Varying development standards: The proposed changes to clause 4.6

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To vary a development standard in an environmental planning instrument, an application must be made under clause 4.6 of the relevant local environmental plan. This clause enables a variation to a development standard to be approved, provided the matters set out in that clause are satisfied.

Since the Land and Environment Court’s decision in Four2Five vs Ashfield Council [2015] NSWLEC 1009, the requirements for a successful application have been the subject of intense scrutiny by consent authorities.

Arguing a successful clause 4.6 application is often fraught with difficulty.

Now, the NSW State Government is proposing to change clause 4.6 and is inviting submissions on its proposal until 12 May 2021.

We set out below the State Government’s proposal for the new clause 4.6 and provide a reminder of the current position.

The Government’s proposal

On 1 April 2021, just before the Easter long weekend, the Department of Planning, Industry and Environment released for public consultation its Explanation of Intended Effects, “Varying Development Standards: A Case for Change”.

In it, the Department outlines its proposal for a new clause 4.6 test which it says is aimed at improving planning outcomes by “creating an outcomes-based test which is robust, transparent, easy to apply and establishes greater integrity and accountability in the planning system”.

The new test would require an Applicant to satisfy a consent authority of the following matters:

  1. First, that the proposed development, involving a breach of a development standard, is consistent with:

    a. the objectives of the relevant development standard; and

    b. the zone in which the development will be carried out.
  2. Second, that the breach of the development standard will result in an improved planning outcome when compared to the development with no breach of the standard.

    In considering whether there will be an improved planning outcome, the consent authority is to consider the public interest, environmental, social and economic outcomes.

To allow some flexibility for circumstances where a breach of a development standard is so minor that an improved planning outcome cannot be demonstrated but the breach is nevertheless appropriate, the Department is considering the development of an alternative, and, it seems, less onerous test. The Department is calling for submissions to assist in the development of this alternative test.

It remains to be seen how, in practice, the proposed clause 4.6 test will be different from the existing position.

The current position

At the moment, the position is that a consent authority must not approve a development which contravenes a development standard unless the following requirements are satisfied.

First, the Applicant’s written request for a variation of the development standard must adequately address:

a. how compliance with the development standard is unreasonable or unnecessary in the circumstances of the case, and

b. demonstrate there are sufficient environmental planning grounds to justify contravention of the standard.

Second, the consent authority must be satisfied that the proposed development will be in the public interest because it is consistent with the objectives of the standard and the objectives of the zone in which the development will be carried out.

Third, the concurrence of the Planning Secretary must be obtained.

Most of the case law on clause 4.6 has focused on the requirements under clause 4.6(3). That is, that compliance is unreasonable or unnecessary in the circumstances and there are sufficient environmental planning grounds to justify the contravention.

As to the “unreasonable or unnecessary” component, in Initial Action Pty Ltd v Woollahra Municipal Council (2018) 236 LGERA 256; [2018] NSWLEC 118 at [16]-[21] the Chief Judge of the Land and Environment Court explained the common ways in which this requirement is satisfied:

  1. The objectives of the standard are met, notwithstanding non-compliance with the standard: Wehbe v Pittwater Council (2007) 156 LGERA 446 at [42] and [43].
  2. The underlying objective or purpose of the development standard is not relevant to the development meaning that compliance is unnecessary: Wehbe v Pittwater Council at [45].
  3. The underlying objective or purpose would be defeated if compliance was required.
  4. The development standard has been virtually abandoned or destroyed by the Council’s own decisions in granting development consents that depart from the standard: Wehbe v Pittwater Council at [47].
  5. The zoning of the land on which the development is proposed to be carried out is unreasonable or inappropriate so that the development standard is also unreasonable or unnecessary and compliance with the standard is therefore unreasonable or unnecessary: Wehbe v Pittwater Council at [48].

As to the “sufficient environmental planning grounds” component, the Chief Judge at [23] explained that the grounds must:

  1. Relate to the subject matter, scope and purpose of the Environmental Planning and Assessment Act 197 including the objects of the Act in s 1.3.
  2. Justify the contravention of the development standard, not simply promote the benefits of carrying out the development as a whole: see Four2Five Pty Ltd v Ashfield Council [2015] NSWCA 248 at [15].

It is often difficult to demonstrate sufficient environmental planning grounds, particularly where the breach is minor.

Under the State Government’s proposal, the requirement will be to demonstrate “improved planning outcomes”. It remains to be seen how this is different to “sufficient environmental planning grounds”. However, the Department’s proposal to include a range of matters that a consent authority must consider in determining an improved planning outcome, including social and economic outcomes, may provide greater flexibility for demonstrating this requirement.

The Department’s proposal for an alternative test for minor non-compliances is welcomed news and may provide the much needed flexibility where a breach is minor, for example to accommodate a lift overrun. However, how such a test will be formulated is yet to be seen.

Key points

  • At the moment, the Department’s proposed changes to clause 4.6 do not appear to be significantly different from the existing position.
  • The proposed flexible alternate test for minor breaches is welcomed news, but what that test will look like is not yet known.
  • Public submissions on the Department’s proposal close on 12 May 2021: www.planningportal.nsw.gov.au/variations-review

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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