Changing development approvals – don’t take the Court’s discretion for granted

The lack of unit sales associated with a development to be constructed in accordance with a development permit for 20 multiple dwelling units and a shopping complex (Development Approval), forced a Sunshine Coast developer to reconsider its options for the delivery of its project.

To address financing and project delivery issues, the developer sought to amend the Development Approval to allow the development to be completed in two separate stages (Proposed Change).

The Proposed Change contemplated that the shopping complex would be delivered as part of the first stage of the development with the unit development being delivered as part of the second stage of the development.

Because the Development Approval had been given by the Planning and Environment Court (Court), the developer was required to apply to the Court for approval of the change application under section 78(1) of the Planning Act 2016 (PA).

The Council did not oppose the relief sought by the developer.

Was the proposed change to stage the development a ‘minor change’ to the development permit?

The change application was decided by the Court in Burnett Street Nominees Pty Ltd v Sunshine Coast Regional Council [2019] QPEC 35.

Under the PA, the Court must be satisfied that the Proposed Change to the Development Approval was a minor change.  Schedule 2 of the PA defines minor change as follows:

“minor change means a change that— …
…
(b) for a development approval—

The determination as to whether or not the Proposed Change to the Development Approval would not result in a substantially different development was critical to the outcome of the application.

The Applicant argued that while the staging may introduce the potential for delivery of only part of the proposed development, this was not a relevant factor.  Evidence from the Applicant’s town planner was relied upon to support the Proposed Change.

In support of the Applicant’s submission that the risk that only part of the development would be delivered was not relevant, the Applicant relied on Schedule 1, section 4(d) of the Development Assessment Rules, which sets out that a change may result in a substantially different development if the change may “… change the ability for the proposed development to operate as intended”.  It was argued that this criterion requires a consideration as to whether the development will change from what was intended, and that in this case the intention of the development is to deliver both stages of the approved development form.

His Honour Judge Long DCJ observed that the evidence established that there was a risk that only the first stage, being the shopping complex may be completed within the currency of the Development Approval.

His Honour’s concern was not with the manner in which the development would be delivered but whether all of the development would be delivered if the Proposed Change was allowed.

His Honour did not agree with the Applicant’s submissions and ultimately held that it was clear that the motivation for the Proposed Change was for the developer to have the ability to construct the shopping centre without the units in the first instance.

It was ultimately held that the Proposed Change would result in a substantially different development and as such the Court refused the application for a minor change to the Development Approval.

Key takeaway

The inability to sell off the plan units to secure funding for the development was the key reason for the proposed staging of the development to enable the shopping complex to be built first.  The Applicant’s evidence and legal submissions were not enough to convince the Court that the Proposed Change would not result in a substantially different development, so the Court refused the Proposed Change to stage the development.

The key message here is to ensure that these types of issues are identified early on in the development phase, as any changes to development approvals later down the track can not only be problematic but costly to deal with.

This case also highlights that the Court will independently and thoroughly assess proposed changes and it should not be assumed that the Court will simply ‘rubber stamp’ a change, even if not opposed by the local government.

Authored by:

Stafford Hopewell, Partner
Sarah Day, Associate