Australia: Court steps into the shoes of council to grant Subdivision Certificate in the South West Growth Centre.

In brief - NSW Land and Environment Court's decision may have significant impacts on other greenfield developments in NSW

Declaration of interest: Colin Biggers & Paisley acted for the applicant in this case.

In Clearstate Development Co Pty Ltd v Liverpool City Council [2018] NSWLEC 1279, Dixon SC of the NSW Land and Environment Court upheld Clearstate's appeal against Liverpool Council's failure to issue a subdivision certificate for a 48 lot residential subdivision in Austral. The decision provides some timely reminders around development consents for councils and developers.

The case concerned statutory construction with the key question being: what did the development consent approve with respect to sewerage servicing for the site?

The Court found that the development consent was clear on its face, and the Council had granted the consent pursuant to a condition that required sewerage servicing to the satisfaction of Sydney Water (under section 80A(2), now section 4.17(2), of the Environmental Planning and Assessment Act 1979 (NSW) (EP&A Act)). Consequently, Council did not have any further approval role in this aspect of the development consent.

Clearstate agrees to Interim Operating Procedure with Sydney Water for sewerage services

On 21 June 2016, Clearstate was granted development consent for a 48 lot residential subdivision of 150 Tenth Avenue, Austral. The site is located within the South West Growth Centre, which means this decision may have significant impacts on other greenfield developments in NSW.

There were no specificities of how sewerage servicing of the subdivision was to occur within the development application or the development consent. But, condition 4 of the development consent, under the heading "General Terms of Approval", stated:

"Attachment 4" was a letter from Sydney Water to Council setting out its "revised comments". Notably, that letter made specific reference to a proposed gravity lead-in main to the sewer that had been agreed between Sydney Water and Clearstate at that time.

In 2017, it became apparent that further Sydney Water infrastructure (a lifting station) would be needed to service the site. Consequently, Clearstate agreed to an Interim Operating Procedure (IOP) with Sydney Water to provide sewerage services to the site given the lifting station would not be constructed for some time. The IOP was temporary infrastructure comprising an in-ground tank on one of the lots capable of holding sewage for the entire site, which would be pumped out periodically.

Having reached agreement with Sydney Water on the IOP, Clearstate was issued a section 73 certificate under the Sydney Water Act 1994 (NSW).

Liverpool City Council refuses to issue subdivision certificate

On making an application to Council for a subdivision certificate, Council refused to issue the subdivision certificate because it contended that the development consent, properly construed, only authorised and required the construction of a gravity lead-in main and that there was no contemplation of any form of IOP.

Council also argued, amongst other things, that condition 4 cannot be characterised as a condition imposed under section 80A(2) of the EP&A Act. Its argument was premised on the site being located in the South West Growth Centre (falling under the State Environmental Planning Policy (Sydney Region Growth Centre) 2006) and therefore the provision of public utility infrastructure needs to satisfy the requirements of Council not Sydney Water (see clause 6.1, appendix 8 of the SEPP).

Land and Environment Court upholds Clearstate's appeal and issues subdivision certificate

Dixon SC ultimately upheld the appeal and issued the subdivision certificate, essentially for the reasons articulated by Clearstate. The key findings were:

Condition 4 was imposed under section 80A(2) of the EP&A Act. This allowed for a development consent to be granted subject to a condition that a specified aspect of the development, that is ancillary to the core purpose of the development, is to be carried out to the satisfaction of a third party, specified by the consent authority. Accordingly, condition 4 authorised and required sewerage servicing that needed to satisfy Sydney Water.

Sewerage servicing constituted an ancillary activity to the core purpose of the approved development. Therefore, condition 4 was held to be flexible enough to allow the IOP together with the gravity lead-in main to satisfy the requirements of Sydney Water.

Council failed to preserve any further approval role in this aspect. The Court indicated that if the Council wanted to restrict the manner in which servicing could occur, it could have easily done so. The Council must take the consequences of any conditions to which the consent is subject: Ryde Municipal Council v Royal Ryde Homes (1970) 19 LGRA 321.

No inconsistency between the IOP and the development consent. The IOP is simply a form of sewerage servicing that satisfies the requirements of Sydney Water, as evidenced by the section 73 certificate.

Exempt development. While Dixon SC did not need to deal with clause 18A of the SEPP that allows development for public utility undertakings to be carried out without consent in certain circumstances, given the findings above, she made brief comments indicating she was satisfied that the carrying out of the IOP is a public utility undertaking for which separate consent was not required. This finding is significant for other IOPs that may be operating elsewhere, without development consent.

3 implications for councils and developers in regard to development consents

1. This case serves as a reminder that development consents cannot fully resolve all aspects of a development with "absolute precision". Therefore, conditions of consent that specify that a "final decision by...some delegate...to whose satisfaction specified work is to be performed" should be given effect in the interests of practicality (Howarth v Gosford City Council (No 2) (2014) 204 LGERA 425 at 189).
2. While consent authorities must not impose conditions that change the development "in a fundamental respect" or cause it to be "significantly different" from that which was approved (Kindimindi Investments Pty Ltd v Lane Cove Council (2006) 143 LGERA 277 at 28), this case demonstrates that ancillary conditions pursuant to section 4.17(2) are afforded a "degree of practical flexibility" and councils need to be careful not to unintentionally give away their powers by the operation of this section, if that is not what they intend.
3. As a result of this judgment, it is possible some councils might become more prescriptive in the drafting of development consents so that they are not inadvertently relinquishing their rights to be satisfied of certain parts of development that have not been determined at the time the development consent is granted. If this arises, there is the possibility of overlap and duplication between different authorities.

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.