In this article, we examine a recent Court decision, Fabemu (No 2) Pty Ltd v Kiama Municipal Council [2023] NSWLEC 79, where the Court ultimately found that borehole testing was not sufficient to lawfully physically commence a development consent because a pre-condition in the consent conditions had not been satisfied.

If you would like to read more about physical commencement, see our May 2023 article in the link below:

Lapsing of development consents what constitutes physical commencement

Key points

• All pre-conditions in a development consent required to be satisfied before work commences must be satisfied for the relevant work to constitute a ‘lawful’ physical commencement of the consent.
• The onus is on the Applicant to establish all pre-conditions have been satisfied.
• For consents granted after 15 May 2020, drilling bore holes, amongst other preparatory works set out in section 96(1) of the Environmental Planning and Assessment Regulation 2021, is no longer sufficient to constitute physical commencement.

Background

In Fabemu (No 2), the Applicant sought a declaration that its development consent granted in 2016 for the construction of a large, luxury dwelling at 242 Fern Street, Gerringong had been physically commenced having regard to engineering work carried out on site.

The approved development comprises 11 bedrooms and basement parking for 19 vehicles.

Owing to amendments introduced into the Environment Planning & Assessment Act 1979 (EP&A Act), the development consent will lapse on 23 October 2023 unless lawfully physically commenced prior to that date.

In mid-2020, the Council notified the Applicant that it planned to extend a popular coastal walking track in a manner which would likely impact the property. Since Council had not yet settled on a route for the proposed path extension, the potential impact on the property was unclear. Given that the property was intended to be a luxury development if the path came close to the property it would likely interrupt the privacy and amenity for which the site was selected. It was possible that the property (or part of it) would be compulsorily acquired by the Council. On that basis, the Applicant decided to delay construction of the approved dwelling until finalisation of Council’s proposal.

However, the Applicant wished to achieve lawful physical commencement of the consent so it would not lapse.

Borehole testing can constitute “engineering work” for the purpose of physical commencement

The Court accepted the well-established principles set out by Tobias JA in Hunter Development Brokerage Pty Ltd v Cessnock City Council; Tovedale Pty Ltd v Shoalhaven City Council (2005) 63 NSLWR 124 (Hunter Development) that preparatory work which is a necessary step to enable the approved development to be carried out can be work sufficient to constitute “building, engineering or construction works” for the purposes of physical commencement.

Importantly, the Court observed that the position in Hunter Development may be of less relevance for development consents granted after 15 May 2020 because the following work is now expressly excluded from constituting physical commencement by clause 96 of the Environmental Planning and Assessment Regulation 2021:

• Creating a borehole for soil testing.
• Removing water or soil for testing.
• Carrying out survey work, including the placing of pegs or other survey equipment.
• Acoustic testing.
• Removing vegetation as an ancillary activity.
• Marking the ground to indicate how land will be developed.

Satisfaction of pre-conditions

While the Court accepted that the seven boreholes were “engineering” work consistent with the decision in Hunter Development, the Court found the work was not “lawfully” carried out because not all of the pre-conditions in the consent were satisfied prior to that work occurring.

Critically, condition 4, being a “general” condition of the consent, provided:

“The developer must provide a traffic control management plan complying with the design requirements of the Roads and Maritime Services (RMS) “Traffic Control at Work Sites” manual. The traffic control management plan must be designed by an RMS accredited designer and must be provided to and approved by Council prior to the commencement of any works.” (our emphasis).

The Applicant argued that condition 4 relates to construction works to ensure that there is safe access and egress to the site and that “as a matter of logic, the condition does not apply to preparatory works as those works do not generate sufficient traffic to warrant a traffic control management plan”: see [74].

No such traffic management plan had in fact been provided to and approved by Council prior to the borehole works occurring.

The Court found this was an “insurmountable barrier” to finding that the borehole drilling had lawfully physically commenced the consent.

Condition 4 referred to the need for the plan prior to the commencement of “any works”. Accordingly, it needed to be satisfied prior to the borehole drilling.

Because it was not satisfied, the Court found the borehole drilling did not lawfully physically commence the consent.

Important reminders

1. It is absolutely essential that all pre-conditions to works being carried out are in fact satisfied. Much will turn on the words used in the pre-condition. If you are unsure, seek advice on what conditions must be satisfied prior to work occurring.
2. For consents granted after 15 May 2020, survey work (amongst other preparatory work) is excluded from the work that can be carried out to achieve physical commencement.