Key Points:

Although there are no hard and fast rules for what is a lawful condition, there are fundamental questions that you can ask in determining whether a condition meets the legal tests.

It is very rare for a planning or environmental approval to be given without conditions being imposed. Decision-makers often allude to their approvals having "the most", "the most stringent" or "the most rigorous" conditions.

Conditions are often described as the community price of an approval, and can be just as much about communicating to stakeholders the justification for the approval and how its impacts will be managed. Conditions can also determine whether a project is feasible, and will proceed.

Most statutes contain very broad tests for determining whether a particular condition is lawful. Conditions are required to be "reasonable", "relevant", "reasonably required", "necessary or desirable" or "necessary or convenient" . Decision-makers are generally given a wide discretion in conditioning approvals, and this makes it impossible and probably undesirable for there to be prescriptive rules about what is a lawful condition. What is lawful for one approval may not be lawful for another.

The key questions to ask about conditions

Although there are no hard and fast rules for what is a lawful condition, there are fundamental questions that you can ask in determining whether a condition meets the legal tests:

  • What is the change brought about by the development?
  • Does the condition respond to that change?
  • Is the condition proportionate to that change?
  • Is there a power to impose the condition, or conversely, is there a prohibition on imposing the condition?

If you can't answer the above questions then it gets a little awkward, and it needs to be determined whether the condition is a fundamental part of the approval, and whether the decision-maker has enough information to give an approval.

While having policies and guidelines that inform conditions can help to provide a consistent and streamlined process, those policies or guidelines cannot be slavishly followed. Standard or precedent conditions can be useful, but need to be applied with care, and having regard to the particular application before the decision-maker.

The conditions checklist

When reviewing or negotiating conditions, the same questions come up over and over again. Whether you are drafting conditions or negotiating conditions, think about:

❏ can the condition be imposed?

  • fundamentally, is there a statutory prohibition on imposing the condition?
  • is the condition within the power of the decision-maker?

❏ why do you need the condition? 

  • what is the impact or risk of the development that the condition is responding to?
  • is the condition necessary?
  • is this the right approval for the condition, or is the issue more appropriately managed on related approvals?

❏ who has to perform the action required of the condition?

  • is it the applicant/approval holder?
  • is it something within the control of the applicant/approval holder?
  • is the condition trying to impose an obligation on a third party?
  • who has to enforce the condition? Is this an approval that can be enforced by third parties?

❏ what does the condition require?

  • is the purpose of the condition clear?
  • is it too broad or too specific?
  • is there any ambiguity in the drafting?
  • is it enforceable? If enforcement of the condition was required, is it sufficiently clear what the condition requires?
  • does the condition trigger further approval requirements?
  • is the condition trying to fundamentally change the development applied for?

❏ where does the thing have to be done?

  • is the condition requiring something to be done on land within the applicant/approval holder's control?

❏ when does the thing have to be done?

  • are the timeframes for performance clear and unambiguous?
  • how should timing be framed? Should something be done by a certain date, triggered by another action or within a set timeframe?

❏ overall - does the condition work?

  • how does the condition fit in with other conditions in the approval?
  • are there any other conditions that overlap or are inconsistent with the condition?
  • does the condition mechanically work?

❏ is the condition practical?

  • does the condition add anything to the outcomes of management of impacts of the development?
  • do you know what compliance is going to cost?
  • is that cost proportionate to the risk or change created by the development?
  • does the condition achieve the outcomes it needs to achieve?

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.