Substantial Commencement – When does a planning permit lapse?
If you have a planning permit that provides for use and / or development, it is important that you understand when that permit lapses. If the permit expires before it is implemented, then the right to use / develop the land is lost. This can have serious financial and timing implications for a project.
Alternatively, if ‘substantial commencement’ is achieved, there is no longer a timeframe to fully implement the permit. The right to develop the land, in accordance with the permit, crystallizes.
Until the recent decision of Tarkine National Coalition Incorporated v Director, Environment Protection Authority (2023) TASSC 3 (Tarkine National Coalition Incorporated v Director, Environment Protection Authority), the concept of substantial commencement had not been considered by the Courts in Tasmania. Unfortunately, the Supreme Court’s decision may be of limited assistance given it turns on the facts and the specifics of that mining project. In our experience, this issue often arises in respect of large subdivisions or commercial projects so the absence of discernable principles or rules may prevent its broader application.
Determining if enough steps have been taken to establish substantial commencement can be fraught. This highlights the need for independent advice and caution when relying on Council guidance.
Timeframe and lapse of permit
A planning permit must be substantially commenced within two years from the date it was granted. Failure to achieve substantial commencement within this timeframe will result in the permit lapsing. However, it is important to note that under certain circumstances, an extension may be granted, allowing for an extended timeframe of up to six years.
The grant of an extension is at the discretion of the Council and a refusal to grant the extension is difficult to challenge.
Supreme Court decision
Tarkine National Coalition Incorporated v Director, Environment Protection Authority involved an approved development of an open-cut hematite mine. The approval provided for construction or installation of equipment for the crushing, screening and drying of mined ore, and for its loading onto trucks, as well as the construction of “infrastructure including parking, workshops, ablutions, potable and non-potable water tanks, diesel powered generators, storage buildings and areas, and re-fuelling zones”.
The Supreme Court held that substantial commencement had occurred. The following actions influenced the Court’s decision:
- Undertaking testing of ore to determine its composition and quality;
- Taking delivery in Australia of major equipment items and components for the processing plant; and
- Clearing a specific area of land at the mine site to facilitate the installation of various structures and facilities.
The decision provides insight into the types of activities that may be considered substantial commencement, such as testing, delivery of major equipment, and site preparation. While this decision largely turns on its facts, it is of note that such works / actions may not previously have been thought to be sufficient.
Unfortunately, there are no discernable principles that can be easily applied to other proposals.
Council’s advice is not determinative
There is no statutory power for Councils to grant a certificate or the like, to provide certainty that substantial commencement has been achieved.
While a prudent proponent or consultant would engage with the relevant Council in considering whether substantial commencement has occurred, the Council’s opinion is not determinative. There are serious repercussions for a proponent that implements a planning permit, after it has lapsed, in reliance of the advice of the Council without independent legal advice. A proponent could find itself in a legal challenge with a third party asserting that the works were not undertaken lawfully.
There has been at least one recent example of a Tasmanian Council making a public statement regarding whether substantial commencement had been achieved for a controversial project. Such an approach provides no protection from a third party challenge to a project.
Importance of careful consideration
For proponents and experts involved in development projects, it is crucial to carefully evaluate the steps taken to determine whether substantial commencement has occurred. It is essential to remember that each case will be assessed based on its individual circumstances.
Recommendations for proponents / consultants:
- The planning permit must be substantially commenced within two years to avoid it lapsing, unless an extension is granted.
- An extension is not guaranteed and a refusal by Council to grant an extension is difficult to challenge.
- The recent case of Tarkine National Coalition Incorporated v Director, Environment Protection Authority sheds light on what constitutes substantial commencement but unfortunately fails to provide a set of principles or rules that can be applied to other situations.
- Substantial commencement is determined on a case-by-case basis, taking into account the specific actions and activities undertaken.
- Relying solely on Council advice regarding substantial commencement is not advisable, as it may change, and challenges from third parties are possible.
- It is recommended to seek independent legal advice and consider applying for an extension if available. Ensure you take advice promptly.
The implications for proponents and consultants of getting it wrong are significant. It may delay a project, blow out budgets and in serious circumstances, prevent the proposal proceeding altogether.
More information
If you have any queries or would like further information regarding this update, please contact:
Anthony Spence SC
Principal
M: 0400 545 503
E: aspence@pageseager.com.au
Sarah Wilson
Special Counsel
M: 0428 102 712
E: swilson@pageseager.com.au
