Commencement

A Change To What Constitutes 'Commencement' of an Approved Development

The current law

It is very important that work on an approved development "commences" before the end of the lapsing period so that the development consent is preserved. After the development has commenced, there is generally no need for it to be completed within any particular time.

At present, what constitutes "commencement" is settled law. The rules are governed by section 95(4) of the Act which is in the following form:

Tovedale

The "commencement" provision was the subject of detailed consideration by the Court of Appeal in Hunter Development Brokerage Pty Ltd v Cessnock City Council; Tovedale Pty Ltd v Shoalhaven City Council [2005] 140 LGERA at 201 (“Tovedale).

In Tovedale the Court of Appeal set out general principles for determining whether a development consent has lapsed. It was said that there were three questions to be answered in deciding the matter:

• was the work relied on building, engineering or construction work; if so,
• did it relate to the approved development; if so,
• was it physically commenced on the land to which the consent applied prior to the relevant lapsing date?

Contrary to the argument raised by the Councils in Tovedale, the Court expressly held that physical surveying work on the development site was “engineering” work for the purposes of section 95 (4) of the Act.

The Court also held a physical geotechnical investigation work on the development site was “engineering” work sufficient to meet the commencement test.

The required connection or relationship between the work and the development consent was satisfied if the relevant work was a necessary step in, or part of, the process required for, or involved in, the construction of the building or the subdivision which was authorised by the consent.

The concept that the work must be “physically commenced” required physical activity which manifested itself on the land and which was not merely a sham. A material change to the physical nature of the land was not required.

In Tovedale it was also held that merely preparatory work is not outside the concept of “physical commencement” and the Court found there was no room in the legislation for a concept of “merely preparatory” work.

However, physical work must be authorised by the development consent. If there are pre- conditions before that physical work may be commenced and those pre-conditions are not followed, then the physical work is unauthorised and cannot found commencement of the development.

Since the decision in Tovedale, it has been common for developers to rely upon geotechnical investigations and physical surveying work on the site as "engineering" work for the purpose of the commencement test.

Often, it is a requirement of conditions of consent for building (or an integral part of the preparation of construction certificate plans) for there to be further geotechnical investigation works to assist engineering designs and/or physical surveying works involved in the location of property and building boundaries.

With subdivision approvals, a common approach is to engage a surveyor to physically locate the centre of roads, lot boundaries and the like to assist in the preparation of a construction certificate plans for roads and drainage.

The Planning Bill 2013

This settled approach to "physical commencement" under the Act will change following the proclamation of the Planning Bill 2013 which is expected early in 2014. When that occurs, section 95(4) of the Act will be replaced by a new section 95(3) in the following form:

Importantly, the work which must be physically commenced on the land is now "building work" (for development which compromises the erection of a building) or "subdivision work" (for development being the subdivision of land). It is unclear what work is required for the third type of development being "the carrying out of a work".

A significant element of uncertainty will be introduced into the planning system when section 95(4) of the Act is replaced. It is unlikely that physical activity on the land involving geotechnical investigation work and/or surveying work will constitute "building work" or "subdivision work" for the purpose of "commencement".

Although both of the definitions of "building work" and "subdivision work" refer to "any physical activity" involved the erection of the building or the carrying out of the subdivision, a Court will probably decide that the Parliament was seeking to achieve a change by deletion of the word "engineering".

Accordingly, even though the geotechnical and surveying work on the land would be a "physical activity", there is a strong argument that the activity does not constitute either "building work" or "subdivision work" for the purpose of the commencement test. It is likely that a Court would hold that something further than the geotechnical and/or subdivision work is required before the "commencement" test under the new section 95(3) is satisfied.

Need for urgent action

The effect of this change will apply immediately upon the proclamation of the amendments to the Act. This means that, if there is a development consent which is current but not yet "commenced" on the date of proclamation, the new test will apply.

It is unclear what work will be required to satisfy the new test. However, it is possible that the definition of "building work" will require physical work constituting the erection of a building to preserve the development consent. Generally, it is not possible to carry out any work on the erection of a building without a prior construction certificate.

Likewise, the physical activity required for "subdivision work" might require construction of roads or drainage pursuant to a construction certificate.

These are far more time consuming and expensive actions than the present physical engineering work which will satisfy the commencement test.

It is strongly suggested that, unless developers have clear plans to commence and complete developments within the lapsing period set by the consents, they should take immediate steps to "physically commence" under the current Tovedale test. If they do not, the requirements will become far more onerous following the proclamation of the amendments to the Act.