Recent VCAT decision sets out the limits to when a planning permit can be amended

The Victorian Civil and Administrative Tribunal (VCAT) has considered the limits to when a permit can be amended under section 87A of the Planning and Environment Act 1987 (the Act) in the recent decision in Alkero Development Pty Ltd v Stonnington CC (Red Dot) [2018] VCAT 1120 (Alkero).

This decision provides useful guidance to developers wanting to make changes to an existing permit and helps to clarify when a permit can be amended to allow a development which would be otherwise prohibited under the planning scheme.

Partner, Meg Lee and Lawyer, Zina Teoh discuss key takeaways from this decision.

Background

A permit was issued in 2014 by the Tribunal for the construction of buildings and works for an aged care facility in South Yarra. At that time, a permit was not required for the use of land for aged care facility purposes under the scheme.

In 2017 the applicant applied to amend the 2014 permit for buildings and works which would to enable the development to be used for multiple dwellings.[1] No permit was required for the use of the land for dwellings under the scheme.

The Tribunal found it could not grant the amendment under section 87A on the basis that:

• the amendment amounts to a transformation of the proposal allowed by the 2014 permit;
• certain aspects of the proposal are prohibited under the mandatory height limits in the current scheme, and exceed the height of the development for which there are accrued rights under the 2014 permit under section 28(2) of the Interpretation of Legislation Act 1984.

Transformation or amendment?

The Tribunal found that the changes sought in the amendment application to enable the development to change from an aged care facility to multiple dwellings amounted to “transformation” of the permit. In coming to its decision, the Tribunal acknowledged that the power to amend a permit under section 87A is a very wide power. The limit to this power, as described by the Supreme Court in Addicoat v Fox (No 2) [1979] VR 347, is:

“whether from a town planning perspective what is proposed is a modification of what the permit allows, or alternatively a transformation into something different. If it is the latter it goes beyond the jurisdiction conferred by section 87A and requires a new application for permit with all the statutory process that entails.”

In determining whether the proposed amendments constitute a transformation of the 2014 permit, the Tribunal found that it was relevant to consider the change of use of the proposal, despite the fact that a permit is not required for use of the subject site as either the aged care facility or for multiple dwellings. This is because the use of the development dictates the form and layout of the buildings, and it was the use which forms the basis on which the permit for buildings and works was granted in 2014.[2]

The Tribunal found that residential aged care facility and dwellings are treated differently in the planning scheme. This is explicitly stated under clause 16.02-4 which “specifically deals with the design and location of residential aged care facilities and recognises that residential aged care facilities are different to dwellings in their purpose and function, and will have a different built form.”[3]

Because of these differences, the Tribunal found that “the right to construct buildings and works for an aged care facility is fundamentally different to the right to construct buildings and works for a multi-dwelling development.”[4] Accordingly, the amendment was considered a transformation of the existing permit and outside the scope of what could be permitted under section 87A.

Amendments to allow a prohibited use or development?

Since the permit was granted in 2014, a number of amendments to the planning scheme had occurred, including rezoning of the subject site. These amendments meant that the 2014 permit could not be granted if it were applied for today, and that the amendments sought to the permit would contravene the planning scheme (including exceedance of the height controls in the General Residential Zone – Schedule 5 (GRZ5) and the Design and Development Overlay – Schedule 3 (DDO3)). Accordingly, the Tribunal in Alkero considered the circumstances in which a permit could be amended to allow a development which would otherwise be prohibited under the planning scheme.

The starting point for the Tribunal was section 28(2)(e) of the Interpretation of Legislation Act 1984 which provides that the rights accrued under a permit are protected even when the planning scheme changes.

The Tribunal then drew upon the reasoning in Fosters Group Ltd v Mornington Peninsula SC [2010] VCAT 104 which examined accrued rights under a permit relating to the use of the land. In that case, the accrued rights created by a permit meant that a permit granted for a use can be amended even after the scheme has changed and the use is then prohibited. This right does not, however, extend to allowing a new prohibited use to be permitted, as this would result in circumvention of the planning scheme.[5]

Extending the Fosters Group case reasoning relating to use to a permit relating to development, the Tribunal in Alkero found that:

“amendments to the development that do not exceed the accrued right, even though still prohibited by the planning scheme, could be permitted, but an amendment that exceeds or goes beyond the extent of the accrued right would not be permitted.”[6]  

Accordingly, in determining whether an amendment which would contravene the planning scheme can be permitted under section 87A, it is necessary to consider what rights are accrued under the permit. Distinguishing the decision in Caydon High Street Development Pty Ltd v Darebin CC [2017] VCAT 1422, the Tribunal noted that when examining the accrued rights under a permit, the “nature of the accrued right must be determined by reference to the permit itself, not by what may have been lawfully approved at the time of the permit.”[52].

In the Alkero decision, the amendments proposed for certain parts of the building exceeded the mandatory height controls in the GRZ5 and DDO3. Exceedance of the height controls in the DDO3 could be permitted, because of the accrued rights under the permit in relation to the DDO3. However, no such rights had been accrued in relation to the GRZ5 height controls, and therefore the amendment application was not permitted under section 87A.

Conclusion

While the application to amend the permit was refused, the Tribunal ultimately granted an extension of time to complete the works under the 2014 permit, which means that the aged care facility originally proposed can still be built over the next few years.

The Tribunal’s reasoning in Alkero relating to the legal scope of section 87A should be noted as providing clear guidance that amendments to a permit to facilitate works which would be prohibited under the planning scheme can only be granted if the amendments do not exceed the rights accrued under the planning permit.

Additionally, analysis of the change of use proposed by the amendment application adds to the body of cases which help to draw a line as to what constitutes a valid amendment or a prohibited transformation of a permit for the purposes of section 87A.  The case also reminds an applicant that, even if the amendments are considered to fall within the scope of 87A, for the Tribunal to grant an application for amendments to a permit, it must also be satisfied that the proposal represents an acceptable planning outcome on the planning merits.

Authored by:
Meg Lee, Partner
Zina Teoh, Lawyer

[1] The proposed amendments would involve a significant change to the building envelope, addition of two new levels (although no change in the overall maximum height to the top of the roof) and provision of further carparking.

[2] paragraph[20]

[3] paragraph [22]

[4] paragraph [24]

[5] paragraphs [38]-[42].

[6] paragraph [44]