New legal test when a competitive design process is required

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By Aaron Gadiel, Partner

A new court decision will make it more difficult to revise development proposals following a mandatory architectural design competition.

The disputed clause

In Toga Penrith Developments Pty Limited v Penrith City Council [2022] NSWLEC 117, the Chief Judge of the Land and Environment Court (Preston CJ) considered a clause in a local environment plan that said:

Development consent must not be granted for any of the following development … unless an architectural design competition has been held in relation to the development (bold added) …

An ‘architectural design competition’ was defined to mean a competitive process conducted in accordance with procedures approved by the NSW Government.

The issue was whether the proposed development scheme — which had been revised since the architectural design competition had taken place — was unable to be approved because of the above clause.

The extent of permitted amendments

It is commonplace for designs that are the outcome of an architectural design competition to be refined and further developed before a detailed development application is submitted.  It is also common for the design to be further amended in the development application assessment process — in response to the feedback from the local council and public submissions.

A key question that arose in these proceedings is what, if any, were the extent of the amendments that were to be permitted (before a new architectural design competition had to be held).

The Court said that the above clause means that development consent cannot be granted to a development unless an architectural design competition has been held in relation to that development.

This is an objective test.  It means that even if the consent authority thinks that the development is the same as an earlier development (that was subject to an architectural design competition), if there is a legal challenge, the Court will decide whether this is true.

The Court said that it may be accepted that ‘questions of fact and degree’ do arise in determining whether the test imposed by the clause is satisfied.  This essentially means that some fine judgment may be required in particular cases.

The Court explained that some differences between the development in relation to which the architectural design competition has been held and the development for which development consent is sought might not prevent development consent being granted, but other differences might do so.

The Court said that whether the clause prevents the grant of development consent will depend on the nature, extent and other features of the differences in the developments.  If there are substantial differences between the two developments, the clause will not be satisfied.

In short, the clause requires the development the subject of the development application to be ‘the same or substantially the same’ as the development that is the product of the architectural design competition.

Broader implications

The above clause appeared in Penrith Local Environmental Plan 2010.  However, similar clauses appear in other environmental planning instruments.  For example, Sydney Local Environmental Plan 2012 has a clause that says:

development consent must not be granted to the following development … unless a competitive design process has been held in relation to the proposed development

We consider that the legal principle now identified by the Chief Judge will also apply to this clause and other clauses in materially the same terms.

As a consequence, where such a clause applies, it is likely that, going forward, there will be less flexibility available to a developer to adjust a development proposal that emerges as the winning design from a competitive design process.

This may create problems where the winning design has failed to address practical problems with the site, planning controls or construction methodology.  It may also limit the flexibility of a developer to respond to a consent authority’s concerns during the assessment process.

Managing the problem

However, there are ways a developer could seek to manage this problem.

One way is to have a new competitive design process.

Another way may be to check if there is a capacity under the relevant environmental planning instrument to secure a waiver from a requirement for a competitive design process.  For example, Sydney Local Environmental Plan 2012 has a provision in it that allows for the process to be waived by the consent authority (or the Court in a merit appeal) if such a process would be unreasonable or unnecessary in the circumstances.  We consider that this might be the case if, for example (in an appropriate case), the proposed scheme has been adjusted to respond to concerns raised by the consent authority.

In short, this decision has identified a new procedural barrier that may need to be overcome when adjusting development proposals following a competitive design process.  It will likely contribute to a further ‘legalisation’ of the development assessment process and may create an additional need to seek legal advice during the course of the process.

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

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