Last year, the ACT Government controversially sought to prevent objections being made by third parties against major projects – for example, the major “light rail” project. This was to be done by defining areas as “special precinct[s]”. The proposal “provoked significant public opposition… and sparked a bitter debate in the ACT Assembly”,[1] forcing the government to back down.

Fast forward to 2015, and very similar legislation has recently been enacted to do pretty much the same thing. Under the guise of specifically facilitating the planning and construction of the light rail project, development applications “related to light rail” can bypass the conservator of flora and fauna, and indeed any other entity that may have an interest, as well as any interested third party.

Projects “related to light rail” are said to include any development considered as facilitating the construction, ongoing operation and maintenance, repairs, refurbishment, relocation or replacement of light rail track or infrastructure within 1km from the existing or proposed light rail track, which is mainly down Canberra’s central “Northbourne Avenue” route. Additionally, the Territory can declare a certain development to be related to light rail… which probably means that speculation and concern about the future of the heritage “Northbourne Flats” is unlikely to be resolved in a court of law.

And this has not been the only controversy in the difficult exercise of balancing development against the amenity of the community, or against opposing business interests. The High Court has entered the fray, recently declaring that “economic interests” are adequate to establish standing in ACT development appeals.

In this Property Reporter, Moulis Legal takes a closer look at the divisive issue of third party development appeals in Canberra.

A limited right of appeal under legislation

Under ACT law, a person who has made a representation in response to a development application has the right to appeal an approval given to that application in certain instances. These include:

• an approval in what is known as the “merit track”, where the application is publicly notified and is not exempted by regulation;
• an approval in the “impact track” as long as the application is not exempted by regulation; and
• an approval given on reconsideration, but again only if the application is not exempted by regulation.

Exemptions from appeals include proposals relating to:

• development on land in the city centre, a town centre, an industrial zone, or the Kingston Foreshore;
• development on CZ1 (Core Zone), CZ2 (Business Zone) or CZ3 (Services Zone) land in a group centre that is not intended to be any higher than any of the buildings that currently exist in the area;
• development on land in a transport and services zone if the land is at least 50m from a residential zone and would not result in hazardous waste, an incarceration facility or land fill;
• erecting or displaying a sign or advertisement on land or a structure.

These exemptions are advantageous for developers. They reduce public interference, which in turn reduces the risks of construction delay and associated costs.

Additionally, the important “standing requirement”, which must be satisfied by any intending objector, is that the approval concerned may cause the objector “material detriment”. This is defined under the legislation to mean that the approval could have an adverse impact on the objector’s use or enjoyment of land. In the case of corporate “interest group” objectors, standing can be based on the fact that the approval relates to a matter included in its objects or purposes.

The current legislative right of appeal is much narrower than the right that had previously been afforded to third parties. “Material detriment” was not required. Instead, any person “affected” by the approval concerned could bring an appeal. The current provision is overtly developer-friendly, forcing a third party to have a more direct and tangible concern in order to establish standing.

Community concern about the local shops is not a material detriment

What is material detriment? The ACT Civil and Administrative Appeals Tribunal (“ACAT”) has narrowly interpreted the “material detriment” requirement, often denying third parties the relevant standing to appeal.

The early case of Mcullough and ACT Planning and Land Authority[2] was an appeal by local members of the community against the development of residential apartments. ACAT (at the time known as the Administrative Appeals Tribunal of the ACT) said that it was to be “expected” that members of the community would be able to show the necessary interest in a proposal that sought to change the type of activity that could be carried on at the local shops. However, in this case standing was denied:

No visual impact, effect of noise, smell, traffic or other impact of a planning nature has been identified. No suggestion has been made that the changed use proposed for the subject block or the proposed development will interfere with the objectors’ present use of the facilities available at the Red Hill shops…

This early case was one of a number that set the tone for the denial of standing in many other cases that followed. No doubt this case and cases like it have also had a strong demoralising effect on the desire of objectors to take their grievances further.

In Watson v ACT Planning and Land Authority,[3] the third party objected to the construction of a two storey building on the basis that he would suffer material detriment due to “safety concerns” related to a lack of off-street public parking. He claimed that significant plant beds and mature trees and shrubs would be lost, and that the development would fail to “recreate an inviting commercial/community focus” on the land due to a lack of replacement landscaping.

ACAT found that even though the objector had some sense of grievance about the development proposal he did not establish a special interest or disadvantage sufficient to constitute “material detriment”. The Tribunal said that a “material detriment” was something that was real, was not of a trivial or imaginary kind, and was maintained in an objective and reasonable sense.

Mosque proposal also fails to create material detriment

Concerned Citizens of Canberra v Chief Planning Executive (Planning and Land Authority)[4] is a current and highly publicised third party appeal relating to the construction of a mosque in Gungahlin. The 500 person capacity mosque was approved by ACTPLA in 2012. A community group labelling itself as “Concerned Citizens of Canberra Inc.” appealed the approval. The ACT Supreme Court dismissed the challenge, finding that the community group had no standing to challenge the decision. The Supreme Court found that the community group did not exist at the time the approval was given, and that the association’s objects – “to preserve the spirit and character of Canberra… through education, public awareness and lobbying” – were too vague to establish some sort of connection with the development proposal at hand. Moreover, the community group did not have standing on the basis of its spiritual or cultural values, because an incorporated association cannot have religious or spiritual beliefs.

Material detriment requires a specific interest

Cases where standing has been achieved have been based on proof of genuine material detriment through some specific interest in the proposed development. An example of this was the case of North Canberra Community Council Inc. v Commissioner for Land and Planning.[5] The third party in this case appealed an approval in Braddon to remove the concessional status of a Crown lease. A concessional Crown lease is usually granted for less than market value, and can allow the Territory to provide community and social facilities of benefit to the community. It was argued by the Community Council that removing the concessional status of the leases would affect the “social and environmental well-being of the North Canberra resident community” and “the interests of the North Canberra resident community”. The Administrative Appeals Tribunal accorded standing to the objector because, based on the Community Council’s objects and purposes, material detriment would or could be suffered.

And “money” is now a recognised specific interest…

A dispute over a shopping centre redevelopment at the Giralang shops has confounded previously held views that competitors do not have standing to complain about nearby developments that would affect their business interests. In 2011, in Argos Pty Ltd and Ors v Corbell and Ors, a group of third parties lodged an appeal against a Ministerial approval of a development involving a Woolworths supermarket, retail outlets, restaurant and car parking on land at the Giralang local centre. The third parties included several Canberra businesses and rival supermarkets in the nearby suburbs of Kaleen and Evatt.

At first instance, the ACT Supreme Court[6] held that the interest of the local supermarket operators was simply that the increased competition provided by the development would have an effect on their profitability. This, it was held, was “too remote” to make them “persons aggrieved” by the approval.

The ACT Court of Appeal agreed that the proposed development gave rise to an interest in trade competition only, and dismissed the appeal.[7] In addressing the objectors’ argument that they had an interest in the maintenance and integrity of the hierarchy of the Territory Plan, the Court said that this was “no different to any other person of the ACT”, and that this meant that the proposed development did not affect the objectors to an extent greater than the general public.

The objectors took their protest to the High Court. The High Court agreed that the “economic interests” of the local supermarket operators were adequate to make them persons who could suffer a material detriment. [8]

Although other jurisdictions – and the ACCC – have shunned the idea that purely competition-related concerns can ground standing in third party planning disputes, the High Court’s decision in the Argos case makes sense in the Canberra legal context. The Territory Plan does have a hierarchy of planning levels, which broadly seeks to arrange big shops in some places, and little ones in others. Thus, a concern for a competitive balance emanates from the Territory Plan itself. The Territory is backpedalling as fast as it can from strict hierarchical planning, and has largely disbanded its supermarket policy – but not fast enough for the High Court to refuse standing to a group of competitors whose “material detriment” from a breach of the Plan would be felt solely in their cash registers.

Productivity Commission’s views on third party appeals

The Productivity Commission’s 2011 report “Performance Benchmarking of Australian Business Regulation: Planning, Zoning and Development Assessments” acknowledged that “possible frivolous or anti-competitive claims” by third parties aggravated project delays and that they should be limited.[9] Some of the report’s recommendations included:

• that third party appeals should not be available where the applications are “wholly assessed against objective rules and tests” and in any case should only be provided for in limited circumstances; and
• that where possible, reviews of decisions should be assessed against the same objective rules as were used in the initial decision.[10]

The bottom line

Up to now, the ACT has very definitely moved in the direction suggested by the Commission – to only allow planning appeals in limited cases. In most cases this should allow developers, once they get their approvals, to get the job done. By way of comparison, the Commission reported that Victoria allows a broader range of third party appeals – permitting “any party in almost all cases” to appeal.[11]

The High Court’s recent incursion is likely to embolden business competitors in the ACT to argue competition-related grievances in the tribunals and courts that are available to them. And if the definition of “light rail project” extends too far afield, we might expect residential communities along the route to step up their political opposition to the impacts of this major infrastructure project.

How the local government responds to these new pressures will be of great importance to pro- and anti-development interest groups in the ACT.

This memo presents an overview and commentary of the subject matter. It is not provided in the context of a solicitor-client relationship and no duty of care is assumed or accepted. It does not constitute legal advice.

© Moulis Legal 2015

For more information, please contact Daniel Moulis on +61 2 6163 1000 or daniel.moulis@moulislegal.com.

[1]  The Canberra Times, “ACT’s fast-track planning laws withdrawn”, 9 May 2014. See http://www.canberratimes.com.au/act-news/acts-fasttrack-planning-laws-withdrawn-20140509-zr7b0.html

[2]  Mcullough and Act Planning & Land Authority & Anor [2003] ACTAAT 50 (3 November 2003).

[3] Watson v ACT Planning and Land Authority & Ors (Administrative Review) [2010] ACAT 5 (5 February 2010).

[4] Concerned Citizens of Canberra v Chief Planning Executive (Planning and Land Authority) [2014] ACTSC 165 (4 July 2014).

[5] North Canberra Community Council & Moraska-Ahearn and Commissioner for Land & Planning [2000] ACTAAT 6 (14 March 2000).

[6] Argos Pty Ltd and Ors v Simon Corbell, Minister for the Environment and Sustainable Development and Ors [2012] ACTSC 102 (6 July 2012).

[7] Argos Pty Ltd and Ors v Corbell and Ors [2012] ACTCA 45 (6 November 2012).

[8] Argos Pty Ltd v Corbell, Minister for the Environment and Sustainable Development [2014] HCA 50 (10 December 2014).

[9] Australian Government Productivity Commission, Performance Benchmarking of Australian Business Regulation: Planning, Zoning and Development Assessments, April 2011, at page 86.

[10] Ibid.

[11] Ibid, at page 87.