Just when you thought it was safe to draft a Clause 4.6 request...

Changes are coming to the way variations to development standards under environmental planning instruments are considered and granted

Since replacing the State Environmental Planning Policy No. 1 – Development Standards (SEPP 1) as the primary and, then, the sole means of varying development standards under an environmental planning instrument, clause 4.6 of Standard Instrument Local Environmental Plans (Clause 4.6) has been the subject of much debate, tribulation and judicial deliberation.

A more consistent approach (at least in Court matters) has emerged in recent times thanks to guiding judgments handed down by the Court in Initial Action v Woollahra Municipal Council [2018] NSWLEC 118 and Rebel MH Neutral Bay Pty Ltd v North Sydney Council [2018] NSWLEC 191.

But just when you thought the relevant requirements of Clause 4.6 were familiar, the NSW Government has announced its desire and intent for change. On 31 March 2021, Minister Stokes announced that Clause 4.6 is to be amended and released an Explanation of Intended Effects (EIE).

The need for change

The EIE outlines that change to Clause 4.6 is required for the following reasons:

• To simplify what has become an overly complicated process;

• Greater transparency in the decision-making process;

• Reducing opportunities for corruption; and

• Reducing the number of exclusions from the operation of Clause 4.6.

The proposed changes

New Test – Improved Planning Outcome

The most significant change proposed to Clause 4.6 is for a “revised test” that will require applicant’s seeking a variation to development standards to demonstrate that the proposed development:

1. Will be consistent with:

a) the objectives of the clause containing the development standard to be varied; and

b) the zone in which the development is proposed; and

2. Will result in an “improved planning outcome”, when compared with what would have been achieved if the development standard was not contravened, by consideration of the public interest and environmental, social and economic outcomes.

Consistency with the objectives of the development standard is, of course, already a requirement for the written request to demonstrate as part of the current unreasonable and unnecessary test of clause 4.6(3)(a), being one of the (and the most commonly invoked) ways of demonstrating compliance with the development standard is unreasonable or unnecessary in the circumstances of the case (as established by the Court in Wehbe v Pittwater Council [2007] NSWLEC 827 in relation to SEPP 1 and applied to Clause 4.6 in Initial Action).

Consistency with the zone objectives (and, therefore, the public interest) is also a current requirement under clause 4.6(4)(b) that the consent authority must be directly satisfied of.

An “improved planning outcome” seems to have replaced the current requirement of clause 4.6(3)(b) for the written request to demonstrate “sufficient environmental planning grounds" to justify contravening the development standard. This change seems to be aimed at bringing the requirements of Clause 4.6 back towards:

• The current objective of Clause 4.6 for achieving “better outcomes for and from development by allowing flexibility in particular circumstances”; and

• Section 4.15(1) of the Environmental Planning and Assessment Act 1979, which requires consideration of environmental, social and economic outcomes (in subsection (b)) and the public interest (subsection (e)) in the determination of all development applications.

Alternative Test for Minor Variations

In addition to the “revised test” outlined above, an “alternative test” for minor variations to development standards is also mooted.

The form or essential criteria of an “alternative test” has not been provided – it is open to submissions – but is said to be for suitable flexibility to be applied to those instances where an improved planning outcome cannot be demonstrated but a variation to a development standard is appropriate in the circumstances as the impacts will be negligible.

Examples of when an “alternative test” may have application are:

• A small breach of a height of buildings development standard on a sloping site and the building is generally designed with the topography.

• An existing non-compliance is not further extended.

• The contravention is minor, relates to a small portion of the site and has minimal or negligible environmental impacts.

One could speculate that “alternative test” could be applied to variations within 10% of a numerical requirement of a development standard (consistent with variations for which the concurrence of the planning secretary can currently be assumed) and might be subjected to a test akin to the current “sufficient environmental grounds” requirement.

Exclusions

Subsection (8) of Clause 4.6 currently provides councils with the opportunity to exclude certain development standards from variation.

It is proposed to remove this discretion, leaving only development standards for complying development and BASIX requirements as unable to be varied under Clause 4.6.

This will open up all development standards in environmental planning instruments, but for those related to complying development and BASIX requirements, to variations under Clause 4.6.

Removal of Concurrence

Clause 4.6 currently requires concurrence to be obtained from the Planning Secretary prior to consent being granted for development that varies a development standard. Most variations are currently dealt with under “assumed concurrence” from the Planning Secretary and so this function has limited practical application.

It is proposed to remove this concurrence requirement from Clause 4.6, to “reduce red tape” and “improve assessment times”.

Reporting and Monitoring

It is proposed that councils will have to publish reasons for granting or refusing a request to vary a development standard, and to prepare reports on decisions with respect to variations. This will improve transparency and accountability for such decisions.

In addition, the Department of Planning, Industry and Environment (DPIE) will have monitoring, auditing and investigative functions with respect to data collected on variations.

Implications

With many aspects of the “revised test” already being part of Clause 4.6, fundamental change appears unlikely.

However, it remains to be seen whether the proposed changes will have the effect of simplifying assessment of clause 4.6.

In our view, adding a two-tiered test system will likely increase complexity and uncertainty unless clear criteria are provided on the circumstances in which variations will be subject to either the “revised test” or the “alternative test”. If given the option, applicants will naturally opt for the “alternative test” and so there may arise a need to justify which test a request to vary a development standard is to be subjected to.

The EIE provides that the onus will be on an applicant for a variation to a development standard must demonstrate to the consent authority that such a variation is appropriate in the circumstances and so it appears that the significance and precision of the drafting of a written request will remain.

The strengthening of reporting and monitoring processes for variations can only improve transparency, accountability and probity. Consolidation of information on variations being granted and review by the DPIE should add a layer of supervision not currently provided for. However, the proposed removal of Planning Secretary concurrence will seemingly create a reactive, rather than a proactive, process for those few, larger variations which are likely to require added scrutiny at the assessment stage. This seems at odds with the aims for improved planning outcomes and accountability and probity.

The EIE also provides that the DPIE will publish guidance material on the changes and their application. This will be needed but, in our view, should be supplemented by compulsory training for those making decisions under Clause 4.6. Such will increase prospects for consistency and appropriate application of the new Clause 4.6, which the current version has suffered from.

Next steps

The EIE is currently on exhibition until 12 May 2021, with submissions invited through the DPIE.

The Environment and Planning team at Bartier Perry will be keenly observing developments on the changes to Clause 4.6 and will continue provide updates on progress and (if changes are adopted) implementation.

Author: Steven Griffiths