Not in my backyard! The role (and limits) of community submissions to proposed development

Mark Evans • February 15, 2024

This article explores the role of public participation in NSW planning and the appropriate weight that ought to be given to community submissions in the evaluation of the merits of a development proposal.

Introduction

Meaningful community involvement can be beneficial in the development assessment process. Public participation in the process carries with it a responsibility not to abuse that right, nor to place self-interest above the broader interests of the community.

Public participation in environmental planning and assessment is enshrined in the objects of the Environmental Planning and Assessment Act 1979 (EPA Act) in section 1.3(j):

1.3 Objects of Act

(cf previous s 5)

The objects of this Act are as follows—

…

(j) to provide increased opportunity for community participation in environmental planning and assessment.

Zooming out, it becomes obvious that community participation is only one of a number of objects of the EPA Act. For example, other notable objects are to facilitate ecologically sustainable development, to promote the orderly and economic use and development of land and to promote the delivery and maintenance of affordable housing.

1.3 Objects of Act

The objects of this Act are as follows—

…

(b) to facilitate ecologically sustainable development by integrating relevant economic, environmental and social considerations in decision-making about environmental planning and assessment,

(d) to promote the delivery and maintenance of affordable housing,

…

(g) to promote good design and amenity of the built environment,

(h) to promote the proper construction and maintenance of buildings, including the protection of the health and safety of their occupants,

Unfortunately, as Council planning staff will be all too aware, the privilege of community participation can, on occasion, be abused. In the past, we have advocated for construction of boarding houses for the homeless that were bitterly opposed by neighbourhood community groups. “Laudable objectives, just don’t build it in our neighbourhood”. We have also fought for the upgrading of small supermarkets in towns crying out for infrastructure against small, vocal minority groups. We have personally witnessed 300+ page submissions by neighbours objecting to the construction of a granny flat in a backyard. Obviously, there is a role for community consultation and ill-considered development should be exposed. However, public participation must have its limits and public submissions must not be afforded undue weight in the assessment process.

The role of community submissions in the development process

A consent authority is to consider the matters set out in s 4.15 of the EPA Act as are of relevance to the proposed development. As seen below, public submissions are but one of many other considerations Council is to take into account.

4.15 Evaluation

(cf previous s 79C)

(1) Matters for consideration—general In determining a development application, a consent authority is to take into consideration such of the following matters as are of relevance to the development the subject of the development application—

(a) the provisions of—

(i) any environmental planning instrument, and

(ii) any proposed instrument that is or has been the subject of public consultation under this Act and that has been notified to the consent authority (unless the Planning Secretary has notified the consent authority that the making of the proposed instrument has been deferred indefinitely or has not been approved), and

(iii) any development control plan, and

(iiia) any planning agreement that has been entered into under section 7.4, or any draft planning agreement that a developer has offered to enter into under section 7.4, and

(iv) the regulations (to the extent that they prescribe matters for the purposes of this paragraph),

(v) (Repealed)

that apply to the land to which the development application relates,

(b) the likely impacts of that development, including environmental impacts on both the natural and built environments, and social and economic impacts in the locality,

(d) any submissions made in accordance with this Act or the regulations,

(e) the public interest.

[our emphasis]

Public submissions should not be afforded undue weight in the evaluation of a development application and public participation should not be viewed as being adversarial.

In Morrison Design Partnership Pty Ltd v North Sydney Council [2007] NSWLEC 802 the Chief Justice of the Land and Environment Court (Preston CJ - speaking in the context of application for joinder to proceedings) stated clearly at [50] – [54] that the purpose of giving the public an opportunity to make submissions has its limits.

“50 To some extent, the application of the Owners Corporation misunderstands the purpose of public consultation and public participation. Meaningful community involvement can, of course, be beneficial in the development assessment process. It can provide members of the community with an understanding of what is happening in their area and how the proposed development may impact particularly on their interests; enable members of the community to participate by making submissions to the consent authority; inform the consent authority; and improve planning decisions.

51 Community consultation and public participation should not be viewed as being adversarial. The community and affected persons have no entitlement to be an adversary to the applicant for development consent in a contest as to whether or not development consent should be granted.

52 Community consultation and public participation under the Environmental Planning and Assessment Act are not intended to give the community or affected persons who object to development any entitlement to veto development. The planning scheme established by the Environmental Planning and Assessment Act vests in the relevant consent authority, and on an appeal this Court exercising the functions of the consent authority, the tasks of determining the matters of relevance to the development application; taking those matters into consideration as well as any submissions made in response to the consultation process; according weight to the matters as is considered appropriate; and reaching a merit determination.

…

54 The process of community consultation and public participation should also not be seen as an end in itself or as being more important than the ultimate merit outcome of a determination by a consent authority. The process of the community and affected persons being heard and making submissions is important, but there must be a limit to how long and detailed that process should be ... “

Conclusion

At the risk of repetition, the NSW Land and Environment Court has been clear that:

1. The process of community consultation and public participation is important, but there must be a limit to how long and detailed that process should be.

2. The community and affected persons have no entitlement to be an adversary to the applicant for development consent in a contest as to whether or not development consent should be granted.

3. The planning scheme established by the EPA Act vests in Council the task of determining the matters of relevance to the development application; taking those matters into consideration as well as any submissions made in response to the consultation process; according weight to the matters as is considered appropriate; and making a determination based on the merits of the proposal.

Recent decisions in the NSW Land and Environment Court and Court of Appeal provide a clear signal from the judiciary that public consultation and participation in the assessment process is only one of many factors a decision maker is to take into account. Further, once development consent is granted to a proponent, absent clear jurisdictional error, that person is entitled to rely on the consent and not be subjected to ongoing and expensive litigation.

Require further assistance? please do not hesitate to call us on (02) 9145 0900 or make an enquiry below.

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NSW Biodiversity Offsets for Councils

By Mark Evans • May 4, 2025

This article provides a general overview of the NSW Biodiversity Offsets Scheme, followed by a discussion of the tax implications of establishing a biodiversity stewardship site for Councils. What is the NSW Biodiversity Offsets Scheme? The NSW Biodiversity Offsets Scheme (the Scheme ) is a market-based scheme that is administered by the NSW Department of Climate Change, Energy, the Environment and Water ( Department ) and aims to help address the loss of biodiversity and threatened species in NSW. It seeks to do so by creating incentives for landowners to improve or maintain biodiversity values as a means of offsetting impacts on other areas. The Scheme is established by the Biodiversity Conservation Act 2016 ( BC Act ) . How the Scheme works Councils can establish a ‘biodiversity stewardship site’ ( Stewardship Site ) on eligible land within NSW by means of entering into a Biodiversity Stewardship Agreement ( Stewardship Agreement ) with the Department: s 6.17 BC Act. In doing so, Councils commit themselves to enhancing and protecting biodiversity values on the Stewardship Site. On execution of a Stewardship Agreement, the Council is entitled to receive an amount of biodiversity credits which are created by the Department. The amount of biodiversity credits are calculated by the Council’s accredited ecologist (and verified by the Department) in accordance with the methodology prescribed in the Biodiversity Assessment Method ( BAM ): s 6.7 BC Act. Biodiversity credits are created in respect of existing biodiversity values on the land and management actions to be carried out in accordance with the Stewardship Agreement. A biodiversity credit remains in force unless it is cancelled or retired: s 6.18 BC Act. The market value of the biodiversity credits is calculated by the Department at the time of creation. Sale and transfer of biodiversity credits Biodiversity credits may be sold by the Council to a buyer (or in parcels to a number of buyers) seeking to offset the impact of actions detrimental to biodiversity or to permanently secure conservation outcomes. The sale price of the biodiversity credits is determined by agreement between the Council and the buyer. Alternatively, biodiversity credits may be used by Council to offset negative biodiversity impacts arising from an activity carried out under Part 5 of the Environmental Planning and Assessment Act 1979 : s 7.15 BC Act. The Council may transfer biodiversity credits to a buyer or third party: s 6.19 BC Act. The transfer is made through an application to the Department by the parties to the transfer. The transfer is not effective until the transfer is authorised by the Department and registered in the register of biodiversity credits: s 6.20 BC Act. On the registration of the first transfer of the biodiversity credits, the Total Fund Deposit ( TFD ) specified in the Stewardship Agreement (or a proportion, if not all the credits are transferred) is required to be paid by the buyer of the biodiversity credits into the Biodiversity Stewardship Payments Fund (the Fund ): s 6.21 BC Act. The TFD is a fixed amount of money used to cover the long-term management costs of a Stewardship Site. It is a calculated value representing the present value of future payments needed to fund the agreed management actions. Contracts for the sale of biodiversity credits between the Council and purchasers will state that the credit owner is entitled to the full amount of the agreed sale price of the biodiversity credits, including the TFD, and that the credit owner will have the obligation to pay the TFD. Once the credits have been ‘used’ to offset negative biodiversity impacts and to permanently secure the conservation of biodiversity, they are ‘retired’ such that they can no longer be used for any other purpose: s 6.27 BC Act. Annual payments are made out of the Fund to the Council in respect of management actions carried out in accordance with the Stewardship Agreement: s 6.34 BC Act. Management actions typically include obligations to fence areas of land, control exotic pest species, carry out bushfire management and weed management. In summary, annual payments made out of the Fund can help Councils meet the expenses they currently incur managing large tracts of land while achieving significant biodiversity conservation outcomes. Disclaimer This is a general overview of the Scheme and tax implications. The information in this article is general in nature and is intended as a guide only. It is not designed to be, nor should it be regarded, as legal or accounting advice. The business and financial structure for each landholder or entity managing a biodiversity stewardship site or conservation area is likely to be unique. Therefore, the way taxation law applies will depend on individual circumstances and you should consult a professional tax adviser before engaging with the Scheme or entering into a Stewardship Agreement. Capital Gains The ATO deems that a capital gains event (type D4) occurs on entry into a Stewardship Agreement: s 104-47(1) ITAA. The landowner makes a capital gain if the “capital proceeds” are more than that part of the “cost base” of the land that is apportioned to the covenant. Most state and federal government departments, including local councils are tax exempt: s 50.25 ITAA. GST on entry into Stewardship Agreement When the Department and the Council enter into a Stewardship Agreement, the Council makes a taxable supply by entering into the agreement in return for the biodiversity credits issued by the Department and the Department makes a taxable supply of biodiversity credits in return for the Council entering into the agreement. These are non-monetary transactions. The Department and the Council (if both are registered for GST): are required to pay GST in respect of their supply, calculated on the estimated value of the credits; and can claim an input tax credit (ITC) in respect of the tax invoice received from the other party. If a Council is registered for GST, the Department will issue a Department GST invoice and Recipient Created Tax Invoice (RCTI) on behalf of the Council when the Department sends the registered BSA to the Council. The Department will use the estimated market value of the biodiversity credits for the purposes of these invoices. As the GST payable and the input tax credit that can be claimed are the same amount, the net GST position for both the Council and Department is zero. This means that these invoices do not need to be paid. However, both the Department and the Council are required to account for the GST payment and the input tax credit in their business activity statements (BAS). Capital gains from sale or transfer of credits A CGT event (type A1) occurs upon the sale of biodiversity credits. The Council may make a capital gain or loss depending on the capital proceeds and cost base of the credits: s 104-10(4) of the ITAA. A biodiversity credit constitutes a CGT asset: s 108-5 of the ITAA. CGT event (type A1) happens when the Council disposes of biodiversity credits: s 104-10 of the ITAA. Most state and federal government departments, including local councils are tax exempt: s 50.25 ITAA. GST on sale of biodiversity credits For the purposes of GST, the sale of credits is a taxable supply of goods. This means that the biodiversity credit price should include GST that the Council then needs to pay to the ATO. Receipt of annual payments from the Biobanking Trust Fund Annual payments from the Fund made by the Department to the Council are a contractual payment for the performance of services and should be ordinary income and assessable for income tax purposes. Most state and federal government departments, including local councils are tax exempt: s 50.25 ITAA . GST on annual payments The supply of stewardship services by the Council to the Department in return for payment of the annual payment should be a taxable supply. The Department will issue a recipient created tax invoice (RCTI) and include an amount for GST when making the annual stewardship payments for management actions the Council delivers. Conclusion Councils can establish biodiversity stewardship sites on eligible land within NSW by means of entering into a Biodiversity Stewardship Agreements with the Secretary of the Department. On execution of a Stewardship Agreement, the Council is entitled to receive an amount of biodiversity credits. Biodiversity credits may be sold by the Council to a buyer seeking to offset the impact of actions detrimental to biodiversity or to permanently secure conservation outcomes. Biodiversity credits may be used by Council to offset negative biodiversity impacts arising from an activity carried out by Council. Some of the proceeds of the sale of biodiversity credits must be paid into the Fund to cover ongoing management actions and costs. Annual payments are made out of the Fund to the Council in respect of management actions carried out in accordance with the Stewardship Agreement. Management actions typically include obligations to fence areas of land, control exotic pest species, carry out bushfire management and weed management. In summary, annual payments made out of the Fund could help Councils meet the expenses they currently incur managing large tracts of land while achieving significant biodiversity preservation outcomes. Disclaimer This is a general overview of the Scheme and tax implications. The information in this article is general in nature and is intended as a guide only. It is not designed to be, nor should it be regarded, as legal or accounting advice. The business and financial structure for each landholder or entity managing a biodiversity stewardship site or conservation area is likely to be unique. Therefore, the way taxation law applies will depend on individual circumstances and you should consult a professional tax adviser before engaging with the Scheme or entering into a Stewardship Agreement.

NSW Planning System: Navigating Land and Environment Court

By Mark Evans • March 20, 2025

Expert Legal Insights on Development Approvals and Appeals with Planning Lawyer Mark Evans

Physical Commencement of Development Consents – Part Two

By Mark Evans • February 27, 2025

Development consents granted after 15 May 2020 face stricter requirements to determine whether they are substantially commenced and thus remain valid. This article reviews recent case law in New South Wales (NSW) and outlines the types of work that can qualify as physical commencement.