For well over 40 years, since inception of the Environmental Planning & Assessment Act 1979 (EPA Act) and The Land and Environment Court of NSW, public participation has been a key aspect of planning decisions. The EPA Act mandates public notification for most planning instruments and development applications and requires consent authorities to consider submissions when determining development applications.

Such considerations are also required in Class 1 merit Appeals in the Land and Environment Court and submitters are given the opportunity to present evidence of their objections (which are advocated for by consent authorities as the respondent in such proceedings) during court hearings and court facilitated conciliation conferences.

With the significant increase in conciliated outcomes from the Land and Environment Court, many submitters dissatisfied with the outcomes have sought to closely scrutinise those outcomes, seeking to have them overturned by the NSW Court of Appeal.

Most recently in the case of Joseph v Spencer [2026] NSWCA 46, the NSW Court of Appeal confirmed that development approvals granted through Land and Environment Court conciliation will be difficult for submitters to overturn.

Facts

Ricardo and Jennifer Spencer owned residential land at Kiama Downs fronting the foreshore. In 2023 they lodged a development application (DA) with Kiama Municipal Council seeking approval for alterations and additions to their dwelling, including decks and balconies extending into that part of their land was mapped as being in a foreshore area.

Michael Joseph, an adjoining neighbour, objected to the DA on several bases including impacts on views and that the proposal contravened cl 6.7 of the Kiama Local Environmental Plan 2011 (KLEP), which does not allow development forward of the foreshore building line unless specified exceptions apply.

The DA was the Spencers’ second attempt at seeking approval for the decks and balconies on their property after a Judicial Review challenge from Mr Joseph resulted in a previous approval being declared invalid and further allegations of bias against the Council.

Council refused to grant consent to the DA, citing that the proposal was development that was prohibited by operation of cl 6.7 of the KLEP. A position that was clearly contrary to established caselaw.

The Spencers appealed to the Land and Environment Court under s 8.7(1) of the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act). Council contended that the development was prohibited by operation of cl 6.7 of the KLEP.

Mr Joseph unsuccessfully sought joinder to the appeal and therefore remained a non-party objector in the proceedings.

The parties’ Town Planning and Urban Design expert witnesses produced a joint expert report for the purposes of the Class 1 Appeal.

At a mandatory conciliation conference under s 34AA of the Land and Environment Court Act 1979 (NSW) (LEC Act), after inspecting Mr Joseph’s property and hearing his submissions on site, the Spencers and Council reached agreement as to a form of development that was considered acceptable. The proposal was amended to reduce scale and impacts, and Council accepted that the revised design fell within the exception in cl 6.7(2)(b) (erection of a building where exceptional site features make it appropriate).

A Commissioner disposed of the proceedings under s 34(3) of the LEC Act, granting development consent by way of the decision in Spencer v Kiama Municipal Council (No 2) [2024] NSWLEC 1526. Mr Joseph was notified of the outcome after the decision was made, in accordance with the accepted practice in Class 1 proceedings.

Mr Joseph commenced proceedings in the NSW Court of Appeal seeking judicial review of the Land and Environment Court’s decision and declaratory relief, alleging matters including jurisdictional error, denial of procedural fairness and failure to properly consider merit matters (earlier amendment applications to allege misconduct by the parties in reaching agreement were either withdrawn or rejected by Court).

Court of Appeal’s decision and its implications

Mr Joseph’s amended summons was dismissed and he was ordered to pay the Spencers’ costs.

Implications for all

The Court of Appeal reaffirmed that, in conciliation:

• a Commissioner’s role is not to conduct a merits assessment, but to confirm the agreed outcome is one the Court could lawfully make;
• evaluative planning judgments (such as whether an ‘exception’ is satisfied under a local environmental plan) are not jurisdictional facts requiring independent determination by the determining court; and
• commissioners may rely on material provided by the parties during conciliation (including amended plans and expert reports) without reconciling competing evidence.

Implications for councils

• Councils retain power to approve amendments to development applications during Class 1 appeal proceedings.
• A change in council position during conciliation does not give rise to procedural unfairness to objectors.
• Conciliation outcomes are robust provided jurisdictional constraints are addressed and recorded.

Implications for developers

• Amendments negotiated at conciliation can be approved, even after an initial refusal, if the revised proposal remains legally permissible.
• Agreements reached at conciliation will generally be insulated from later challenge, absent clear jurisdictional error.
• Detailed jurisdictional notes and addendum statements of environmental effects remain effective conciliation tools.

Implications for objectors

• Objectors have no entitlement to participate in conciliation negotiations or to be informed of changes in council position.
• Judicial review is not a second merits appeal and will not succeed simply because the objector disagrees with planning conclusions.
• The statutory scheme prioritises efficiency and finality over ongoing public involvement once proceedings move to conciliation. Particularly because objectors are not parties to proceedings and are provided an opportunity to make submissions.

Practical lesson

This case reaffirms the ongoing leadership of the Land and Environment Court in alternative dispute resolution through it’s conciliation process and that the scope for objectors to intervene is extremely limited once a council and applicant reach a lawful agreement during the conciliation process.

We acted for the Spencers in both the Class 1 and Court of Appeal proceedings. We also advised the Spencers in relation to a parallel Development Application for new decks and balconies that were in a different and larger format to that approved through the Land and Environment Court.

Should you require any assistance with your development application or any planning approval pathway please contact us.

This article was written by John Paul Merlino, Partner.