Local Government Legal recently acted for Kempsey Shire Council (KSC) in successfully defending a Class 1 appeal lodged in the Land and Environment Court by 2 Phillip Rise Pty Ltd (the Applicant) regarding the deemed refusal of a construction certificate to undertake site clearing works.
The site clearing works related to a development consent granted by KSC on 24 February 1993 (the Consent) for a resort complex (which comprised 180 residential units together with a commercial and administration complex comprising shops, bar areas, conference auditoriums, restaurant/dining areas and administrative areas together with car parking, recreation facilities and associated landscaping ) on land described as Lot 2 DP 1091323 known as 1 Phillip Drive, South West Rocks (the Land).
Although the appeal was brought in relation to the deemed refusal of the construction certificate, the main issue for determination was whether the Consent was operative and, in particular, whether engineering work relating to the proposed development was physically commenced on the Land before the date on which the consent would otherwise have lapsed.
As a preliminary issue, the Commissioner considered whether the activities described in the application for the construction certificate constituted “building work” as defined in s 6.1 of the Environmental Planning and Assessment Act 1979 (EPA Act).
The Commissioner agreed with Council’s submissions and found that while the works did not involve the erection of a building, the removal of vegetation, the stormwater drainage works and soil erosion control works proposed in the construction certificate application are all physical activities involved in the erection of the buildings that are the subject of the Consent, which constituted building work for the purposes of s 6.3(1) of the EPA Act, and could not be carried out without a construction certificate.
As it was found that the construction certificate was required, the Commissioner had to address whether the development consent had not lapsed.
The question of whether a development consent has lapsed has been raised in several previous decisions of the Court in Class 1 appeals: see Savellis v Sutherland Shire Council  NSWLEC 100 and Dennes v Port Macquarie-Hastings Council  NSWLEC 95. Whilst it was noted that the question of whether a development consent had lapsed was unusual to raise in Class 1 proceedings concerning an application for a construction certificate, the Commissioner did note that it was a matter that the Court could determine as a jurisdictional pre-requisite to the determination of the Application.
The relevant lapsing date for the Consent was 24 February 1998 pursuant to s 99(1) of the EPA Act which was operative at the time the Consent was effective. At the relevant time, s 99(4) of the EPA Act also stipulated that development consent for the erection of a building did not lapse if building, engineering or construction work relating to the building had been physically commenced on the land to which the consent applied before the date on which the consent would otherwise have lapsed. The key question for the courts determination then became whether building, engineering or construction work relating to the proposed development subject of the Consent had been physically commenced on or before 24 February 1998.
Condition 38 of the Consent required:
“Further testing for the presence of acid sulphate soils shall be undertaken prior to the release of the building application and appropriate measures identified and implemented to obviate and (sic) impact” (Condition 38)
The Applicant submitted that engineering work, being the carrying out of acid sulphate soil testing on the Land, had occurred in 1994 and that work was sufficient to prevent the Consent from lapsing. The Applicant argued that this testing had been carried out in accordance with an access deed dated 30 September 1994 (the Deed) between the owner (Chrisbeck) of the land and Caltex, which enabled Caltex to enter the Land to carry out groundwater testing on the Land, as part of its contamination investigations in relation to its former fuel terminal on adjacent land.
The Applicant argued that the Deed which referenced the Consent, together with correspondence between the owner and Caltex in 1994 seeking confirmation around the methodology behind the testing, indicated that the parties at the time contemplated that acid sulphate testing would be undertaken on the Site including to satisfy Condition 38. Further, the inclusion of the borehole on the Land was consistent that the parties to the Deed were concerned with ensuring the testing was undertaken specifically on the Land the subject of the Consent.
Council argued that the Deed was merely an agreement allowing Caltex to access the Site and did not require Caltex to do any testing for acid sulphate soils. The terms of the Deed also enabled Chrisbeck to carry out its own sampling and testing which it was submitted, was inconsistent with an interpretation that Chrisbeck anticipated the testing was for the purposes of complying with Condition 38. On a reasonable interpretation of the Deed, the Council argued that the inclusion of the confidentiality provision resulting in Chrisbeck being unable to disclose the results of the testing to the Council except with the further consent of Caltex, is contrary to the inference that the test results were intended to satisfy Condition 38. Lastly, the borehole tested was not part of the proposed development site which also indicated that the acid sulphate soil testing was not carried out for the purpose of satisfying Condition 38.
The parties agreed that the leading authority was the decision of the Court of Appeal in Hunter Development Brokerage Pty Ltd v Cessnock City Council (2005) 63 NSWLR 124;  NSWCA 169 (‘Hunter’).
There was no real dispute that the acid sulphate soil testing carried out on the Site was capable of constituting “engineering work” for the purposes of s 99(4) of the EPA Act and the Commissioner noted the practice of soil testing qualified as “engineering work” for the purposes of physical commencement in this decision, as did spring water testing in Norlex Holdings Pty Ltd v Wingecarribee Shire Council (2010) 177 LGERA 261;  NSWLEC 149 (at ). The key issue was whether the testing carried out relevantly related to the Consent.
The Commissioner noted that the Applicant must persuade the Court that the development consent on which it relies is operative and has not lapsed.
The Commissioner was not satisfied that the acid sulphate soil testing on the Land had been carried out for the purpose of complying with condition 38 of the Consent and thus did not relate to the development which was the subject of the Consent.
The Commissioner concluded that the appeal should be dismissed based on the fact that the work relied on by the Applicant to prevent the Consent from lapsing did not relate to the development subject of the Consent, and thus the Consent had lapsed on 24 February 1998.
The full judgment can be viewed here.
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