Reviving Lapsed Development Applications and Development Approvals under the Sustainable Planning Act (QLD) - Environmental Law

Introduction

It is no secret that the provisions of the Sustainable Planning Act 2009 (Qld) (SPA) can be confusing and complex. There have been many occasions where a misunderstanding of how the provisions operate, or indeed an absence of knowledge about certain sections, has led to development applications lapsing part way through the Integrated Development Assessment System (IDAS) process. Even more frustrating for developers and landowners is the situation where a development proposal is being pursued, with significant time and money being expended on the development, only to find out that the development approval has lapsed due to the expiration of the relevant period (formerly known as the "currency period").

The lapsing provisions within the SPA, both for development applications and development approvals, are a necessary evil. Without such provisions, opportunities may exist to prolong the assessment of development applications for many years, outliving planning instruments and strategic direction, or for a development approval to attach to land and remain dormant for a long time prior to being acted upon. The lapsing provisions are imperative to ensure that:

the applicant for a development application undertakes the required actions within the IDAS process in a timely and efficient way, in order to minimise unnecessary delays; and
development approvals are acted upon shortly after the proposed development has been assessed against the current planning instruments.

However, the provisions can often lead to confusion. If certain actions are not taken within strict timeframes, the development application or development approval can come to an abrupt end, with the only recourse being to re-lodge a new development application (or apply to the Planning and Environment Court for an excusal).

However, the SPA contains provisions within the IDAS process which allow an applicant to revive a development application that has lapsed, but there is only a narrow window of opportunity to exercise those provisions. Traditionally the Planning and Environment Court's excusal power has been used to cure many deficiencies in development applications and approvals, and this power has unarguably been expanded upon commencement of the SPA. Such expansion of the excusal power has seen the Court breathe new life into development approvals that have lapsed, despite the wording of the sections themselves not venturing that far.

This paper will identify the lapsing provisions in the SPA for development applications and development approvals, and set out the available processes to revive applications and approvals that have lapsed. In providing a number of case examples, this paper seeks to identify how the Court's excusal power has expanded and what discretionary factors are relevant when applying to the Court to revive a lapsed development application or development approval.

Lapsing of Development Applications

Under the SPA, there are five situations in which a development application can lapse in the IDAS process, as follows:

failing to take action to make the application a "properly made application";¹
failing to give material to the referral agencies;²
failing to respond to an information request;³
failing to commence public notification; and⁴
failing to provide a notice of compliance to the assessment manager after completion of public notification.⁵

Each of the requirements listed above has timing provisions, requiring the applicant to take the necessary action within a defined period. If such action is not taken within time, the SPA makes it clear that the development application lapses.

Under the repealed Integrated Planning Act 1997 (Qld) (IPA), if an applicant was faced with the consequences of a lapsed development application, it's only recourse was to lodge a fresh development application and commence the IDAS process from the start, or commence proceedings in the Planning and Environment Court seeking an excusal as part of the Court's discretion. However, the SPA has introduced a new process that allows a lapsed development application to be revived and continue through the IDAS process, without the need to apply to the Court.

IDAS Revival of Lapsed Development Applications

The 'IDAS revival process' under the SPA applies to each of the lapsing situations set out above, except for the failure to take action to make the development application a "properly made application". While the lapsing provisions are necessary, this needs to be balanced against minimising accidental lapses due to minor administrative oversights. Accordingly, the SPA allows for a development application to be 'revived' within a reasonable timeframe.

In all IDAS revival situations, the process is the same. It involves two steps:

Step 1 – if a development application has lapsed, the applicant has five business days after lapsing to give the assessment manager written notice that the applicant seeks to revive the lapsed application; and
Step 2 – the applicant must take the necessary action within a further defined period.

In relation to Step 2, the further period within which the application must act is usually five business days. However, the time to commence public notification after providing written notice under Step 1 is ten business days. Also, the time to take the required actions as part of Step 2 may be a different period as agreed between the applicant and the assessment manager.

If the IDAS revival process is followed, the development application is taken not to have lapsed and it will continue through the IDAS process.

While this process allows an applicant to revive a lapsed development application without having to go to Court, it should be noted that the time periods in which the revival steps must be taken are quite tight. It might be thought that if a timing period is accidentally missed by an applicant who is not made aware of the lapsing, then a five business day period in which to give notice seeking to revive the lapsed application is a very short period that could pass by without the applicant noticing. This, however, is the balancing exercise that was obviously undertaken by the legislature in weighing up the need to ensure efficient pursuit of development application whilst also allowing a degree of flexibility to cure accidental lapses.

If a development application lapses and the IDAS revival process is not followed, then the applicant has recourse to the Planning and Environment Court, which is discussed below.

Lapsing of Development Approvals

Section 341 of the SPA identifies when a development approval lapses if the development is not started within a certain time known as the "relevant period" (previously known as the "currency period"). A development approval itself may state a different relevant period to the default ones stated in section 341. If the approval does not expressly set out a different relevant period, then:

to the extent a development approval is for a material change of use (MCU), the approval lapses if the first change of use does not start within four years of the approval taking effect;⁶
to the extent a development approval is for reconfiguring a lot (ROL), the approval lapses if the plan for the reconfiguration is not given to the local government within two years (if operational works are not required) or four years (if operational works are required);⁷ and
to the extent a development approval is for development other than an MCU or ROL, the approval lapses if the development does not substantially start within two years.⁸

It should also be noted that section 341 provides a mechanism whereby the beginning of the relevant periods for approvals for MCU and ROL will 'roll forward' in some circumstances to align with the beginning of any "related approval". This will obviously affect the time to start the first change of use (for an MCU approval) or give the plan for the reconfiguration to the local government (for an ROL approval). Additionally, a relevant period for a development approval can be extended, but such a request must be made before the development approval lapses.⁹

Confusion with Approvals for Material Change of Use

The concept of "material change of use" is one that has caused some confusion amongst inexperienced developers, particularly with respect to the lapsing provisions in section 341. The term was introduced into Queensland planning law with the IPA, and has continued through the SPA.

The important question to consider when examining whether or not an approval for MCU has lapsed is whether or not the "change of use" has occurred within the relevant period. If the change of use has not occurred, then the approval lapses.

It is not sufficient to start, or even substantially complete, construction of the buildings and structures associated with the use. This was made clear by the Court of Appeal in McDonald v Douglas Shire Council.¹⁰ There, a planning consent under predecessor legislation had been granted for a recreational resort and convention centre. Construction work had commenced, but the use of the land as a resort had not commenced within the requisite four years. The Chief Justice observed:

"I do not consider that "the erection of a building" should be regarded as the subject of the approval. Any erection of buildings was simply a step towards fulfilment of the purpose of the approval, which was use of the land as a resort. That use was the real "subject of the approval", not the erection of buildings taken alone. ... In my view the use of land as a resort, being the subject of the approval, not having commenced within the prescribed period, the consent must be taken to have lapsed.¹¹"

A relatively recent example of the confusion surrounding the commencement of use is Flamingo Enterprises Pty Ltd v Sunshine Coast Regional Council¹², which was a decision under the now repealed IPA. That case involved a multi-unit residential development for which an MCU approval had been obtained in February 2005. After commencement of construction, Flamingo Enterprises lodged a second MCU application for an additional two multiple unit dwellings, an extension of the gross floor area for the restaurant, and other incidental changes. A second MCU approval for those aspects was granted in March 2009. The building was largely complete, but was not functioning or occupied, when the currency period for the first MCU approval expired in February 2009. Accordingly, the Council refused to approve a building format plan for the development, as the use had not commenced and no extension had been granted to the currency period of the first MCU approval.

Flamingo Enterprises accepted that the currency period had ended, but argued that because the development was "substantially started" within the four year period, the first MCU approval had not lapsed. Accordingly, Flamingo Enterprises applied to the Court for a declaration that the MCU approval had not lapsed, or alternatively, that the first MCU approval did not lapse until the second MCU approval lapsed.

Judge Wilson SC disagreed with Flamingo Enterprises. The Court held that the primary determinant was the actual change of use, rather than the steps taken in accordance with the development approval including, for example, building work required to make the change of use. Flamingo Enterprises failed to establish that the approved change of use had occurred before the expiration of the currency period, which had not been extended. Accordingly, the carrying out of the MCU would constitute a development offence (in the nature of carrying out assessable development without an effective development permit).

The outcome in the Flamingo Enterprises case may seem unfortunate, however it is for this very reason that the SPA (and previously the IPA) contains a provision allowing a developer to apply to extend the relevant period (or currency period) for a development approval. Failing such an extension, the development approval lapses, and a developer's only recourse is to either re-lodge a development application seeking a new development approval, or apply to the Court for appropriate declarations and orders seeking to revive the lapsed development approval.

Excusal Power of the Planning and Environment Court

Given the difficulties associated with the complex and often arbitrary provisions of the SPA and its predecessor legislation, it is no surprise that applicants, local governments and referral agencies often make mistakes. The consequences for such mistakes can be dire, leading to substantial cost and time delays for the developer. For this reason, the Planning and Environment Court has long had the jurisdiction to excuse mistakes and errors, and deal with such mistakes "in the way the court considers appropriate".

The previous excusal power in section 4.1.5A of the IPA had from time to time been generously construed by the Court to forgive or repair non-compliance with the IPA's provisions. Before its repeal, section 4.1.5A of the IPA provided as follows:

"4.1.5A How court may deal with matters involving substantial compliance

Subsection (2) applies if in a proceeding before the court, the court:
1. finds a requirement of this Act, or another Act in its application to this Act, has not been complied with, or has not been fully complied with; but
2. is satisfied the non-compliance, or partial compliance, has not substantially restricted the opportunity for a person to exercise the rights conferred on the person by this or the other Act.
The court may deal with the matter in the way the court considers appropriate."

On its face, allowing the Court to "deal with the matter in the way the court considers appropriate", conferred a very broad discretion on the Court to address a situation where a development application or development approval lapses. However, towards the end of the IPA's life, the Court of Appeal read down the provision, and much emphasis was placed on whether or not there was "a requirement" of the IPA which had not been complied with.¹³This was precisely the situation in the Flamingo Enterprises case, where an order was sought from the Court excusing the non-compliance with the requirements of the IPA. In line with the Court of Appeal authority, the Court found that it was not a "requirement" under the IPA for a person with an MCU approval to request an extension to the currency period, as that was something entirely within Flamingo Enterprises' own discretion.

Under the IPA, the Court had the power to revive a development application that had lapsed, usually ordering that the development application be remitted back to a certain point in the IDAS process.¹⁴ Applying to the Court to revive a lapsed development application was often successful if the applicant could point to "a requirement" of the IPA that had not been complied with, and if all parties to the proceedings supported the exercise of discretion. However, generally, the Court's power under the IPA did not extend to reviving lapsed development approvals. This was because the IPA did not make it "a requirement" to act on a development approval, as the Court held in Flamingo Enterprises.

Upon the commencement of the SPA, the excusal power in section 440 became unquestionably broader in its application than its predecessor section 4.1.5A of the IPA. Section 440 provides as follows:

"440 How court may deal with matters involving noncompliance

Subsection (2) applies if the court finds a provision of this Act, or another Act in its application to this Act, has not been complied with, or has not been fully complied with.
The court may deal with the matter in the way the court considers appropriate.
To remove any doubt, it is declared that this section applies in relation to a development application that has lapsed or is not a properly made application."

It is important to recognise that the words "a requirement" under section 4.1.5A of the IPA have been replaced with "a provision" in section 440 of the SPA. In this regard, the Explanatory Notes to the Sustainable Planning Bill 2009 clarifies the change as follows:

"The purpose of this clause is to ensure a person's rights to hearings are not compromised on the basis of technicalities concerning processes. The term "provision" is intended to be interpreted broadly and is not limited to circumstances where there is a positive obligation to take a particular action."

It is also important to note that subsection 440(3) states that "this section applies in relation to a development application that has lapsed" (emphasis added). "Development application" is a defined term in the SPA, and is quite separate to "development approval" which is also a defined term. Regardless, the Court has recently held that it has the jurisdiction under the SPA to excuse both lapsed development applications and lapsed development approvals.

Reviving a Lapsed Development Approval

The Planning and Environment Court has exercised its powers under section 440 consistent with a broad interpretation of section 440, and has revived a number of lapsed development approvals since the SPA commenced.¹⁵ The non-compliance that can be pointed to in such cases is either:

the failure to complete the development approved (i.e. start the use under an MCU approval, or provide the plan for the reconfiguration to the local government under an ROL approval); or
the failure to seek an extension of time prior to the lapsing.

It must be recognised that the Court's power to excuse non-compliance is discretionary. That is, the Court will only revive a lapsed development approval if it considers it appropriate to do so, having regard to all the facts and circumstances of the case.

Accordingly, an application to the Court to revive a lapsed development approval must be supported by reasons sufficient enough to persuade the Court to exercise its discretion in favour of the applicant and excuse the non-compliance. Where an applicant can provide adequate explanation for the non-compliance that resulted in the approval lapsing, and where there is no opposition to the application, the Court has generally exercised its discretion to excuse the non-compliance and revive the lapsed approval.

An example of such a case is the matter of Devy v Logan City Council.¹⁶ Devy held an ROL approval which lapsed in August 2009. Both Devy and the Council continued to act as if the approval was still in effect, and indeed the works required under the approval were completed only two months after the date of lapsing. Devy applied to the Court and sought an order excusing the non-compliance. The Council supported the exercises of discretion, and in exercising such discretion to revive the lapsed approval, Judge Rackemann said:

"...the circumstances set out in the affidavit reveal that it was simply a case of an honest mistake which is to be corrected within a reasonable time and in circumstances where the Council has no opposition to the orders being made. In those circumstances, I am prepared to exercise my discretion to make the relevant orders."¹⁷

In the matter of La Spina Trabucco Enterprises Pty Ltd v Moreton Bay Regional Council,¹⁸ the applicant was a builder that was not experienced in development and was not familiar with the lapsing provisions in the SPA. It had purchased land with the benefit of an MCU approval for multi-unit dwellings which it intended to construct. La Spina Trabucco Enterprises had spent considerable time and money engaging architects, engaging engineers, obtaining other approvals to allow the development to proceed, promoting the sales of the units through a website, registering a community titles scheme, and so on. It was the applicant's mistaken belief that it was only necessary to pay the infrastructure contributions within the relevant period in order to preserve the development approval, and the use was not commenced (nor was construction even commenced) when the approval lapsed. In the circumstances, and taking into account the Council's support, Judge Dorney QC exercised the Court's discretion to revive the lapsed approval.

As stated above, the Court's power to excuse non-compliance and revive a lapsed approval is discretionary. From the cases considered by the Court, there appears to be a number of matters that are relevant to the exercise of discretion, including:

the assessment manager's support for, or opposition to, the revival of the development approval;
the explanation for the non-compliance;
the time and cost that has been expended on pursuing the development approved in the approval;
whether it is in the public interest for a new development application to be made;
if a new development application has to be made, the inevitable delays and additional expense that would be incurred; and
whether the interests of other persons not party to the proceeding might be affected.

In relation to this last point, it is noted that the jurisdictional requirement under section 4.1.5A of the IPA (that the Court be satisfied that the opportunity for a person to exercise rights has not been substantially restricted) has been removed from section 440 of the SPA. Nonetheless, such a consideration is still a factor relevant to the exercise of discretion under the SPA.

7.8 In reviewing these cases, it is clear that the legislature's intention to expand the ambit of the Court's excusal power has been reflected in the Court reviving lapsed development approvals. This is especially so where section 440 only refers to "a development application that has lapsed", and the Court is prepared to interpret the provision broadly enough to encompass development approvals that have lapsed. It would be interesting to see the outcome if the Flamingo Enterprises cases was considered under the excusal power in section 440 of the SPA, as opposed to the more restrictive section 4.1.5A of the repealed IPA.

Conclusion

The lapsing provisions in the SPA, both for development applications and development approvals, are necessary. However, they often lead to confusion not only for developers but also for assessment managers.

The SPA recognises that there may be minor administrative oversights in the IDAS process, which can now be 'cured' by notifying the assessment manager of the applicant's intention to revive the application and then taking the necessary action to continue the IDAS process. This 'IDAS revival process' means that the development application is taken not to have lapsed.

However, there is only a short five business day period within which the IDAS revival process can be used. Outside this period, the only options to revive a lapsed development are to make an application to the Planning and Environment Court, or to lodge a fresh development application.

The Court has long had the power to revive a lapsed development application, often sending the application back to a certain point in the IDAS process. However, upon commencement of the new excusal power in section 440 of the SPA, the Court has interpreted the provision very broadly and held that it has the power to excuse a lapsed development approval, despite the wording of the section expressly referring to "a development application that has lapsed".

The expanded power comes with a sigh of relief from the development industry. Not only are the lapsing triggers in the SPA (and previously the IPA) often confusing, but they were previously coupled with an excusal power in section 4.1.5A of the IPA that could only be enlivened where "a requirement" of the IPA could be identified.

Under the SPA, the Court has the discretion to revive both lapsed development applications and development approvals. However, as the power is discretionary, it will require the provision of a reasonable explanation for the non-compliance, and it is important that there be no opposition to the application.

Footnote

¹Section 266
²Section 273
³Section 279
⁴Section 302
⁵Section 302
⁶Section 341(1)(a)
⁷Section 341(2)(a)&(b)
⁸Section 341(3)(a)
⁹Section 383
¹⁰(2003) 126 LGERA 96
¹¹At 100
¹²[2010] QPELR 207
¹³See for example Fawkes Pty Ltd v Gold Coast City Council [2008] 1 Qd R 1, and Barro Group Pty Ltd v Redland Shire Council & Ors (2009) 169 LGERA 326
¹⁴See for example National Properties Group v Toowoomba City Council & Anor [2008] QPELR 40, Muir & Anor v Logan City Council & Ors [2008] QPELR 552, and Walker & Ors v Logan City Council [2010] QPELR 490
¹⁵See for example Tremellen & Tremellen v Southern Downs
Regional Council & Ors [2011] QPELR 56, Wallace & Anor v Logan City Council [2010] QPEC 66, and Larrell Pty Ltd v Brisbane City Council [2011] QPEC 113
¹⁶[2011] QPELR 112
¹⁷At 113
¹⁸Unreported, Appeal No. BD3167 of 2011, 22 September 2011

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Australia: Reviving Lapsed Development Applications and Development Approvals under the Sustainable Planning Act (QLD)