Supreme Court tightens the screws on judicial review limitation periods

In Western Australia, where there are no third-party rights of merits review in respect of planning decisions, if a third-party objector wishes to challenge a decision to grant a development approval, then the third-party will be required to commence judicial review proceedings in the Supreme Court.  The Supreme Court may set aside a grant of development approval if it is shown that the decision-maker made some fundamental legal error in making their determination.

 

 

Order 56 in the Rules of the Supreme Court 1971 (WA) gives a rather generous 6 month limitation period for judicial review proceedings to be commenced.  In circumstances where the standard substantial commencement period for a development approval in Western Australia is only 2 years, this practically means that most development approvals will be at risk of legal challenge for a full quarter of their period of validity.

With this timing in mind, it is not uncommon for developers to wait out the initial 6 month judicial review limitation period before taking any significant steps towards implementing a development approval, on the logic that resources may be unnecessarily wasted if a development approval is ultimately challenged.  If a developer takes this approach, and there is no judicial review proceeding commenced, it may leave them with only 18 months to achieve substantial commencement, which is not a lot of time, especially for more significant proposals.

This commercial reality in turn creates an incentive for third-party objectors to strategically wait until the last day of the 6 month limitation period before commencing judicial review proceedings in the Supreme Court, because they will likely realise that maximising the time delay associated with a legal challenge will hurt the developer commercially and decrease the likelihood of a development approval being implemented (regardless of the outcome of the Supreme Court proceedings).

The position as outlined above may however now be a thing of the past, following the decision of the Supreme Court in General Nominees Pty Ltd (ATF Family Trust Four) v The Metro Inner-North Joint Development Assessment Panel [2022] WASC 114, which involved an application for judicial review in relation to a development approval for a proposed residential development in Mount Lawley.

In this matter, a third-party objector, despite having closely followed the progress of the development application, only commenced Supreme Court proceedings on the final day of the 6 month limitation period.  In the meantime, the developer had taken significant steps towards implementing the development approval, including by pre-selling a number of proposed apartments and entering into a building contract.

Although the Supreme Court had otherwise determined that the decision-maker had not made any legal error in granting development approval, the Supreme Court found that even if legal error had occurred, it would have declined to overturn the development approval on discretionary grounds, owing to what was, in the circumstances, an unreasonable delay in commencing proceedings.  In coming to this conclusion, the Supreme Court made findings that there was no reasonable explanation for why it took the third-party objector so long to commence proceedings and that had the proceedings been commenced earlier, commercial prejudice to the developer would have been avoided.

This conclusion is significant, in the sense that even though the third-party objector strictly speaking complied with the limitation period, the Supreme Court still found that the delay was unreasonable in the circumstances, such that relief should be denied.  The Supreme Court in its reasons stated that the 6 month period needs to be approached as a maximum (as opposed to a yardstick) and that it is incumbent upon third-party objectors to commence judicial review proceedings in respect of development approval decisions expeditiously.

There are important lessons to take from this decision of the Supreme Court.  A developer who is on the receiving end of an application for judicial review to challenge their development approval, which has been commenced close to the end of the 6 month limitation period, should considering opposing the challenge on grounds including that the delay in commencing the proceedings was unreasonable in the circumstances.  Equally, if development approval is granted in circumstances where a third-party challenge is considered likely, there is probably no pressing need to wait out the 6 month limitation period before implementing the development approval, as any failure on the part of an objector to commence proceedings whilst such steps are being taken would be taken into account by the Supreme Court in exercising its discretion on whether or not to grant relief.

On the other hand, any third-party objector who is considering the commencement of judicial review proceedings in the Supreme Court to challenge a grant of development approval should aim to commence proceedings as soon as is practicable.  Waiting to commence proceedings towards the conclusion of the 6 month limitation period would give rise to a risk of the challenge being rejected on discretionary grounds.