A developer started work on a 68-home complex in Bruce, despite the ACT Planning and Land Authority having rejected its plans for the project.
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Access Canberra has shut down work on TP Dynamics' so-called Wish Residences on Thynne Street, after being made aware that the company was undertaking work without development or building approval.
The developer was issued with a stop work notice and prohibition notice on Friday afternoon.
ACT construction occupations registrar Ben Green on Tuesday said it was "unusual" and "troubling" that a developer had started construction work without the relevant approvals.
Mr Green said the matter was still under investigation, and therefore could not comment further on the case - including whether TP Dynamics had ever lodged a development application for the project.
But The Canberra Times has obtained documents from the ACT Planning and Land Authority, which show the developer only ever received approval to demolish existing buildings, remove trees and undertake earthworks in preparation for the site's redevelopment.
The developer's consultant, Canberra Town Planning, lodged plans for the townhouse and apartment complex, but they were rejected by the planning authority on March 26.
The proposed development was to include 56 townhouses, 12 "sky terrace" apartments and commercial space across six buildings.
In a notice of decision, the authority's delegate, George Cilliers, said the proposal had been rejected because it did not comply with numerous local planning rules and was not supported by a number of government agencies, including the Environment Protection Authority and Transport Canberra.
Mr Cilliers said the proposed five-storey apartment block was "not considered compatible with the character" of the surrounding area.
The authority received seven submissions during public consultation on the proposal, with the building's height identified as the main issue.
Despite the ruling, the developer started construction work on the site. Before it was shut down on Friday, extensive excavation work had been completed. Concrete frames had also been installed.
A crane remained stationed on the site on Tuesday. TP Dynamics did not return calls from The Canberra Times.
The developer is involved with a number of projects around Canberra, including in Lawson and Weston.
It is overseeing Yowani Golf Club's plans to transform its grounds with up to 1200 homes.
The move to halt work at the Wish development came after Access Canberra last week lifted bans on construction activity at 17 building sites in Gungahlin. Those restrictions had been in place for three months.
The sanctions have been a central part of the government's recent crackdown on sub-standard building work.
The construction union's ACT-branch secretary, Jason O'Mara, welcomed Access Canberra's "strong response" to the developer's failure to the fulfill the "fundamental requirement" of securing development approvals before starting work.
Mr O'Mara reiterated calls for the introduction of a stricter occupational licensing regime to ensure developers, builders and sub-contractors were held accountable for breaches of construction laws.