A recent decision of the Land and Environment Court in Fabemu (No 2) Pty Ltd v Kiama Municipal Council  NSWLEC 79 is an example of the pitfalls in attempting to establish that a development consent has been lawfully commenced. In this case the Court held that geotechnical testing and survey work was not sufficient to prevent a development consent from lapsing.
A development consent issued under the Environmental Planning and Assessment Act 1979 (“EP&A Act”), that is not a deferred commencement consent or a concept approval, lapses after the period prescribed in sections 4.53(1) and (2) of the Act, unless “building, engineering or construction work” is commenced before the lapsing date. The work must satisfy the tests in section 4.53(4) of the EP&A Act. If building, engineering or construction work satisfies the tests in section 4.53(4) of the EP&A Act, and is commenced before the lapsing date, the development consent continues in force indefinitely.
In Fabemu the Court considered whether geotechnical and survey work was sufficient to prevent a development consent issued by Kiama Municipal Council for construction of a dwelling house on land at Fern Street Gerringong from lapsing. The consent was due to lapse on 25 October 2023, having the benefit of amendments to the lapsing provisions introduced during the COVID-19 Pandemic.
The approved dwelling was described by the Court as an unusual design, “being in the shape of an annulus, semi-sunk into the slope of the site, with its eastern edge being located, effectively, as a tangent to the foreshore building line”. The proposed dwelling contained 11 bedrooms and a basement car park for 19 vehicles.
Fabemu filed evidence that in December 2021 geotechnical engineers excavated seven boreholes on the development site (in the location of the proposed driveway and dwelling) and carried out tests on the soil extracted. The location of the boreholes was determined and staked on site by a surveyor prior to the investigations being undertaken.
Tests in Section 4.53(4) of the EP&A Act
The three tests1 in section 4.53(4) of the EP&A Act for the lawful commencement of development are:
- Was the work that is relied on to found physical commencement “building, engineering or construction” work? If so,
- Did the work relate to the approved development? If so,
- Was the work physically commenced on the land to which the consent applied prior to the lapsing date?
The second test requires the subject work to be carried out in compliance with the relevant development consent and any applicable provisions of the EP&A Act.2 Work carried out that is not in accordance with the terms of the development consent is not counted a work that relates to the approved development. This in turn requires consideration of the terms of the development consent and whether all preconditions (if any) to the commencement of work have been satisfied.
Was Geotechnical and Survey Work Lawful Commencement?
The Court was satisfied in this case that the geotechnical and survey work passed the first and third tests in section 4.53(4), being forms of “engineering work” carried out on the land to which the consent related prior to the lapsing date.
The second test required the Court to consider “whether any of the unsatisfied conditions of consent act as a condition-precedent barrier to concluding that the consent has commenced”. In that regard, the Court was taken to a number of conditions in the development consent issued by Kiama Municipal Council that were expressed as being required to be satisfied “before the commencement of works”.
The applicant conceded that some of the preconditions in the development consent had not been satisfied but contended that the expression “works” in those conditions did not mean preparatory work such as geotechnical investigations or survey work. Whether or not the applicant’s contention was correct involved interpretation of the meaning of the conditions according to principles of statutory interpretation.3 Those principles required the consent to be “construed as whole to give effect to the reasonable expectations it engenders using common sense rather than in a legalistic manner”.
The Court agreed that the word “works” in all but one of the conditions did not mean preparatory work such as geotechnical investigations or survey work. The exception was condition 4, which was in the following terms:
The developer must provide a traffic control management plan complying with the design requirements of the Roads and Maritime Services (RMS) “Traffic Control at Work Sites” manual. The traffic control management plan must be designed by an RMS accredited designer and must be provided to and approved by Council prior to the commencement of any works.
Condition 4 had not been satisfied by the applicant prior to the geotechnical or surveying work being carried out. The Court concluded that compliance with condition 4 was a “mandatory, necessary prerequisite to the carrying out of any works (including the works relied upon for seeking the declaration in the Company’s Amended Summons)”. The non-compliance with condition 4 was an “insurmountable barrier” to the applicant’s claim. The Court held that the geotechnical and survey work did not relate to the approved development.
The reasons the Court held that condition four (4) applied to the geotechnical and survey work can be summarised as follows:
- The location of the condition in the notice of determination at the beginning of the list of conditions and under the heading ”General”. This suggested the condition should be construed broadly and as applying to all work.
- The geotechnical and survey works were a precursor to the construction of the driveway “which would necessarily involve significant movement by plant and equipment onto the property from Fern Street” which necessitated the need for compliance with condition 4.
The judgement in Fabemu does not explain why the Court conflated the potential traffic impacts arising from the geotechnical work and survey work, with the construction work involved in construction of a driveway. The traffic impacts or geotechnical and survey work are quite different to traffic impacts arising from the construction of a road. Nor does the judgement reveal the basis on which the Court concluded that the work would involve “significant movement” when no expert evidence was before the Court.
In any event, the decision in Fabemu is a salutary reminder that each and every condition of a development consent must be considered carefully and construed broadly. If there is any doubt about whether a condition applies to preparatory work (as opposed to the construction of a building), applicants should err on the side of caution and ensure the condition is satisfied before the preparatory work commences.
Beware the Effect of Section 96 of the Environmental Planning and Assessment Regulation 2021
The rules governing the lapsing of a development consent were significantly altered on 15 May 2020 when clause 124AA of the Environmental Planning and Assessment Regulation 2000 (now section 96 of the 2021 Regulation) commenced. Section 96 of the 2021 Regulation provides that work in the nature of, among other things, excavating a bore hole for soil testing or the carrying out of survey work, is excluded from the expression “building, engineering or construction work” in section 4.53(4) of the EP&A Act.
Section 96 of the 2021 Regulation applies only to a development consent that is not a deferred commencement or concept approval granted after 15 May 2020, being the date on which section 96 of the 2000 Regulation commenced. A development consent granted after 15 May 2020 but before 25 March 2022 automatically takes the benefit of the COVID-19 extended 5 year lapsing period (see s4.53(1)(b) EP&A Act). Those consents will begin to lapse in May 2025. Applicants intending to lawfully commence a development consent issued between 15 May 2020 and 25 March 2022 will not be able to rely on geotechnical investigations or survey work to prevent the consent from lapsing.
Development consents that are not deferred commencement consents or concept approvals issued after 25 March 2022 and which the council may have reduced the lapsing period to 2 years (see s4.53(2) EP&A Act), will begin to lapse after 25 March 2024. Applicants intending to lawfully commence those development consents will not be able to rely on geotechnical investigations or survey work to prevent the consent from lapsing.
This article is not intended to be legal advice. If you require legal advice on specific facts, please contact Michael Mantei of Madison Marcus on the number or email below.
- Hunter Development Brokerage Pty Ltd v Cessnock City Council; Tovedale Pty Ltd v Shoalhaven City Council (2005) 63 NSWLR 124;  NSWCA 169
- Coalcliff Community Association Inc v Minister for Urban Affairs & Planning (1999) 106 LGERA 11; Green v Kogarah Municipal Council (2001) 115 LGERA 231; K and M Prodanovski Pty Ltd v Wollongong City Council  NSWCA 202
- See summary of principles in Nash Bos Builders Pty Ltd v Riverina Water County Council (no 2)  NSWLEC 156