Which Prevails – the OC Rules or the Planning Permit Conditions?

The Supreme Court has determined a case, Elwick 9 Pty Ltd v Freeman [2018] VSC 234, which examined the question of whether owners corporation rules (OC Rules) which are inconsistent with the conditions on a planning permit can be acted upon or are of no effect.

The operator of a gym on the ground floor of a mixed use commercial and residential apartment building appealed a decision of VCAT in relation to a proceeding brought by the owner of the apartment above the gym. The owner argued that the gym was creating noise and vibration in contravention of the OC Rules.

The OC Rules relevantly provided that noise must not be audible outside a lot (including outside the gym) between the hours of 10pm and 8am. But, the planning permit relevantly authorised the gym to operate between the hours of 6am and 11am.

Section 140 of the Owners Corporations Act 2006 states that if an OC Rule is inconsistent with or limits a right under any Act the OC Rule has no effect. The court was asked to decide whether or not the planning permit created a “right” for the purposes of s140.

Quigley J held that, once granted, a planning permit confers the right to use and develop land in accordance with the conditions imposed on the permit. The right is a substantive one and runs with the land. It cannot be displaced by an inconsistent OC Rule.

OC Rules cannot override or limit the rights obtained under a planning permit. If there is inconsistency between the two, the Rule will be read down to the extent of the inconsistency.

This decision demonstrates the importance of addressing any concerns about use or development within the framework established by the Planning and Environment Act 1987, including the objector provisions for planning permit applications.

In reality planning permission is often part of the initial planning approval for the whole of a development and is granted prior to creation of the owners corporation. In the absence of lot owners or an owners corporation objecting to the issuing of a permit and stating their concerns, the planning framework relies more heavily upon Council, or the Planning and Environment List of the Tribunal to identify potential impacts of a use and development and assess them as appropriate.

Once a planning permit is granted, if difficulties arise as a result of the permissions granted by it, the appropriate course of action will most likely be under the Planning and Environment Act, not the Owners Corporation Act and the OC Rules.