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An unexpected step: a new interpretation of staged development applications

The extensive redevelopment of the Walsh Bay Arts Precinct has hit a snag following a recent decision of the NSW Court of Appeal which may have significant impact on staged development applications. The decision adds new requirements for staged development applications including multiple subsequent development applications and consideration of the impacts of construction, with the State Government attempting rush through new legislation to remedy this new interpretation of staged development requirements.

Staged development applications allow a proponent to seek preliminary consent for a large project through an original development application (DA) that sets out a concept proposal of the development and is to be followed by subsequent DAs for separate components of that development. The benefit of staged development is that it adds some certainty to the future of a large project, particularly important where there are a number of stakeholders. It also establishes a base consent to which each of the subsequent DAs must conform.

This case involved the appellant, a restaurant business located in Walsh Bay, challenging the validity of the development consent granted to the initial DA in the staged development of the Walsh Bay Arts Precinct. The consent was challenged on the grounds that it did not consider the impacts related to the project’s construction as required by s 79C of the Environmental Planning and Assessment Act 1979 (EPA Act). The Land and Environment Court dismissed the proceedings, holding that the consent authority could defer any consideration of construction-related impacts for later DAs in the staged development.

This decision was overturned on appeal by the Court of Appeal which found two requirements of staged development under the EPA Act:

  1. A staged development application must be followed by at least two subsequent detailed DAs relating to the project; and
  2. Any matter that must be considered under the EPA Act when giving development consent must be considered in the initial DA for staged development and cannot be deferred.

The Court found that the language of the EPA Act, and in particular the use of pluralisation, indicated that the staged DA had to be followed by more than one subsequent DA. Because the Walsh Bay developer (Arts NSW) did not indicate an intention to provide more than one further DA, the initial consent was invalid.

The Court also could see no reason why the requirements of consideration under s 79C of the EPA Act would not apply to a staged DA. As the consent was given without considering the impacts of construction, the consent was also invalid under this ground.

The impact of the decision extends well beyond Walsh Bay, with many staged development proposal possibly at risk of being similarly challenged. As expected, the NSW Government has proposed draft amendments to the EPA Act that will clarify the requirements for Staged Development, now being renamed “concept development applications”. The new “concept development applications” can now be the subject of just a single subsequent DA and has a reduced requirement under s 79C. The changes as currently drafted will apply retroactively but will not overturn any Court decision such as the Walsh Bay matter.

Alex Collie, Lawyer

Paul Carroll, Partner

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