or satisfaction of any deferred commencement conditions, then you should check the notice of determination now and ascertain the lapsing date. The date on which the consent will lapse is required by the Environmental Planning and Assessment Regulation 2000 (NSW) (the ‘Regulations’) to be stated in the notice of determination.

If the lapsing date is 5 years after the date the consent was granted, then there is simply no way to extend the date the development consent will lapse. Such a consent can only be preserved by physical commencement or use prior to the lapsing date specified in the consent. Similarly, if the consent is subject to any deferred commencement conditions, those conditions must be satisfied before the date specified in the consent. If you’ve satisfied deferred consent conditions, you should also check your consent now and ascertain the lapsing date for the now operational consent.

If the consent authority has specified a period shorter than 5 years in which the consent will lapse, then the Act provides that an application may be made to extend the lapsing date by 1 year. The Act also provides that a decision on such an application may be appealed within 6 months if the applicant is dissatisfied with the decision or the consent authority fails to determine the extension application within 40 days. Generally these applications are by way of a simple letter to the Council, but the application must show good cause.

If you have a consent that will lapse at any time this year and need advice on preserving the consent by physical commencement or use or making an application to extend the lapsing date where available, we are available to assist and it would be prudent to act as soon as possible given the difficulties arising due to the COVID-19 pandemic.

We often prepare detailed letters to councils on behalf of development proponents to detail how and why a consent has been activated. As part of that process, we advise on what is the minimal amount of work that can be undertaken on site in order to prevent  consent from lapsing. Often that can be achieved even prior to the first construction certificate being issued. Please contact us if you want advice in that regard on your specific DA.

Expiry of Appeal Rights on Determinations or Refusals of Development applications

Pursuant to the Act, a developer may lodge an appeal with Land and Environment Court (‘Court’) in respect of their development application (Class 1) in the following circumstances:

  1. within 6 months after an actual determination by the consent authority (e.g. Council); or
  2. within 6 months after a deemed refusal by the consent authority.

These are known as a developer’s ‘appeal rights’.

For reference, an ‘actual’ determination presents itself in the physical form of a Notice of Determination issued by the consent authority refusing a development application or approving it subject to conditions. Whereas a ‘deemed’ refusal occurs (figuratively) when the consent authority fails to determine a development application within a specific time and as a result, is automatically taken to have refused the development application for the purposes of starting the 6 month appeal rights ‘clock’. In respect of most development applications, a deemed refusal occurs after 40 days. However, there are some instances in which the clock can be temporarily stopped/re-started by a consent authority – although this is a topic for a separate article.

The Act currently makes no provision for an out of time application for an appeal of an application for development consent or the determination of a development application. This means in the case of an actual determination, there is no way to re-enliven a developer’s appeal rights once the
6 month time limit has passed. Where Council has not made a decision and a developer’s appeal rights arise on a deemed refusal, it may be possible to re-enliven those appeal rights by way of an amendment to the development application.

The purpose of this article is to remind you of the significance of the 6 month appeal rights clock having regard to the current COVID-19 pandemic because, at least for the moment, the clock is immune and is not infected by the virus.

From a practical standpoint, if your development application:

  • has been refused by a consent authority, you may wish to consider lodging a Court appeal within 6 months;
  • is currently sitting with Council staff for assessment and is not being dealt with (or looking like it will be dealt with) any time soon, you may wish to consider a Court appeal based on a deemed refusal; or
  • or has been approved but you are dissatisfied with any of the conditions of the consent, you may wish to consider a Court appeal of those conditions.

You shouldn’t be missing out on your opportunity for a Court appeal.

What Now?

These certainly are unusual times. However, with the clock still currently ticking toward the lapsing of development consents and expiry of appeal rights on determinations or deemed refusals of development applications, it is important to consider your options amidst the COVID-19 pandemic.

At present, the Land and Environment Court is open for business and is full steam ahead, albeit with some slight adjustments to procedure. If you are considering acting on your developer’s appeal rights and need preliminary advice, or if you are ready to lodge an appeal, then we are able to assist.

We are also able to look at the individual circumstances of your development project and advise on the activation of your existing consent to ensure it does not lapse.

Whilst we are supportive of the State Government intervening to enact some relief on these issues, the reality is we can not be sure if or when this will occur. If you have any questions regarding any aspect of this article, please feel free to get in touch.

 

For further information, please do not hesitate to contact us.

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