Changes to clause 4.6 exceptions to development standards open for discussion

The NSW Department of Planning, Industry and Environment (DPIE) is seeking feedback on how to improve the way clause 4.6 (exceptions to development standards) operates and provide certainty to councils and the development industry.

Snapshot

• Clause 4.6 is a mandatory clause in all NSW Local Environmental Plans (LEPs) that permits exceptions to development standards. However, its application by councils and the Court has, at times, been confusing and inconsistent.
• DPIE has released a discussion paper: Varying Development Standards: A Case for Change – Explanation of Intended Effect (Discussion Paper) proposing to amend clause 4.6 of the Standard LEP.
• The proposed changes are intended to facilitate beneficial development and bring consistency and transparency to the approach taken by councils to exceptions to development standards by permitting exceptions that result in an “improved planning outcome”.
• We agree that a more consistent and transparent approach is needed but are reserving judgment on the proposed new test for now. The change will inevitably bring some uncertainty until the case law evolves to clarify the new test, and fill out the “improved planning outcomes” concept.

The current test: “Unreasonable or unnecessary”

Currently, clause 4.6 prohibits development that contravenes a development standard, unless the proponent can show that compliance with the development standard is “unreasonable or unnecessary” in the circumstances of the case and that there are sufficient environmental planning grounds to justify the contravention. DPIE suggests in its Discussion Paper that the current test is too complicated, as evidenced by the growing body of case law on the topic.

In our view, the Minister for Planning and Public Spaces put it well in a presentation to the NSW Environment and Planning Law Association on 30 March, saying that the clause has been the cause of “complexity, cost and corruption” in planning law.

The proposed new test: “Improved planning outcome”

The Discussion Paper proposes a new test, permitting a contravention of a development standard if a consent authority believes that:

• the proposed development is consistent with the objectives of the development standard and the zone in which the development will be carried out; and
• the contravention will result in an improved planning outcome, having regard to the public interest, environmental outcomes, social outcomes and economic outcomes.

DPIE suggests that replacing the “unreasonable or unnecessary” test will make planning law clearer and more “outcomes focused”. It also predicts that fewer cases will proceed to the Land and Environmental Court, saving developers and taxpayers money.

We agree that a more consistent and transparent approach is needed but are reserving judgment on the proposed new test for now. While there are real problems with the current formula and related case law, which evolved from the old SEPP 1, the change will inevitably bring some uncertainty until the case law evolves to clarify the new test, and fill out the “improved planning outcomes” concept.

Alternative test for minor variations

DPIE has indicated that it might include an alternative test to ensure that flexibility can be applied when an improved planning outcome cannot be demonstrated, but the variation is appropriate in the circumstances because its impact is negligible. The proposal is that minor variations should be acceptable except for instances where it results in a worse planning outcome.

By way of example, the Discussion Paper designates small breaches of height controls accounting for site topography, changes to non-compliant developments that do not extend the existing non-compliance, and contraventions that relate only to a small portion of a site as “minor variations” for the purposes of clause 4.6.

Removal of exceptions

Currently, consent to a contravention of a development standard cannot be granted if the development standard relates to complying development, BASIX requirements or the miscellaneous provisions in clause 5.4 (which allow councils to add other standards that cannot be contravened). For consistency’s sake, the Government proposes to remove these exceptions, so that a contravention of a development standard can be permitted in all circumstances so long as the proposed tests are satisfied. However, the strict prohibition against fragmentary subdivision of land zoned as Rural and Environmental in clause 4.6(6) will remain.

The Government proposes a one-year transitional period to allow councils to review development standards and related objectives and progress planning proposals if necessary.

Increased transparency through public reporting of reasons

NSW ICAC’s Operation Dasha investigation report found that contraventions of development standards can dilute transparency in the planning system and thereby create opportunities for corruption. To combat this, the Government proposes to require consent authorities to publicly report the reasons for granting or refusing a contravention request that they are currently mandated to record under clause 4.6(7) of the Standard Instrument LEP. The reports will be available on the NSW Planning Portal.

The Discussion Paper also proposes to remove the requirement in clause 4.6(4)(b) that the Planning Secretary must grant concurrence prior to a consent authority making a determination to vary a development standard. This is likely to speed up the process for obtaining consent to a contravention of a development standard.

Next steps

The NSW Government is seeking feedback on its proposal from 31 March 2021 until 12 May 2021. You can access a copy of the Discussion Paper here, and make a submission here.

We encourage you to think about whether the proposed test answers any queries around the complexity and inconsistency of clause 4.6 for your development: What is a development standard? How far can you deviate? Will each council take the same approach? Will each developer and each development get the same result?

By Rebecca Davie, Senior Associate, Peter Briggs, Partner and Ganur Maynard, Solicitor

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