By Aaron Gadiel, Partner

Last Friday (15 September 2023), the NSW Government published changes to the well-known ‘clause 4.6’ provision —  the procedural tool that allows developers to contravene development standards.  This is the first substantive change to clause 4.6 since its initial roll-out in 2008.

The changes are set out in :

• the Standard Instrument (Local Environmental Plans) Amendment (Exceptions to Development Standards) Order 2023;
• the State Environmental Planning Policy Amendment (Exceptions to Development Standards) 2023; and
• the Environmental Planning and Assessment Amendment (Exceptions to Development Standards) Regulation 2023.

The changes come into effect on 1 November 2023.

For most developments, the changes will have no substantive consequence — other than in the way that clause 4.6 requests are presented.

For a small number of development proposals — that may have had difficulty in demonstrating consistency with development standard objectives —  the changes may offer a new chance of having a clause 4.6 request approved.

The status-quo

A ‘clause 4.6 request’ is a request to carry out a development (proposed in a development application) in a way that contravenes a development standard set out in an ‘environmental planning instrument’.

Local environmental plans (LEPs) and state environmental planning policies (SEPPs) are types of ‘environmental planning instruments’.

The legal mechanism is set out in clause 4.6 of all standard-instrument-compliant LEPs.  Hence its name.  The provision generally appears (sometimes with different labelling) in other LEPs and precinct-specific SEPPs.

At present, the request must seek to justify a contravention of the development standard by demonstrating both:

• that compliance with the development standard is unreasonable or unnecessary in the circumstances of the case; and
• that there are sufficient environmental planning grounds to justify contravening the development standard.

Typically, the most common way for the ‘unreasonable or unnecessary’ requirement to be satisfied is to demonstrate that the objectives of the standard are achieved, despite the non-compliance with the standard.  This is the first of five potential methods nominated in the Land and Environment Court’s seminal decision of Wehbe v Pittwater Council [2007] NSWLEC 827.

At present, for a consent authority to approve a clause 4.6 request, the consent authority must be satisfied that:

• the request has adequately addressed the two requirements outlined above; and
• the proposed development will be in the ‘public interest’ because it is consistent with:
  • the objectives of the particular standard; and
  • the objectives for development within the zone in which the development is proposed to be carried out.

This means that if the consent authority is not satisfied as to the above matters, a development consent could not be lawfully granted on the strength of a clause 4.6 request. (If a development application is the subject of a merit appeal to the Land and Environment Court, the Court would stand in the shoes of the consent authority and could be satisfied in its place.)

Clause 4.6 is not available to vary outright prohibitions.  Additionally, some LEPs and SEPPs contain provisions that prevent or limit clause 4.6 from being used for some development standards.  (This is perverse! Such exclusions have the effect that a development standard must be strictly applied, even when it the standard is unreasonable or unnecessary.)

There is also presently a notional requirement to obtain a concurrence from the Secretary of the Department of Planning and Environment.  However, arrangements are in place to allow this concurrence to be ‘assumed’ in most circumstances. (So, in practice, the Department is rarely involved in clause 4.6 variations when a local council is a consent authority.)

The changes

The changes are modest in scale.

The two key tests which typically govern whether a clause 4.6 request is upheld or refused will essentially remain the same.

That is, development consent will not be able to be granted to development that contravenes a development standard unless the consent authority is satisfied the applicant has demonstrated that:

• compliance with the development standard is unreasonable or unnecessary in the circumstances; and
• there are sufficient environmental planning grounds to justify the contravention of the development standard.

However, the legal language has been tidied-up a bit.  Going forward — where a clause 4.6 request itself does not contain all the information needed for a consent authority to reach the above conclusion — the consent authority is permitted to take into consideration other evidence brought forward by the applicant.  This will be helpful when an applicant wants to supplement an alleged deficiency in a clause 4.6 by extra material at a panel meeting or by way of evidence in a merit appeal in the Land and Environment Court.

The further ‘public interest’ test will be abolished.  At present, to pass this test there must be a conclusion that the proposed development will be consistent with:

• the objectives of the particular standard; and
• the relevant zone objectives.

On most occasions, the abolition of the ‘public interest’ test will not make any practical difference.  This is because, as explained earlier, the most common way for the ‘unreasonable or unnecessary’ requirement to be met is to demonstrate that the objectives of the standard are achieved, despite the non-compliance with the standard.

For most proposed contraventions, the standard’s objectives are already said to be satisfied.  In such circumstances ‘public interest’ test did not add anything, other than a requirement that the development be consistent with the relevant zone objectives.  Consistency with the zone objectives is rarely in an issue.

However, the abolition of the ‘public interest’ requirement does increase the possibility that alternative methods of satisfying the ’unreasonable or unnecessary’ test — as set out in the Land and Environment Court’s decision in Wehbe — will be accepted.

Since the roll-out of clause 4.6, in the main, the alternative grounds in Wehbe have fallen into disuse.  (Wehbe was originally decided on the old SEPP 1, which pre-dated clause 4.6.)

This is because, until now, every clause 4.6 request has needed to demonstrate consistency with a development standard’s objectives (under the ‘public interest’ test)for the request to be upheld.

This meant that, almost by definition, a developer would always have to satisfy the first method in Wehbe in any event (that is, the objectives of the development standard are achieved, despite the non-compliance).

If the first method has to be satisfied anyhow there is often little point to addressing other alternative methods of meeting the ‘unreasonable or unnecessary’ requirement.

However, now that the ‘public interest’ component of the test will be scrapped, it will no longer necessary that every clause 4.6 request demonstrate consistency with the objectives of the development standard.

It means that, in appropriate circumstances, where a contravening development does not meet the objectives of a development standard — it may still be possible to uphold the clause 4.6 request — if the ‘unreasonable or unnecessary’ requirement is satisfied by one of the following alternative Wehbe tests:

• Establishing that the underlying objective or purpose is not relevant to the development with the consequence that compliance is unnecessary.
• Establishing that the underlying objective or purpose would be defeated or thwarted if compliance was required with the consequence that compliance is unreasonable.
• Establishing that the development standard has been virtually abandoned or destroyed by the consent authority’s own actions in granting consents departing from the standard — and hence compliance with the standard is unnecessary and unreasonable.
• Establishing that the zoning of particular land was unreasonable or inappropriate so that a development standard appropriate for that zoning was also unreasonable or unnecessary — and that compliance with the standard, in that case, would also be unreasonable or unnecessary.

The (mostly notional) requirement that the concurrence of the Secretary of the Department of Planning and Environment be obtained has also been abolished.  This will make no practical difference in the great bulk of cases (as concurrence is normally ‘assumed’ in any event).

The new text of clause 4.6 will no longer refer to a ‘written request’ to contravene a development standard.  However, a written request to contravene a development standard  must still accompany a development application under a new provision to be inserted into the Environmental Planning and Assessment Regulation 2021 (section 35B).

Transitional arrangements

The new changes do not apply to development applications that are lodged, but not determined before 1 November 2023.  (This is set out in a variety of different savings provisions, including clause 8(1) of the Standard Instrument (Local Environmental Plans) Order 2006).

Bottom line

In short, the changes to clause 4.6 are, for most developments, of no real significance.

There is a material improvement for the small number of developments that:

• cannot demonstrate consistency/achievement of the objectives of the development standard;
• can, nonetheless, satisfy the ‘unreasonable or unnecessary’ requirement by some alternative means, including the alternative methods set in the Wehbe decision; and
• can also demonstrate that there are sufficient environmental planning grounds to justify the contravention.