Bunderra Holdings Pty Ltd v Pasminco Cockle Creek Smelter Pty Ltd (subject to Deed of Company Arrangement)

[2017] NSWCA 263

Court of Appeal

Supreme Court

New South Wales

• Summary available
• Amendment notes

Medium Neutral Citation:

Bunderra Holdings Pty Ltd v Pasminco Cockle Creek Smelter Pty Ltd (subject to Deed of Company Arrangement) [2017] NSWCA 263

Hearing dates:

31 August 2017

Decision date:

20 October 2017

Before:

McColl JA at [1];
Leeming JA at [53];
Payne JA at [80]

Decision:

(1) leave granted to the appellant to amend the notice of appeal to include proposed ground 6A;

 

(2) a revised notice of appeal to be filed by the appellant with the registry of the Court within 7 days of the date of these orders;

 

(3) appeal allowed;

 

(4) orders 1-4 of the primary judge dated 21 December 2016 be set aside and in lieu thereof it be ordered:

 

(a) application dismissed;

 

(b)   the applicant (Pasminco) to pay the first and second respondent’s costs in the Land and Environment Court as agreed or assessed;

 

(5) the first respondent to the pay the appellant’s costs in this Court as agreed or assessed;

 (6) there is no order in relation to the costs of the second respondent in this Court with the intention that the parties bear their own costs.

Catchwords:

ENVIRONMENT AND PLANNING – construction of development consent – development consent approved 90-lot subdivision – whether condition 16 of development consent required construction of reinforced concrete pipe

  ENVIRONMENT AND PLANNING – construction of development consent – whether a document can be retrospectively incorporated into a development consent by “necessary implication”

Legislation Cited:

Environmental Planning and Assessment Act 1979 (NSW)
Environmental Planning and Assessment Regulation 2000 (NSW)

Cases Cited:

Allandale Blue Metal Pty Ltd v Roads and Maritime Services (2013) 195 LGERA 182; [2013] NSWCA 103
Auburn Municipal Council v Szabo (1971) 67 LGRA 427
Bardsley-Smith v Penrith City Council (2013) 195 LGERA 34; [2013] NSWCA 200
Baulkham Hills Shire Council v Ko-veda Holiday Park Estate Ltd (2009) 167 LGERA 395; [2009] NSWCA 160
Burwood Council v Ralan Burwood Pty Ltd (No 3) (2014) 206 LGERA 40; [2014] NSWCA 404
Cheetham v Goulburn Motorcycle Club Inc [2017] NSWCA 83
Hillpalm Pty Ltd v Heaven's Door Pty Ltd (2004) 220 CLR 472; [2004] HCA 59
House of Peace Pty Ltd v Bankstown City Council (2000) 48 NSWLR 498; [2000] NSWCA 44
Lake Macquarie City Council v Australian Native Landscapes Pty Ltd (No 2) [2015] NSWLEC 114
Oakden Shopping Centre Pty Ltd v City of Port Adelaide Enfield (2004) 137 LGERA 189; [2004] SASC 373
Parramatta City Council v Shell Co of Australia Ltd [1972] 2 NSWLR 632
Ryde Municipal Council v Royal Ryde Homes (1970) 19 LGRA 321
Sertari Pty Ltd v Quakers Hill SPV Pty Ltd [2014] NSWCA 340
Stebbins v Lismore City Council (1988) 64 LGRA 132
Sydney Serviced Apartments Pty Ltd v North Sydney Municipal Council [No 2] (1993) 78 LGERA 404
Westfield Management Limited v Perpetual Trustee Company Limited [2006] NSWCA 245
Weston Aluminium Pty Ltd v Environment Protection Authority (2007) 82 ALJR 74; [2007] HCA 50
Winn v Director General of National Parks and Wildlife (2001) 130 LGERA 508; [2001] NSWCA 17
Woolworths Ltd v Pallas Newco Pty Ltd (2004) 61 NSWLR 707; [2004] NSWCA 422

Category:

Principal judgment

Parties:

Bunderra Holdings Pty Ltd (Appellant)
Pasminco Cockle Creek Smelter Pty Ltd (subject to Deed of Company Arrangement) (First respondent)
Lake Macquarie City Council (Second respondent)

Representation:

Counsel:
I Hemmings SC with J McKelvey (Appellant)
S B Lloyd SC with L T Livingston (First Respondent)

  Solicitors:
Bradley Allen Love Lawyers (Appellants)
Speirs Ryan Pty Ltd (First respondent)
Moray and Agnew (Second respondent)

File Number(s):

2017/8668

 Decision under appeal 

Court or tribunal:

Land and Environment Court

Jurisdiction:

Class 4

Citation:

[2016] NSWLEC 143

Date of Decision:

11 November 2016

Before:

Robson J

File Number(s):

2016/159532

headnote

[This headnote is not to be read as part of the judgment]

The appellant (Bunderra) and the first respondent (Pasminco) own neighbouring parcels of land in the Lake Macquarie area, the “TriPad site” and the “Main site” respectively.

The second respondent (the Council) granted development consent for the subdivision of the TriPad site into 90 residential lots. Condition 16 of the Development Consent required certain stormwater management works to be undertaken.

Two stormwater strategy reports (the August GCA Strategies) were submitted to Council and expressly incorporated into the Development Consent. Relevantly, they provided for the construction of a reinforced concrete pipe under a roadway owned by the Council (Main Road) up to the boundary of Pasminco’s property, as part of a future stormwater solution in the event that the Main site was developed.

Condition 1 of the Development Consent provided that the August GCA Strategies could be varied by the conditions of the Development Consent.

A subsequent strategy report (the September GCA Strategy) was prepared for the purpose of satisfying Condition 16 of the Development Consent, namely to provide further information prior to the issue of a construction certificate. It contained amendments to proposed stormwater structures.

The primary judge granted an injunction restraining the Council from issuing a subdivision certificate to Bunderra in respect of the development of the TriPad site until Bunderra constructed the reinforced concrete pipe under Main Road.

The main issues on appeal were:

(i)    whether Condition 16 placed an obligation on Bunderra to construct the reinforced concrete pipe under Main Road;

(ii)    whether the September GCA Strategy was incorporated into the Development Consent by necessary implication;

(iii) whether, by reason of s 80(12) of the Environmental Planning and Assessment Act 1979 (NSW), to the extent that there was an inconsistency between the plans in a Construction Certificate issued by Council and those in the Development Consent, the former prevailed;

(iv)    whether the primary judge in erred in factual findings, that there are “substantial issues with flooding on the TriPad site” and that the Development Consent “did not include Lot 2”, which was a drainage reserve owned by the Council.

The Court (McColl JA, Leeming JA and Payne JA) allowing the appeal, held:

In relation to issue (i), per McColl JA at [25]-[37]; per Leeming JA at [55]-[59]; per Payne JA at [159]-[181]

(1) Condition 16, on its proper construction, did not require Bunderra to construct the reinforced concrete pipe under Main Road.

Parramatta City Council v Shell Co of Australia Ltd [1972] 2 NSWLR 632; Westfield Management Limited v Perpetual Trustee Company Limited [2006] NSWCA 245; Baulkham Hills Shire Council v Ko-veda Holiday Park Estate Ltd (2009) 167 LGERA 395; [2009] NSWCA 160 considered.

In relation to issue (ii), per McColl JA at [38]-[42]; per Leeming JA at [60]-[74]; per Payne JA at [192]-[198]

(2) the September GCA Strategy, which is inconsistent with the terms of the Development Consent, was not capable of being incorporated by “necessary implication”.

House of Peace Pty Ltd v Bankstown City Council (2000) 48 NSWLR 498; [2000] NSWCA 44; Winn v Director-General of National Parks and Wildlife (2001) 130 LGERA 508; [2001] NSWCA 17 considered.

Allandale Blue Metal Pty Ltd v Roads and Maritime Services (2013) 195 LGERA 182; [2013] NSWCA 103 applied.

In relation to issue (iii), per McColl JA at [43]-[52]; per Leeming JA at [75]-[78]; per Payne JA at [211]-[217]

(3) consistently with s 80(12) of the EPA Act, the plans in the Construction Certificate formed part of the Development Consent.

(4) to the extent that there is an inconsistency between plans and specifications in a Construction Certificate, and plans and specifications originally approved in a development application, the former must prevail.

Burwood Council v Ralan Burwood Pty Ltd (No 3) [2014] NSWCA 404; (2014) 206 LGERA 40 applied.

In relation to issue (iv), per Payne JA at [225]-[228] and [234]-[237] (McColl and Leeming JJA agreeing)

(5) based on the evidence it was open for the primary judge to conclude that there were substantial issues with flooding.

(6) the primary judge erred in finding that Lot 2 was excluded from the Development Consent, however such an error had no consequence.

Judgment

1. McCOLL JA: I have had the benefit of reading Payne JA’s reasons in draft. His Honour has set out the factual background and the issues. I shall not repeat those matters, save to the extent necessary to explain why, subject to, and for the reasons that follow, I agree with his Honour’s reasons and the orders he proposes and also with Leeming JA’s reasons

2. The critical issue is which of the parties, the appellant, Bunderra Holdings Pty Ltd (Bunderra) or the respondent, Pasminco Cockle Creek Smelter Pty Ltd (subject to Deed of Company Arrangement) (Pasminco), is responsible for the construction of a Ø1200 pipe approximately 15m in length (RCP culvert) running under a road (Main Road) separating the parties’ parcels of land: the TriPad site and the Main site respectively. The Main site is at a higher elevation to the TriPad site. The purpose of the RCP culvert is to drain stormwater from the Main site into a network of pipes constructed on the TriPad site into Cockle Creek and, ultimately, into Lake Macquarie.

3. In its current state, the TriPad site can accommodate the runoff from the Main site. The existing stormwater structure which addresses that issue is an 1800mm wide x 600mm high reinforced concrete box culvert running from the Main site under Main Road which outlets via twin Ø900 pipes to a drainage channel which, in turn, outlets through the TriPad site to a culvert under TC Frith Avenue. It is only once the Main site is developed that the RCP culvert must be constructed to accommodate increased stormwater runoff consequent upon the development.

4. The issue turns primarily on the construction of Condition 16 of a development consent (Consent) issued by the second respondent, Lake Macquarie City Council (Council), on 2 September 2014 for the subdivision of the TriPad site. Pasminco owned the TriPad site at the time the Consent was issued, albeit that Bunderra had agreed to purchase it by contract for sale dated 17 April 2014. The Consent approved, subject to conditions, the subdivision of the TriPad site into 90 residential lots.

5. After the Consent was issued, Bunderra settled the purchase of the Tripad site. Pasminco continued to own the Main site.

Stormwater drainage works: structure

6. It is uncontroversial that, by reason of the reference to them in Condition 1 of the Consent, two strategies, (August GCA Strategies), entitled respectively “Proposed Subdivision; TriPad Site, Boolaroo, Stormwater Management Strategy” relating to the TriPad site (TriPad Strategy), and “Bunderra Subdivision, Main Road Catchment, Main Road, Boolaroo, Stormwater Management Strategy” relating to the Main site (Main Road Strategy), were expressly incorporated into the Consent.

7. The August GCA Strategies were also referred to in Condition 16, “Stormwater Detention/Overland Flows”, which provided (with sub-paragraph numbers inserted for ease of reference):

“16. Stormwater Detention / Overland Flows

[1]    Council has relied on the information provided in the Stormwater Management Strategies by GCA in formulating this condition.

[2]    The Applicant shall show by plans and calculations that the flows from the catchment above Main Road are able to the [sic, be] safely conveyed past Main Road and through the [TriPad site] and under TC Frith Avenue. It shall be shown that the development runoff from within the Main Road and TriPad Sites does not exceed the capacity of any existing or proposed culverts under Main Road and TC Frith Avenue.

[3]    Any required stormwater detention structures shall be constructed with the civil works for the TriPad site. A covenant shall be placed over any required stormwater detention facilities that are on the [Main site] that are relied upon to ‘protect’ the drainage downstream. The covenant shall be to the effect that the approved detention volumes and outflow rates from the facilities are to be maintained until such time as an approved replacement facility is operational.

[4]   Plans and calculations for such stormwater controls shall be submitted prior to the issue of a Construction Certificate and the works shall be completed as part of the initial construction work in the first stage of the development.” [Emphasis in original.]

8. The TriPad Strategy related only to the treatment of the TriPad site. It referred the reader to the Main Road Strategy for the detailed modelling of the upstream catchment and the sizing of the RCP culvert under Main Road. In its Summary and Conclusions section, it described the strategy for the management of stormwater runoff from the TriPad site development as being summarised on Figure 4 and said, relevantly:

“•   A Ø1200 RCP network for the connection of the future culvert under Main Road from the Bunderra Subdivision to convey the detained 100 year ARI flow. Reference should be made to the ‘Bunderra Subdivision, Stormwater Management Strategy’.

…

•   Sufficient stormwater detention has been provided in the catchment above Main Road to allow the flow from the TriPad [sic, site] to be undetained.”

9. Figure 4 relevantly depicted on the TriPad site, “proposed pipe network” by a blue line with the annotation “Ø1200 pipe network to provide connection for future culvert under Main Road”. Bunderra has constructed this pipe network. The RCP culvert was depicted by two lines across the Main Road between the TriPad site and the Main site with the annotation “Ø1200 RCP outlet (under future development application)”.

10. The Main Road Strategy was intended in part to “[s]ize a culvert under Main Road and act as supporting documentation for the Tripad Development Application under assessment.” It referred to a piped system being provided on the Main site and the TriPad site which would be “sized assuming the developable area above Main Road provides its own stormwater on site detention which will limit the pipe size required under Main Road and thus through the TriPad site.” It noted that “within the [Main] site, a large stormwater detention basin is currently constructed on the high side of Main Road to prevent and control discharge into the TriPad site.” In its Summary and Conclusions section it described the stormwater management strategy for the Main site as including:

“•   Limiting the proposed culvert under Main Road to a Ø1200 RCP which relates well to the current Tripad Development Application and Tripad Stormwater Management Strategy.

The final positioning and sizing of the basins and outlet structures will be undertaken at the Development Application phase for the land above Main Road.”

11. Figure 4 attached to the Main Road Strategy depicted the RCP culvert and annotated that depiction with the note “to connect to downstream drainage network” (clearly a reference to the drainage network on the TriPad site) and as being extended to the Ø1200 piped network to be connected to “future basin”, referring to the new detention basin to be constructed on the Main site.

12. The “Bunderra Subdivision, Main Road Catchment … Stormwater Management Strategy” dated 30 September 2014 (September GCA Strategy) was prepared, relevantly to “[p]rovide detail design plans and levels of the proposed basins to satisfy Condition 16 of the Tripad Development Application [sic, Consent].” It was an amended version of the Main Road Strategy. It was submitted to Council by Pasminco in early October 2014 to provide further information prior to the issue of a construction certificate under [4] of Condition 16. By letter dated 13 October 2014 to Pasminco, Council indicated that it was “satisfied” with the approach and concepts of the September GCA Strategy and “generally satisfied” with the design of the proposed stormwater structures, which would “need further refinement in the future and would be subject to detailed design”.

13. The September GCA Strategy relevantly stated:

“2.2    Culvert Hydraulic Design

The proposed culvert under Main Road will be an extension to the outlet pipe from the future basin (Basin 3) located on the high side of Main Road. It has been designed as part of Condition 16 of the Tripad Development Application and should be constructed to the boundary of Lot 1002 as part of the Tripad works. The extension of the pipe within Lot 1002 and the basin construction shall be constructed upon future approvals of the land above Main Road.

…

3.2    Culvert Design

With the proposed basin immediately upstream of Main Road, the culvert will be an extension of the outlet pipe from the basin. The design is shown in Figure 9 & 10. The culvert has been designed as part of Condition 16 of the Tripad Development Application and should be constructed to the boundary of Lot 1002 as part of the Tripad works. The extension of the pipe within Lot 1002 and the basin construction shall be constructed upon future approvals of the land above Main Road.” [Emphasis added.]

14. Bunderra accepted that, if incorporated into the Consent, the effect of the September GCA Strategy was to require it to build the RCP culvert as part of the TriPad works.

15. In April 2015, Bunderra engaged Northrop Consulting Engineers Pty Limited (Northrop) to prepare a report (Northrop report) dealing with “TriPad Subdivision … Main Road and Trunk Drainage System.” As the primary judge accepted, [1] the plans which formed part of the Northrop report did not include the RCP culvert as works Bunderra was required to construct as part of the TriPad subdivision. The plans contained in the Northrop report were approved when the Council issued Construction Certificate SCC/22/2015/A (Construction Certificate) on 25 January 2016.

    1. Pasminco Cockle Creek Smelter Pty Limited (subject to Deed of Company Arrangement) v Lake Macquarie City Council [2016] NSWLEC 143 (at [98]).

Development consent: construction

16. The parties accepted the primary judge’s recitation of the principles concerning the construction of a development consent Biscoe J summarised in Lake Macquarie City Council v Australian Native Landscapes Pty Ltd (No 2). [2] In that summary, Biscoe J described a development consent as having “an enduring nature because it is not personal to the applicant but is a public document operating in rem”. [3] His Honour did not refer in his summary to Hillpalm Pty Ltd v Heaven's Door Pty Ltd,[4] in which the majority (McHugh ACJ, Hayne and Heydon JJ) held that a consent to a subdivision did not create a right in rem, but, rather, a right in personam. [5]

    2. [2015] NSWLEC 114 (at [39] – [48]).

    3. Ibid (at [40]).

    4. (2004) 220 CLR 472; [2004] HCA 59 (Hillpalm).

    5. Ibid (at [51] – [55]); Kirby J and Callinan J dissented.

17. In Sertari Pty Ltd v Quakers Hill SPV Pty Ltd,[6] after referring to the majority’s reasons in Hillpalm, Tobias JA observed that “a consent operates, in effect, in rem in that it may be availed of by subsequent owners and occupiers of the land.” This would, at least, be the case where the consent has a continuing operation, as the majority in Hillpalm recognised, for example, in identifying a permitted use of the land, in which case, any person who used the land contrary to the consent whether or not being the applicant for consent would be in breach of s 76A of the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act). [7]

    6. [2014] NSWCA 340 (at [85]).

    7.    Hillpalm (at [49]).

18. Hillpalm indicates that statements that development consents operate “in rem” are not literally correct and must be viewed with caution. It is sufficient to say, that a consent has “enduring functions” [8] or “an ‘in rem’ quality”. [9] It is unnecessary to consider the significance of the majority’s conclusion in Hillpalm further as there is no issue as to Bunderra’s obligation to comply with the development consent which attaches to the TriPad site.

    8. Winn v Director General of National Parks and Wildlife [2001] NSWCA 17; (2001) 130 LGERA 508 (Winn) (at [4]) per Spigelman CJ.

    9. Woolworths Ltd v Pallas Newco Pty Ltd (2004) 61 NSWLR 707; [2004] NSWCA 422 (at [64]) per Spigelman CJ; app Bardsley-Smith v Penrith City Council [2013] NSWCA 200; (2013) 195 LGERA 34 (at [66]) per Sackville AJA (McColl and Barrett JJA agreeing).

16. However, some further exposition of the principles relating to the construction of development consents as they relate to the incorporation of documents is useful to highlight their underlying rationale.

17. In Ryde Municipal Council v Royal Ryde Homes,[10] Else-Mitchell J accepted that a development consent could incorporate conditions contained in another document. His Honour emphasised, however, that as such a consent was “not personal to the applicant but enures for the benefit of subsequent owners and occupiers, and in some respects … is equivalent to a document of title,” it was “important that care should be taken to ensure that consents are framed in clear terms and conditions are specified with certainty.” Hope J expanded on this proposition in Auburn Municipal Council v Szabo,[11] where he explained that Ryde Municipal Council was authority for the proposition “that in determining what a council has approved, one primarily looks at the document constituting the approval, and construes it.” As his Honour continued:

“The necessity to do this arises, inter alia, from the fact that a development approval does not enure only for the benefit of the applicant. It enures for the benefit of all future owners or occupiers, and it would create a confusing and difficult, if not impossible, position if in order to determine what a council had approved one had to go to a whole series of documents and try to determine which of the documents and which part of any particular document the council intended to incorporate in its approval. The terms of another document may be incorporated in a development approval either expressly or by necessary implication, but I do not think that it is possible otherwise to go to documents outside the formal approval in order to determine what has been approved.”

10. (1970) 19 LGRA 321 (Ryde Municipal Council) (at 323 – 324).

11. (1971) 67 LGRA 427 (Szabo) (at 433 – 434); app Sydney Serviced Apartments Pty Ltd v North Sydney Municipal Council [No 2] (1993) 78 LGERA 404 (Sydney Serviced Apartments) (at 407 – 408) per Handley JA (Cripps and Clarke JJA agreeing).

21. His Honour illustrated the circumstances in which a document might be incorporated in a development approval by necessary implication by referring to an application where a council did no more than approve itself, in which circumstances, in his view, the terms of the application must be incorporated. [12] In the case before him, for example, his Honour had no hesitation in concluding that a reference in the consent to “Plans and specifications … herewith attached”, had the effect that those documents were incorporated in the consent. [13]

    12.    Szabo (at 434)

    13.    Ibid.

22. As Meagher JA explained in Allandale Blue Metal Pty Ltd v Roads and Maritime Services,[14] the relevant principles concerning the construction of a development consent are more easily stated than applied. Notwithstanding the outcome in Szabo, even a reference to a document may not be sufficient to constitute express incorporation. Rather, “whether the reference is sufficient will depend upon the reason for the reference as appears from the consent itself”. [15] As his Honour also explained, what is sufficient to constitute incorporation, by necessary implication, for the purpose of these principles is less clear. [16] Significantly, the cases to which his Honour referred in which documents were incorporated by necessary implication were ones in which reference had to be made to such documents to make the consent meaningful. [17] None were cases in which the documents incorporated by necessary implication fundamentally altered the meaning of the consent, nor were they documents which post-dated the consent.

    14. [2013] NSWCA 103; (2013) 195 LGERA 182 (Allandale) (at [42]).

    15. Ibid (at [45]). Thus, in Sydney Serviced Apartments (at 408), Handley JA held that a letter referred to in a consent was not incorporated because it seemed to be referred to only for the purpose of identifying drawings which were also identified as annexures to an agreement he had already held was incorporated. Accordingly, the letter could not be used in determining the meaning of the consent.

    16.    Allandale (at [46]).

    17. Ibid (at [46] – [48]): Stebbins v Lismore City Council (1988) 64 LGRA 132; Oakden Shopping Centre Pty Ltd v City of Port Adelaide Enfield [2004] SASC 373; (2004) 137 LGERA 189; cf Winn see also Allandale (at [189], [193]) per Ward JA

23. Indeed, as the primary judge recognised, “authorities which have incorporated a document by way of necessary implication have generally only done so with regard to documents which were available at some stage before consent was granted, and usually as part of a development application”. [18]

    18.    Primary judgment (at [88]).

24. Finally, I note that, as Basten JA pointed out in Cheetham v Goulburn Motorcycle Club Inc,[19] in Weston Aluminium Pty Ltd v Environment Protection Authority,[20] “the High Court noted that it was not necessary to address ‘[t]he general approach to construction of development consents’ and that it was ‘not necessary in this case to consider what reference may be made to the development application to which the consent responds.’” His Honour thought there was an available inference that what he identified as the “somewhat inflexible approach … to the construction of a consent, which generally eschews reference to any document other than the consent and such documents as may be incorporated into the consent, expressly or by necessary implication” may need to be revisited in the future. [21]

    19. [2017] NSWCA 83 (Cheetham) (at [61]).

    20. [2007] HCA 50; (2007) 82 ALJR 74 (at [17]).

    21.    See Cheetham (at [61]).

Development consent: consideration

25. Although the August GCA Strategies were both incorporated in the Consent, their incorporation was for distinct purposes. The TriPad Strategy was incorporated to explain stormwater management on the TriPad site as part of the process of subdivision. In contrast, the Main Road Strategy was intended to explain what would happen on, and in connection with, the Main site in order to ensure the stormwater management strategy proposed for the TriPad site was effective. It was incorporated into the Consent, only as a point of reference for the works described in the Main Road Strategy as supporting the TriPad Development Application, not to identify works which were to take place on the TriPad site.

26. Relevantly, as much was accepted by the primary judge who found that “the August GCA Strategies also clearly presume that the [RCP culvert] will be part of a future development application.” [22] This was plainly a reference to a development application other than that for the TriPad site then before the Council. In context, it was a reference to the “proposed Bunderra Superlot Subdivision” for the Main site referred to in the Main Road Strategy.

    22.    Primary judgment (at [68]).

27. The primary judge did not, however, accept that his conclusion that “the [RCP culvert] will be part of a future development application” carried any significant weight. This was because he held that Condition 16 varied the August GCA Strategies. [23] In his Honour’s view, the first obligation in the first sentence of Condition 16[3], read with Condition 16[2], amended the August GCA Strategies and implied “that the necessary structures include those which ensure that the capacity of the ‘existing and proposed culverts under Main Road’ is sufficient to transport the stormwater runoff.” [24]

    23.    Ibid (at [69]).

    24.    Ibid (at [72]).

28. His Honour also concluded that the RCP culvert was “a required part of the stormwater detention structures” referred to in Condition 16[3]. [25] This was notwithstanding that his Honour recognised, as was self-evident, that its purpose was to transport stormwater collected on the Main site and “carry it to the 1.2m pipe network that forms part of the proposed civil works on the TriPad site”, [26] and that “the stormwater from the [Main site] cannot be conveyed across the TriPad site without the [RCP culvert]”. [27]

    25.    Ibid (at [73]).

    26.    Ibid.

    27.    Ibid (at [74]).

29. In my view, with respect, his Honour erred in concluding that the RCP culvert was “a required part of the stormwater detention structures” referred to in Condition 16[3]. The structure of Condition 16, clearly not drafted by lawyers, but to be construed practically, [28] reflected the August GCA Strategies. The first sentence of Condition 16[2] required Pasminco, then the applicant for the development consent to the subdivision of the TriPad site, to demonstrate that flows from the Main site, could be safely drained across the Main Road and through the TriPad site. The second sentence required demonstration that the combined runoff from the two sites did not exceed the capacity of “existing or proposed culverts under Main Road”. That sentence recognised, as was evident from the annotation on Figure 4 to both August GCA Strategies, that the RCP culvert was to be the subject of a future development application as I have already said.

    28. Westfield Management Limited v Perpetual Trustee Company Limited [2006] NSWCA 245 (at [36]) per Hodgson JA; Baulkham Hills Shire Council v Ko-veda Holiday Park Estate Ltd [2009] NSWCA 160; (2009) 167 LGERA 395 (at [96] – [99], [105]) per Tobias JA (Young JA and Bergin CJ in Eq agreeing).

30. The first sentence of Condition 16[3] which required, “stormwater detention structures” to be constructed with the civil works for the TriPad site, in my view, was a reference to stormwater detention structures on the TriPad site, being the bio-retention basin, stormwater tanks and similar referred to in the TriPad strategy.

31. The first sentence of Condition 16[3] was not, with respect, as the primary judge concluded, a reference to stormwater detention structures beyond the TriPad site. Contextually construed, Condition 16[3] did not require the developer of the TriPad site, as such, to be responsible for constructing stormwater detention structures on, or ancillary to, the Main site which were only required when the Main site was developed.

32. This conclusion is supported by the covenant the second and third sentences of Condition 16[3] required, which demonstrated that responsibility for upstream stormwater flows rested with the owner of the upstream land, the Main site.

33. The purpose of requiring a covenant to be placed over the stormwater detention facilities on the Main site was to protect the drainage downstream on the TriPad site until “an approved replacement facility is operational”. The latter was clearly a reference to the stormwater management strategy to be implemented on the Main site when, and if, it was developed under a future development application. That any such application was to include constructing the RCP culvert at that time was evident from Figure 4 attached to both GCA August Strategies. Until then, the covenant ensured that the existing stormwater detention facilities on the Main site remained operational so as to protect the drainage both across Main Road and through the TriPad site.

34. Further, as the primary judge recognised, the RCP culvert is not itself a “stormwater detention structure”. Rather it is intended to function as an “outlet” from Basin B on the Main site, to convey the water detained upstream in Basin B under and through the TriPad site, so that it may then pass under TC Frith Avenue and ultimately reach Cockle Creek. The pipe forms part of the overall stormwater drainage system, specifically, the “Trunk Drainage System” as it is called in the Northrop report.

35. Accordingly, to the extent the RCP culvert was a “required part of the stormwater detention structures”, [29] it was most naturally a part of such structures as and when they were constructed on the Main site, not on the TriPad site. As Bunderra submitted, the development designs in the August GCA Strategies did not envisage the RCP culvert would connect to any stormwater detention structure on the TriPad site unless and until the basins on the Main site were designed and constructed. Until that time, on the primary judge’s conclusion, as Bunderra submitted, it will be, in essence, a “pipe to nowhere”. The fact that it serves no practical function until the Main site is developed underscores the conclusion that it was not a responsibility which would be expected to fall on the owner of the TriPad site.

    29.    Primary judgment (at [73]).

36. Finally, Condition 16[4] was equally as capable of referring to the plans attached to the Northrop report, rather than, as in due course the primary judge held, the September GCA Strategy. The Council, at least, accepted as much by issuing the Construction Certificate with the plans from the Northrop report attached and, in turn when it issued the Certificate of Practical Completion with regard to the first stage of the development.

37. Accordingly, with respect, it was not a practical construction of Condition 16 to conclude it required Bunderra to construct the RCP culvert. It made neither commercial nor practical sense to require it to construct a pipe beyond its own boundaries, in circumstances where the pipe directly benefited Pasminco as it was necessary to enable it to undertake its mooted subdivision of the Main site.

Incorporation of September GCA Strategy

38. In my view, the primary judge erred in concluding the September GCA Strategy was incorporated by necessary implication into the Consent.

39. The review of the authorities earlier referred to demonstrates that the nature of documents held to have been incorporated in this manner are those contemporary to a development consent which give it meaning, which are those to which it might be expected a third party would seek to have recourse (and which would readily be available in council records) if a development consent was prima facie uncertain.

40. Documents such as the September GCA Strategy created subsequent to a consent do not lend themselves to this process of inquiry. Tellingly Pasminco could not explain how an inquirer might locate it in the Council’s records. A conclusion a subsequently created document was incorporated by necessary implication would create the difficult position Hope J identified in Szabo. I accept that it may be a matter of fact and degree in each case. In this case, however, even if one was to accept a third party may inquire as to the outcome of the exercise Condition 16[4] required, that inquiry would most logically have taken it to the Construction Certificate.

41. The Construction Certificate in terms approved the plans attached to the Northrop report, none of which required Bunderra to construct the RCP culvert. It should be assumed the Council did so because the Northrop plans were consistent with the Consent, as neither required Bunderra to construct the RCP culvert. [30]

    30. Pursuant to cl 145(2) of the Environmental Planning and Assessment Regulation 2000 (NSW) (EPA Regulation), the Council could “not issue a construction certificate for [the TriPad] subdivision work unless the design and construction of the work (as depicted in the plans and specifications and as described in any other information furnished to the certifying authority under clause 140) are not inconsistent with the development consent.”

42. In such circumstances, in my view, it would be entirely anomalous to conclude the September GCA Strategy was incorporated by necessary implication in the Consent.

Paramountcy of the Construction Certificate

43. The effect of the previous conclusions is that the issue concerning the application of s 80(12) of the EPA Act does not arise. However, I shall address it briefly as, in my view, with respect, the primary judge misapprehended this Court’s decision in Burwood Council v Ralan Burwood Pty Ltd (No 3). [31]

    31. [2014] NSWCA 404; (2014) 206 LGERA 40 (Ralan).

44. Section 80(12) of the EPA Act provides:

“80   Determination

…

(12) Effect of issuing construction certificate

If a consent authority or an accredited certifier issues a construction certificate, the construction certificate and any approved plans and specifications issued with respect to that construction certificate, together with any variations to the construction certificate or plans and specifications that are effected in accordance with this Act or the regulations, are taken to form part of the relevant development consent (other than for the purposes of section 96).” [Emphasis added.]

45. In the present context, this issue turns on determining the effect of the Construction Certificate and its accompanying plans (relevantly, the Northrop report plans) which did not require Bunderra to construct the RCP Culvert and the terms of the inconsistent Consent (assuming the incorporation of the September GCA Strategy by necessary implication).

46. In Ralan, the construction certificates issued by accredited certifiers involved substantial departures from the development consent, such that the façade of a major residential and commercial development in Burwood bore little relationship to the plans and specifications the subject of the development consent. Burwood Council accepted that the façade conformed to plans and specifications provided by, or on behalf of, Ralan Burwood Pty Ltd to the accredited certifiers who issued the construction certificates. However, it argued that the construction certificates incorrectly stated that the plans and specifications provided to the certifiers were consistent with the development consent and, accordingly, contended that they were void. [32]

    32. Ibid (at [6]).

47. Sackville AJA (with whom Barrett JA and I agreed), rejected this argument, according paramountcy to construction certificates pursuant to s 80(12). His Honour held:

“[202]    In this case, an accredited certifier issued the CCs. They are valid, at least until set aside. The plain words of s 80(12) have the effect of deeming the plans and specifications issued by the accredited certifier with respect to the construction certificate to be part of the DA. To the extent that there is an inconsistency between those plans and specifications and the plans and specifications approved in the DA, the former must prevail. The legislation accommodates the possibility that an accredited certifier will issue a construction certificate in breach of cl 145(1) and s 109F(1) [Restriction on issue of construction certificates] by according paramountcy to the plans and specifications referred to in the construction certificate.” [Emphasis added.]

48. In this case, Bunderra applied for, and the Council issued, the Construction Certificate for the whole of the works required to be completed by Bunderra in the first stage of the development. The Construction Certificate approved the Northrop report plans. Consistently with Ralan, the effect of s 80(12) is that the Construction Certificate, and the Northrop report plans approved therein, form part of the Consent. Even if the September GCA Strategy was incorporated by necessary implication, the inconsistency that arises between the obligation imposed by that strategy on Bunderra to construct the RCP culvert and the absence of any such obligation in the Northrop report means that the Construction Certificate plans prevail. [33]

    33. Ibid (at [202]).

49. The primary judge recognised that the Northrop report plans did not include the RCP culvert. His Honour concluded that the fact that the Construction Certificate did not refer to Condition 16 was not sufficient to exonerate Bunderra from complying with the requirement in the September GCA Strategy to construct the RCP culvert. [34]

    34.    Primary judgment (at [97] – [98]).

50. However, with respect, his Honour erred in confining the principle in Ralan to cases concerning minor changes in a construction certificate that are generally consistent with the relevant consent. Ralan did not turn on there being any question of degree of consistency between a construction certificate and the consent. It held that where a construction certificate has been issued approving plans albeit that they are inconsistent with the development plans, it (and the plans it incorporates) will be presumed valid, at least until set aside, and will be deemed to form part of the relevant consent, overriding any inconsistent terms therein.

48. Contrary to the primary judge’s finding, the requirements under Condition 16 were not “simply…forgotten because the construction certificate plans do not satisfy them.” Rather, the Council is taken to have issued the Construction Certificate on the basis that it was satisfied that the requirements of Condition 16, including the requirement to provide information concerning the design of the stormwater structure, had been met by the provision of the Northrop report.

49. I reject Pasminco’s submission that, if the Construction Certificate did indicate that the RCP culvert was not required, then it would not have been validly issued on the ground that it breached the prohibition in cl 145(2) of the EPA Regulation. Ralan determined that the consequence of inconsistency is not invalidity, but, rather, a process of sanction of the accredited certifiers under relevant legislation. For present purposes, the requirement of consistency in cl 145(1) is drafted in identical terms to cl 145(2), save that the former applies to construction certificates for building work as opposed to subdivision work.

50. LEEMING JA: These proceedings, brought in Class 4 of the jurisdiction of the Land and Environment Court, were confined to seeking declaratory relief in respect of the construction of condition 16 of a development consent, and, consequentially, whether the Council was empowered to issue a subdivision certificate if, as Pasminco maintained, condition 16 had not been complied with.

51. I have had the very considerable advantage of reading the reasons for judgment prepared by Payne JA, which fully summarise (a) the background to the granting of the consent, (b) the subsequent history, which includes a modification application, an application for two construction certificates, and the completion of the work (save for immaterial exceptions) last year, (c) the reasons of the primary judge and (d) the parties’ submissions relating to the numerous grounds of appeal. I agree with his Honour’s reasons. I regard what follows as being by way of elaboration, rather than qualification.

Grounds 1, 2 and 4 – Construction of condition 16

55. I agree with what Payne JA has written concerning the construction of this awkwardly drafted condition. I add the following.

56. As Hodgson JA said in Westfield Management Ltd v Perpetual Trustee Company Ltd [2006] NSWCA 245 at [36], “conditions of consent are to be construed, not as documents drafted with legal expertise, but to achieve practical results”. To similar effect, Tobias JA observed in Baulkham Hills Shire Council v Ko-veda Holiday Park Estate Ltd [2009] NSWCA 160; 167 LGERA 395 at [105] that “it must be remembered that the conditions of consent were drafted by planners and not lawyers”. Payne JA’s conclusion that condition 16 did not impose an obligation on Bunderra to construct the pipe under Main Road is reinforced by common sense considerations (although, to be clear, that is not to imply that the starting point is anything other than the text of the condition).

57. The premise of this development consent was the development of two parts of Pasminco’s land at different times. The consent proceeds on the basis that the “TriPad subdivision site” would, or at least might, be developed before the “Main Pasminco site”. But the latter was uphill of the former, and so it was necessary to deal with stormwater detention and overland flows from the latter site. At all times, it was obvious that one or more pipes or culverts would have to be constructed under Main Road (the road which divides the two sites). At all times, it was plain that substantial detention works would be required (and indeed already existed) on the Main Pasminco site. There is no good reason to construe the unfortunately drafted condition 16 in such a way that the inevitable pipe or culverts under Main Road needed to be constructed in advance of the detention structures on the Main Pasminco site, or, at least, in advance of consent being granted which confirmed with some measure of precision whether and where any such detention structures on the Main Pasminco site would be constructed.

58. Another way of putting the foregoing is this. The reasoning of the primary judge required considering the drainage pipe, which was intended to be connected to an “unbuilt” basin on the Main Pasminco site, to be part of the “required stormwater detention structures”. But on Pasminco’s construction, the obligation to construct the pipe temporally preceded any obligation to construct the detention structure which, once again on Pasminco’s construction, gave the requisite character to the pipe of being part of a stormwater detention structure. In other words, the pipe which the primary judge said must be constructed prior to the issue of a subdivision certificate, and which his Honour held was part of a required stormwater detention structure, is something which (a) is not connected with any detention structure on the Main Pasminco site and (b) bears that character only by reference to a basin which had not yet even been designed and might not ever be built.

59. For those reasons, in addition to those given by Payne JA, I agree that these grounds of appeal should be upheld.

Ground 3 – Incorporation by necessary implication of the September GCA Strategy

60. The structure of the reasons of the primary judge was first to construe condition 16 (at [64]-[77]) which led to the conclusion that Bunderra was required to construct the Main Road pipe. His Honour stated at [78] that that was sufficient to entitle Pasminco the relief it sought. However, his Honour then, at [79]-[95], reached the same conclusion on an alternative basis. As explained by his Honour, the steps were:

1. condition 16 represented a condition expressed in terms of outcomes or objectives pursuant to s 80A(4) of the Environmental Planning and Assessment Act 1979 (NSW): at [80]-[83];

2. “As stated by Meagher JA in Allandale Blue Metal Pty Ltd v Roads and Maritime Services (2013) 195 LGERA 182; [2013] NSWCA 103 at [43]:

‘The extrinsic evidence to which reference legitimately may be made when construing a public document, such as a development consent, is more limited. Reference may be made to documents other than the consent itself if those documents, or parts of them, are incorporated into the consent expressly or by necessary implication ...’”: at [84];

3. the September GCA Strategy was not expressly incorporated, and so could only form part of the Consent through necessary implication: at [85];

4. neither of the August GCA Strategies made provision for the Main Road pipe, which however was necessarily contemplated to convey stormwater, while the September GCA Strategy was “clearly produced in response to the direction for further plans and calculations contained in Condition 16”: at [86]-[87];

5. the authorities on necessary implication “have generally only done so with regard to documents which were available at some stage before consent was granted” (at [88]), however, no authority stood in the way of such a course, and in his Honour’s view, “some degree of retrospective incorporation should be permissible to allow a document to form part of a consent through necessary implication” (at [89]);

6. his Honour therefore concluded at [90] that the September GCA Strategy should be incorporated by way of necessary implication because:

“(1) it is a revision of the GCA Main Road Strategy (which is expressly incorporated into the Consent through Condition 1) that seeks to rectify various insufficiencies contained in the earlier version;

(2) this finding is necessary to allow s 80A(4) of the EPA Act, as it applies to Condition 16, to have practical effect;

(3) it was produced specifically to respond to the obligations contained in Condition 16; and

(4) it provides necessary details about where the Main Road pipe should be constructed.”

61. I respectfully disagree with this reasoning.

62. First, I do not understand the process of “retrospective incorporation” to which his Honour refers. The adjective “retrospective” appears to connote that a document brought into existence after the consent was granted somehow, and with retrospective effect, alters the legal meaning of the consent.

63. It is as well to recall what Spigelman CJ said in Winn v Director General of National Parks and Wildlife [2001] NSWCA 17; 130 LGERA 508 at [4]:

“A public document, such as a development consent, constitutes a unilateral act on the part of the consent authority expressed in a formal manner, required and intended to operate in accordance with its own terms. It has, as Stein JA points out, an inherent quality that it will be used to the benefit of subsequent owners and occupiers. It is also a document intended to be relied upon by many persons dealing with the original grantee, or assignees of the grantee, in such contexts as the provision of security. In some respects it is equivalent to a document of title. It must be construed in accordance with its enduring functions.”

64. Powell JA agreed with Spigelman CJ in this respect, and, to the same effect, Stein JA wrote at [199]:

“As Hope J observed in Auburn Municipal Council v Szabo (1971) 67 LGRA 427, in determining what development a consent authorises, one looks primarily at the approval and construes it. The reason for this is that a consent is issued in rem and it would be inconvenient, to say the least, if one had to have regard to a series of documents to know what the consent authority intended to approve. The consent may incorporate another document if it does so expressly (not here relevant) or by necessary implication. In Szabo Hope J gave the example (at 434) of a council merely approving an application and no more. In such a case, the terms of the application would be incorporated by necessary implication.”

65. It is fundamental that people are able to determine with precision what is permitted by a development consent. As Sackville AJA said (with the agreement of McColl and Barrett JJA) in Bardsley-Smith v Penrith City Council [2013] NSWCA 200 at [66] (citations omitted):

“The general principle is that documents accompanying a development application are not to be taken as incorporated into the consent unless the incorporation is express or by necessary implication. ... The principle reflects the nature of a development consent, which enures for the benefit of subsequent occupiers and owners of the land and thus has an ‘in rem’ quality. ... It would create obvious difficulties if subsequent owners or occupiers had to search a series of documents to ascertain the terms or proper construction of a development consent ...”

66. The idea that the legal meaning of a development consent may alter by reference to a document not in existence at the time consent is granted is contrary to well-settled principle. What is more, the September GCA Strategy was on its face supplied in response to the consent. Using a document supplied pursuant to a consent to construe the consent which gave rise to the obligation to supply that document is, to say the least, circular. Senior counsel for Pasminco (who had not appeared at first instance) understandably did not attempt to support the retrospective aspect of the reasoning of the primary judge.

67. Secondly, in this Court, Pasminco submitted that at least when Council accepted the documents,

“by that time when you have a condition which requires some plans and specifications or calculations to be done, when they’re done and accepted that should at least henceforth be binding on the person who proffered them and any successor in title.”

68. I would not accept that submission as a potential justification of the reasons of the primary judge. A condition of consent may be that some plans or specifications or calculations be provided before particular work takes place. It does not without more follow that once those plans or specifications or calculations have been provided, the proponent and any successors in title are thereby bound.

69. There may and often will be a number of ways in which compliance with such a condition may be achieved. I see no reason in principle why the proponent or its successor in title may not form the view that there is another way of satisfying the condition in the consent, and supply further plans or specifications or calculations to that end.

70. Indeed, the September GCA Strategy made it plain that the detention basin indicated on the Main Pasminco site might never be built. It stated, in the section headed “Summary and Conclusions”, that:

“the detention basins designed and associated outlet structures provided for the catchment above Main Road are only an option and the future development may decide to split [t]he detention volume across multiple detention facilities within the catchment as opposed to the basins modelled in this report.”

71. Thirdly, it is one thing to hold a document to be incorporated by necessary implication into a consent. It is another to conclude that the legal meaning of the condition in the consent is altered by reference to that document. It is not clear that the primary judge’s reasons observed the distinction.

72. The ultimate question is one of construction of a condition in a development consent. The threshold question is as to the documents available to which reference may be made for the purpose of determining the legal meaning of the words of the condition. It was to that end that Meagher JA in Allandale Blue Metal Pty Ltd referred to documents which were expressly or by necessary implication incorporated into the consent. His Honour’s point, supported by a deal of authority, is that given the nature of a consent as a so-called right in rem and with enduring characteristics, a narrower approach to extrinsic material is required than the case, say, of a commercial contract.

73. Fourthly, I doubt that s 80A(4) of the Environmental Planning and Assessment Act 1979 (NSW) has much to do with the issue. Section 80A(4) empowers the consent authority to grant consent subject to conditions which are expressed so as to satisfy both paragraphs in the section, namely, a condition which identifies “one or more express outcomes or objectives that the development or a specified part or aspect of the development must achieve” and “clear criteria against which achievement of the outcome or objective must be assessed”. True it is that that subsection may expand the class of conditions which a consent authority may validly impose. However, the fact that a particular condition may be authorised by that source of power does not of itself alter the principles of construction which are used to fix its legal meaning, nor the extrinsic materials properly available to fix that legal meaning.

74. Another way of putting the point is this. The consent is at all times conditional. The question of fact whether or not the conditions subject to which consent has been granted is distinct from the legal character of the consent itself.

Grounds 6 and 6A – effect of the construction certificates

75. These grounds only arise if, contrary to my view, condition 16 required Bunderra to construct the pipe under Main Road, or if, again contrary to my view, the September GCA Strategy was incorporated by necessary implication in the consent, such that there was an obligation upon Bunderra to do so. However, I respectfully disagree with the primary judge’s analysis at [97] and [98].

76. The primary judge appears to have confined what was held in Burwood Council v Ralan Burwood Pty Ltd (No 3) [2014] NSWCA 404; 206 LGERA 40 at [202] to cases involving “supplementing minor changes in plans contained within a construction certificate that are generally consistent with the relevant consent”. That is not so. There was a large issue in Ralan as to the extent of the inconsistency between the development approval and the construction certificates. The Council contended that the inconsistencies were major. Ralan denied that contention, but it was common ground that there were “some obvious differences between the design and construction of the façade of the building contemplated by the DA and the design and construction of the façade contemplated by the CCs”: at [125]. The extent of that inconsistency was not able to be determined by this Court (the primary judge was held to have erred in having failed to do so): see at [151].

77. In those circumstances, there is no warrant for confining what was held in Ralan as to the operation of s 80(12) to “minor changes” in plans which are “generally consistent” with the consent. Ralan is not confined to minor divergences. Indeed Sackville AJA accepted at [148] that “[n]ot every difference between the DA and the plans and specifications furnished to the certifying authority and approved in the CCs amounts to an inconsistency in the relevant sense”.

78. Further, Ralan is not confined to cases where a construction certificate is “generally consistent” with a consent. To the contrary, Ralan applies where a construction certificate is inconsistent with a consent.

Remaining grounds and orders

79. I have nothing to add to what Payne JA has said as to grounds 7 and 8, with which I agree. I also agree with the orders his Honour has proposed.

80. PAYNE JA: This appeal concerns a dispute about the responsibility for the construction of part of a reinforced concrete pipe to be built under a roadway, in the Lake Macquarie area, which divides two parcels of land.

81. The roadway and a reserve either side of the roadway is owned by the second respondent, Lake Macquarie Council (the Council). One parcel of land adjoining the road, known as the “Main site”, is owned by Pasminco Cockle Creek Smelter Pty Ltd (subject to a Deed of Company Arrangement), the first respondent (Pasminco). The reinforced concrete pipe is part of a proposed drainage system identified in a Development Consent issued by the Council in relation to another piece of land adjoining the road (now owned by the appellant, Bunderra Holdings Pty Ltd, (Bunderra)), known as the “TriPad site”. Bunderra accepts that it must construct that part of the reinforced concrete pipe which is located on the TriPad site.

82. The primary judge concluded that the Development Consent issued in relation to the TriPad site required Bunderra to build the reinforced concrete pipe under the land (including the road) owned by the Council up to the boundary of Pasminco’s property.

83. The primary judge granted an injunction preventing the Council from issuing a subdivision certificate to Bunderra in respect of the development of the TriPad site and made declarations about the proper interpretation of the Development Consent, holding that Bunderra was required to construct the reinforced concrete pipe under the roadway owned by the Council up to the boundary of Pasminco’s property.

Relevant facts

84. Prior to March 2014, Pasminco was the registered proprietor of a number of parcels of land in the Lake Macquarie area where some years before it had conducted a metal smelting operation. As already described, the two principal parcels of land the subject of these proceedings were referred to by the parties as the “TriPad site” and the “Main site”.

85. The Main site occupies higher ground than the TriPad site. The Tripad site is adjacent to Cockle Creek, which flows into Lake Macquarie. Before any development of the TriPad site or the Main site could occur, it was necessary for the Council to be satisfied that adequate arrangements had been made for stormwater flowing from the Main site over the TriPad site and draining into Cockle Creek. The location of the Main site can be seen in the figure immediately below identified as “PROPOSED SITE”. The Main site incorporates a number of existing freshwater dams (shaded in blue) and one very large existing storage dam in the south-west corner of the site (also shaded in blue):

86. The TriPad site is essentially that parcel of land between TC Frith Avenue and Main Road shown in the figure immediately below. The figure below also depicts the various detention basins mooted to be built on the Main site as part of an as yet theoretical future development of the Main site:

87. On 24 March 2014, Pasminco lodged a Development Application with the Council seeking Development Consent for:

1. the subdivision of the TriPad site into 90 residential lots; and

2. a drainage reserve.

88. A more precise identification of the TriPad site and the proposed subdivision into 90 lots on that site, together with the drainage reserve, is shown in the figure immediately below:

89. In support of the development application for the TriPad site, Pasminco, the registered proprietor of both the TriPad site and the Main site at the time, lodged two interrelated stormwater management strategy reports (August GCA Strategies) prepared by GCA Engineering Solutions (GCA) which were titled:

1. “Proposed Subdivision, Tripad Site, Boolaroo – Stormwater Management Strategy (Revision 3)” dated 18 August 2014 (GCA TriPad Strategy); and

2. “Bunderra Subdivision, Main Road Catchment, Main Road, Boolaroo – Stormwater Management Strategy (Revision 2)” dated 18 August 2014 (GCA Main Road Strategy).

90. It is common ground that the August GCA Strategies described:

1. a proposed culvert to be built under Main Road;

2. the proposed stormwater detention basins to be constructed within the boundaries of the existing dam on the Main site; and

3. that part of the 1200mm diameter reinforced concrete pipe to be built under Main Road and over the land owned by the Council

4. as part of a proposed future development of the Main Road site.

91. On 17 April 2014, Pasminco entered into a contract for sale of the TriPad site to Bunderra, conditional upon the Council granting development consent to subdivide the TriPad site. Pasminco remained the registered proprietor of the Main site and planned to develop that site in the future.

92. On 2 September 2014, Development Consent for the TriPad site was granted by the Council subject to conditions. The Development Consent specifically incorporated, inter alia, the August GCA Strategies.

93. On 30 September 2014, GCA produced a revision of the GCA Main Road Strategy (the September GCA Strategy), which was provided to Council by Pasminco in accordance with Condition 16 in early October 2014. It was common ground on the appeal that the September GCA strategy envisaged that the 1200mm reinforced concrete pipe would be built under Main Road as part of the TriPad civil works.

94. On 13 October 2014, the Council sent a letter to Pasminco which stated it had undertaken a preliminary assessment of the September GCA Strategy to determine whether it satisfied the relevant aspects of Condition 16. That letter relevantly provided :

“…Council is satisfied with the approach and concepts of the strategy and is generally satisfied with the design of the proposed stormwater structures (these structures would need further refinement in the future and would be subject to detailed design).

Council has considered the proposed restriction on use of land and is happy to proceed down this path. Council will require that the restriction be a public positive covenant under section 88E of the Conveyancing Act 1919…”

95. On 31 October 2014, the sale of the TriPad site was completed and Bunderra became the registered proprietor of the TriPad land.

96. On 27 April 2015, a further report in accordance with Condition 16 “Re: 1A Main Road, Boolaroo – Tripad Subdivision (DA/442/2014) Main Road and Trunk Drainage Stormwater” (the External Design Report) prepared on behalf of Bunderra by Northrop Consulting Engineers Pty Limited (Northrop) was submitted to the Council. The External Design Report addressed the stormwater drainage system strategy and its design.

97. On 1 June 2015, the Council (which was the principal certifying authority as well as the consent authority) issued Construction Certificate SCC/11/2015 that allowed Bunderra to commence works on the “Road & Drainage Works for 90 Lot Residential Subdivision & Drainage Reserve”.

98. On 26 August 2015, the Development Consent (at the request of Bunderra) was modified by Council pursuant to s 96 of the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act). The modification allowed the subdivision of the TriPad site to occur in two stages, namely:

1. Stage 1, which involved subdividing part of the TriPad site to create 69 residential lots, 2 drainage reserves and 1 residue lot; and

2. Stage 2, which involved subdividing the remaining part of the TriPad site to create 21 residential lots and conducting some road widening.

99. The modification did not change Condition 16 (which is set out in full below), nor did it specifically address the question of stormwater management. The August GCA Strategies remained specifically incorporated into the Development Consent as modified under s 96. There was no reference to the September GCA Strategy in the modified Development Consent.

100. Since the s 96 modification, the Council has issued three further construction certificates in relation to the TriPad site, being:

1. Construction Certificate SCC/22/2015 for “Civil Works In Main Road For 90 Lot Residential Subdivision & Drainage Reserve”;

2. Construction Certificate SCC/11/2015/A, which modified SCC/11/2015 “To Reduce To 70 Lots”; and

3. Construction Certificate SCC/22/2015/A, which modified SCC/22/2015 to make “amendment To Drainage And Bus Stop”.

101. Construction Certificate SCC/22/2015 specifically incorporated the detailed stormwater drainage construction plans in the External Design Report by stamping each page of those voluminous plans. It was common ground on the appeal that those detailed plans in the External Design Report approved by the Council as part of the grant of the Construction Certificate did not require Bunderra to build the reinforced concrete pipe under the land (including the road) owned by the Council up to the boundary of Pasminco’s property.

102. On 17 May 2016, Bunderra wrote to the Council seeking a subdivision certificate for the Stage 1 works.

103. On 16 June 2016, the Council issued a certificate of practical completion in respect of the Main Road Construction Certificate and the Modified Internal Works Construction Certificate. The only minor works which were listed as outstanding in these certificates are now completed . Relevantly, the reinforced concrete pipe under the roadway owned by the Council up to the boundary of Pasminco’s property was not listed as an “outstanding work” by Council with regard to the Stage 1 works.

104. It is common ground on this appeal that the 1200mm reinforced concrete pipe has been constructed by Bunderra to a pit near the edge of Bunderra’s property but the culvert under Main Road has not yet been constructed and the 1200mm reinforced concrete pipe has not been constructed to the boundary of Lot 1002, owned by Pasminco. The area of dispute between the parties is illustrated in the figure below, which figure is contained in the September GCA strategy. The box at the top of the figure (marked in red) is the junction adjacent to the edge of Bunderra’s property where the concrete pipe has been built to. The dotted line to the boundary of Lot 1002 is the part of the proposed concrete pipe in dispute in these proceedings. The remainder of the dotted line and the connection to “Basin No 3” are each proposed future stormwater detention measures which have not been built and, on the evidence, may be built in the future only if the Main site is developed:

105. A number of things may be noted about this figure. First, as earlier noted, the September GCA strategy envisaged that the 1200mm reinforced concrete pipe would be built under Main Road as part of the TriPad civil works. Secondly, the September GCA strategy envisaged that the 1200mm reinforced concrete pipe would be connected to a large concrete basin on the Main site, which on the evidence before this Court has not been built and, if Pasminco does not develop its site, may never be built. Thirdly, it was common ground on the appeal that Bunderra had constructed the 1200mm reinforced concrete pipe to the pit shown at the top of the figure in readiness for connection, should the Main site be developed in the future, with a reinforced concrete pipe connected to a new large concrete basin on the Main site.

106. On 1 July 2016 Pasminco commenced proceedings in the Land and Environment Court.

The Development Consent

107. Condition 1 of the Development Consent provided :

“1. Compliance with Conditions

The approval comprises the application, the plans, and the documents set out in the paragraph below and the conditions of consent. The proposed development may only proceed in accordance with these documents.

The development shall be carried out in accordance with the conditions of consent and the following documents (as may be varied by the conditions of consent):-

…

C. [the GCA TriPad Strategy]

D. [the GCA Main Road Strategy]…” (italics added)

108. Pausing here, Condition 1 of the Development Consent shows most clearly the battle lines drawn between the parties. Bunderra relies on the express incorporation in the Development Consent of the August GCA Strategies, which did not require it to construct the 1200mm reinforced concrete pipe under Main Road. Pasminco relies upon the power of variation in Condition 1, together with the construction of Condition 16 preferred by the primary judge, as providing the contrary.

109. Condition 16 is thus the focus of the present appeal. It states :

“16.    Stormwater Detention / Overland Flows

Council has relied on the information provided in the Stormwater Management Strategies by GCA in formulating this condition.

The Applicant shall show by plans and calculations that the flows from the catchment above Main Road are able to the [sic] safely conveyed past Main Road and through the [TriPad site] and under TC Frith Avenue. It shall be shown that the development runoff from within the Main Road and TriPad Sites does not exceed the capacity of any existing or proposed culverts under Main Road and TC Frith Avenue.

Any required stormwater detention structures shall be constructed with the civil works for the TriPad site. A covenant shall be placed over any required stormwater detention facilities that are on the main Pasminco [land] that are relied upon to “protect” the drainage downstream. The covenant shall be to the effect that the approved detention volumes and outflow rates from the facilities are to be maintained until such time as an approved replacement facility is operational.

Plans and calculations for such stormwater controls shall be submitted prior to the issue of a Construction Certificate and the works shall be completed as part of the initial construction work in the first stage of the development.”

110. Condition 17 of the Development Consent states:

“17. Disposal to Watercourse or Council Easement

The Applicant shall make arrangements for stormwater to be disposed of to either an existing Council drainage system or natural watercourse. Where applicable, the Applicant shall obtain for lodgement with Council written authority from affected owners agreeing to the discharge of stormwater across their properties prior to the issue of a Construction Certificate.

The Applicant shall subsequently create easements for drainage in favour of Council over those properties, prior to, or at the time of registration of the Final Plan of Subdivision.”

111. Condition 20 of the Development Consent states :

“20. Stormwater Standards

The Applicant shall arrange for the design and construction of stormwater drainage works in accordance with the requirements of the publications and standards in this consent.

No works shall commence on site prior to the issue of a Construction Certificate and all works shall be completed prior to the issue of a Subdivision Certificate.”

112. Condition 41 of the Consent relevantly states :

“41. Final Plan Submission

The Applicant shall submit an application for a Subdivision Certificate accompanied by an original copy of the Final Plan of Subdivision plus four (4) copies. The location of all buildings and/or other permanent improvements shall be indicated on one (1) full-size print. When all conditions of the Development Consent relating to this subdivision have been satisfactorily complied with the Subdivision Certificate will be issued.”

The August GCA Strategies

113. The August GCA Strategies (which were expressly incorporated into the Development Consent) essentially demonstrated two things:

1. once the Main site was developed, the existing pipes and culverts under Main Road would be insufficient safely to convey stormwater from the Main site over or through the TriPad site to safely drain into Cockle Creek; and

2. once the Main site was developed, it would be necessary to build a new stormwater detention facility on the Main site and connect it via a 1200mm diameter reinforced concrete pipe (running under Main Road) to the stormwater drainage facilities on the TriPad site to ensure stormwater could be safely conveyed from the Main site over or through the TriPad site to safely drain into Cockle Creek.

114. The GCA TriPad Strategy relevantly provided :

“2. STORMWATER MANAGEMENT STRATEGY

…

Existing stormwater flow from the upstream catchment that flows from the eastern side of the Main Road through proposed Ø1200 RCP [Reinforced Concrete Pipe] will be piped within the subdivision and redirected to bypass the proposed bioretention basin and will outlet to the existing culvert under T.C Frith Avenue. A concept horizontal layout is shown in Figure 4…”

115. The GCA Main Road Site Strategy proposed the discharge of stormwater by means of the Ø1200 culvert to be constructed under Main Road .

116. Under the heading “Summary and Conclusions” in the GCA Main Road Strategy the following matters, relevantly, were referred to as the “new Stormwater Strategy”:

“…

• Limiting the proposed culvert under Main Road to a Ø1200 RCP which relates well to the current TriPad Development Application and TriPad Stormwater Management Strategy.

The final positioning and sizing of the basins and outlet structures will be undertaken at the Development Application phase for the land above Main Road.”

117. As already noted, it was common ground that the August GCA Strategies did not require the construction of the reinforced concrete pipe under Main Road. So much was clear by the following statement in the GCA TriPad Strategy :

“5. SUMMARY AND CONCLUSIONS

…

A Ø1200 RCP network for the connection of the future culvert under Main Road from the Bunderra Subdivision to convey the detained 100 year ARI flow.

…” (italics added)

118. Moreover, “Figure 4” of the GCA TriPad Strategy shown at paragraph [*88] above, provides the following two notations with respect to the pipe proposed under Main Road :

“Ø1200 PIPE NETWORK TO PROVIDE CONNECTION FOR FUTURE CULVERT UNDER MAIN ROAD”

[and]

“Ø1200 RCP OUTLET (UNDER FUTURE DEVELOPMENT APPLICATION)”

The September GCA Strategy

119. The September GCA Strategy was produced, relevantly, to demonstrate “detail design plans and levels of the proposed basins to satisfy Condition 16 of the TriPad Development Application”. It included an amended Part 3.2 (Culvert Design) which states the following:

“3.2 Culvert Design

With the proposed basin immediately upstream of the culvert location the culvert will be an extension of the outlet pipe from the basin. The design is shown on Figure 9 & 10. The culvert has been designed as part of Condition 16 of the TriPad Development Application and should be constructed to the boundary of Lot 1002 as part of the TriPad works. The extension of the pipe within Lot 1002 and the basin construction shall be constructed upon future approvals of the land above Main Road.”

120. The September GCA Strategy depicted the location of each of the proposed basins on the Main site. Figure 4 depicted Basin 3 on the Main site above Main Road and also included was the following notation :

“Ø1200 RCP UNDER MAIN ROAD TO CONNECT TO DOWNSTREAM DRAINAGE NETWORK"

121. Figures 9 and 10 show the Main Road pipe by a series of dashed parallel lines running from the TriPad site to the boundary of the Main site, which they both describe as :

“Ø1200 RCP TO BE CONSTRUCTED TO BOUNDARY OF LOT 1002 AS PART OF THE TRIPAD WORKS”

122. As noted above, the letter Council provided to Pasminco on 13 October 2014 with respect to its preliminary assessment of the September GCA Strategy and in compliance with Condition 16, stated:

“Council is satisfied with the approach and concepts of the strategy and is generally satisfied with the design of the proposed stormwater structures (these structures would need further refinement in the future and would be subject to detailed design).”

123. The letter also provided the precise wording it recommended for the covenant required under Condition 16. A covenant between Pasminco and Council which contains substantially the same words as those proposed in the letter has been signed but is not yet registered .

Primary Judgment

124. The primary judge held that Pasminco was entitled to the relief it sought and made an order restraining the Council from issuing a subdivision certificate (pursuant to Condition 41 of the Development Consent) until Bunderra constructed the 1200mm reinforced concrete pipe under Main Road to the boundary of Pasminco’s property.

125. The primary judge construed Condition 16 as a provision drafted to achieve practical results. The primary judge was satisfied that the August GCA Strategies demonstrated that a reinforced concrete pipe under Main Road would need to be constructed at a future point in time (i.e. as part of a future development application). However, the primary judge was not satisfied that this conclusion carried any significant weight.

126. The primary judge found that Condition 1 provided that the August GCA Strategies could be varied by any of the terms of the Development Consent. The question was therefore whether Condition 16 varied the August GCA Strategies and required the reinforced concrete pipe to be constructed under Main Road as part of the TriPad subdivision works. The primary judge held that it did.

127. In construing Condition 16, the primary judge considered (at [71]) that it imposed two obligations on Bunderra, those being:

1. to construct “any required stormwater detention structures…with the civil works for the TripPad Site”; and

2. to undertake “works” relating to the “plans and calculations for…stormwater controls…as part of the initial construction work in the first stage of development”.

128. His Honour held (at [73]) that the reinforced concrete pipe was “a required part of the stormwater detention structures.” He also concluded that, as a proposed culvert under the Main Road, albeit that its primary purpose was to transport stormwater collected on the Pasminco land and carry it to the pipe network that forms part of the proposed civil works on the TriPad site, it could be distinguished from other works proposed in relation to the August GCA Strategies, such as the stormwater detention basins on the Pasminco land.

129. With regard to the second obligation, the primary judge accepted (at [74]) Pasminco’s submission that the August GCA Strategies demonstrated that the stormwater from Pasminco’s land could not be conveyed across the TriPad site without the Main Road pipe. Accordingly, in his Honour’s view, this obligation related specifically to the “plans and calculations” in the second paragraph of Condition 16, and, again, required that works be undertaken to ensure that there was sufficient capacity to convey water under Main Road, a purpose served by the Main Road pipe.

130. Accordingly, while his Honour accepted (at [75]) that the August GCA Strategies were inconclusive on the point of who should construct the Main Road pipe, he considered that “these two requirements to conduct works under Condition 16 [had], in effect and read in the context of the Consent as a whole, varied what was required under those documents in accordance with Condition 1”.

131. As to when the works were required to be undertaken, the primary judge found (at [76]):

“… The August GCA Strategies state that the works should be designed during the construction certificate stage of the stormwater detention structures on the Pasminco land and be the subject of a ‘future development consent’. However, this is inconsistent with the clear terms of Condition 16, which states that the works are to be conducted at least ‘with civil works on the TriPad site’, if not some point earlier during the ‘initial construction work’. In any event, it is clear that the Main Road pipe should be completed at some point before the other Consent works are completed. This interpretation is consistent with Condition 20, which requires that a subdivision certificate not be issued for Stage 1 unless the “construction of stormwater drainage works” is completed.”

166. This requirement is inconsistent with the construction of Condition 16 found by the primary judge. The requirement for the covenant applies to any required stormwater detention facilities that are on (present tense) the main Pasminco [land] that are relied upon to “protect” the drainage downstream. The clear purpose of the covenant is that until the Council has approved replacement facilities and those facilities are operational, after the Main site is developed, “the approved detention volumes and outflow rates from the [stormwater detention] facilities [that are on the Main site] are to be maintained”.

167. It is only when “an approved replacement facility is operational” on the Main Site that any change is contemplated by Condition 16. The correct construction of this requirement is that Pasminco, as a condition of the TriPad development it was then seeking, would agree to ensure that existing stormwater detention facilities on the Main site were maintained. It was only when “an approved replacement facility is operational” on the Main Site, i.e. when the new detention facilities were operational and connected via the reinforced concrete pipe under Main Road, as envisaged by the August GCA Strategies, that the status quo would change. That had the practical effect of ensuring that the TriPad site was protected from additional stormwater flows from the Main site until the Main site was developed. As part of any development of the Main site, the Council could ensure that any development would not increase the volume and rate of stormwater runoff over or under the TriPad site.

168. The respondent in this Court, but not before the primary judge, raised an issue about the correct understanding of the modelling in the August GCA Strategies and its relationship to the covenant. That issue was what the “undeveloped” model actually showed. The respondent submitted that the undeveloped model involved an “imaginary situation”, and that this supported the conclusion that the Council in Condition 16 had modified the August GCA Strategies to require Bundarra to construct the reinforced concrete pipe under Main Road as part of the civil works now. Ultimately, this point does not assist the respondent and tends only to underline the uncertainty as to the development of the Main site, however to explain why this is so it is necessary to consider in a little detail the content of the models.

169. Three stormwater drainage models are compared in the August GCA Strategies. The point of the models was to compare the figures for stormwater discharge at the “outlet”, being the existing culvert under TC Frith Avenue which drains to Cockle Creek, in a variety of circumstances including a one in 100 year rain event.

170. The first model was the “undeveloped” model. Somewhat curiously, the “undeveloped” model assumed only one freshwater dam on the Main site. It will be recalled that on the existing Main site there are two further freshwater dams and another large dam in the South-Western corner adjacent to Main Road. Under one in 100 year rainfall conditions, the “undeveloped” model showed a discharge at the outlet of 15.20 cubic meters per second.

171. The second model was a “developed” model, which assumed the development of the Main site and that the one freshwater dam on the Pasminco site remained . Under one in 100 year rainfall conditions, the “developed” model showed a discharge at the outlet of 22.20 cubic meters per second at the outlet (a 45% increase on the “undeveloped” results).

172. It is to be noted that the August GCA Strategies did not model the existing stormwater runoff facilities assuming that the Main site was developed, but that calculation is said to have informed the basis of the third model . The outcome of the “undeveloped” and the “developed” models are obviously different to the “existing” results by reason of the “existing” scenario having available four dams on the Main site and the “undeveloped” and “developed” scenarios having only one. Why Pasminco (and GCA) chose to model, both as “undeveloped” or “developed”, a version of the Main site with fewer stormwater detention facilities than those which existed in the real world is not explained in the evidence.

173. The third model was a “developed” model with “detention results”, which assumed the development of the Main site together with two new detention facilities, Basin A and Basin B . The 1200mm reinforced concrete pipe the subject of these proceedings would link Basin B, via a culvert under Main Road, to the new stormwater management system being built on the TriPad site. Under one in 100 year rainfall conditions, the “developed” model with “detention results” showed an outflow rate from Basin A of 1.92 cubic meters per second and an outflow rate from Basin B of 8.14 cubic meters per second. The August GCA Strategies make the point that the combined outflow of 10.60 cubic meters per second from both proposed Basins compares favourably with the “undeveloped” results of 15.20 cubic meters per second.

174. Pasminco’s submission that the “undeveloped” model is based on an “imaginary situation” is, in part, correct in that the model adopts as an assumption one only of the dams existing on the Main site in reaching its results. The same is true of the “developed” model. This conclusion does not, however, assist the construction of Condition 16 advanced by Pasminco.

175. Even assuming that there was confusion created about the precise identification of the “required stormwater detention facilities” for the purposes of the covenant in Condition 16, it is clear in the August GCA Strategies’ modelling that the reinforced concrete pipe under Main Road is part, and only part, of the third model – the “developed” model with “detention results”. That model was relevant only in circumstances where in the future the Main site was developed. The connection of the reinforced concrete pipe to Basin B and the civil works under Main Road were expressly contemplated to occur in the future. The covenant requirement in Condition 16 was intended to maintain existing stormwater flows from the Main site. The construction of the reinforced concrete pipe under Main Road had nothing to do with maintaining existing stormwater flows from the Main site. Bunderra’s submission that the pipe under Main Road to the boundary of Pasminco’s land was designed to be connected to a detention structure which had not yet been built and may never be built should be accepted. The building of the reinforced concrete pipe under Main Road was a part of a future stormwater solution in the event of the Main site being developed. It was not “required” by the Development Consent. The primary judge should have so concluded.

176. The second part of the critical obligation in Condition 16 is that the reinforced concrete pipe be a “stormwater detention structure”. The description “stormwater detention structure” is inapt as a matter of language to describe a reinforced concrete pipe designed to carry water from such a structure to Cockle Creek. The reinforced concrete pipe neither captures nor detains stormwater. In context, the pipe is not a “stormwater detention structure” as that phrase is to be understood in the Development Consent. So much is clear from the August GCA Strategies themselves which specifically identify the existing stormwater detention structures, being the dams on the Main site, and the new stormwater detention structures contemplated to be built on Pasminco’s land if the Main site is developed in the future, namely Basin A and Basin B.

177. Other Conditions of the Development Consent itself tell against the construction advanced by Pasminco. The content of Condition 17, and its place in the Development Consent, is inconsistent with a construction which identifies the reinforced concrete pipe as a “stormwater detention structure”. Both Condition 16 and Condition 17 address stormwater management. Condition 16 addresses stormwater detention and Condition 17 addresses “arrangements for stormwater to be disposed of to either an existing Council drainage system or natural watercourse” which is apt to deal with pipes through which stormwater travels rather than “detention facilities” where stormwater is trapped and stored.

178. The reference to “plans and calculations for such stormwater controls” to be submitted “prior to the issue of a Construction Certificate” in the last paragraph of Condition 16 does not lead to any different construction. The introductory paragraph to Condition 16 makes clear that it is the August CGA Strategies which have been relied upon in formulating Condition 16. Read as a whole, the requirements for “plans and calculations” about stormwater flows in the second complete paragraph of Condition 16 and the last complete paragraph of the Condition, do not impose any requirement on Bunderra to construct the reinforced concrete pipe under Main Road. The conclusion of the primary judge at [74] that “the August GCA Strategies demonstrate that the stormwater from the Pasminco land cannot be conveyed across the TriPad site without the Main Road pipe” does not lead to any different outcome.

179. Whilst it is true that in a scenario where the Main site was developed, the August GCA Strategies showed stormwater would need to be conveyed by the reinforced concrete pipe under Main Road to connect with the part of the reinforced concrete pipe built by Bunderra on the TriPad site, that conclusion does not provide a basis to conclude that Bunderra is required now to build the culvert under Main Road and extend the pipe over Council’s land in the expectation that Pasminco (or a successor in title) will decide one day to develop the Main site and for that purpose build a new detention facility of the kind envisaged as Basin B. The August GCA Strategies did provide that Bunderra was obliged to build that part of the reinforced concrete pipe located on the TriPad site. It was uncontentious on the appeal that it had done so and that if, in the future, the TriPad site is developed, that part of the pipe connecting to Basin B can be built under Main Road, and connected to Bunderra’s part of the pipe, as envisaged by the August GCA Strategies.

180. The primary judge erred in concluding that Bunderra was required to construct that part of the reinforced concrete pipe under Main Road. Condition 16 did not vary what was required by the August GCA Strategies. The reinforced concrete pipe under Main Road was not a “stormwater detention structure” within the meaning of Condition 16.

181. I would uphold grounds 1, 2 and 4 of the notice of appeal.

Ground 3

182. The primary judge held (at [90]) that the September GCA Strategy was retrospectively incorporated into the Development Consent by necessary implication for four reasons:

1. it was a revision of the GCA Main Road Strategy (which was expressly incorporated into the Consent through Condition 1) that sought to rectify various insufficiencies contained in the earlier version;

2. this finding was necessary to allow s 80A(4) of the EPA Act, as it applied to Condition 16, to have practical effect;

3. condition 16 required further plans and calculations to be submitted and the September GCA Strategy was produced to fulfil such requirement; and

4. it provided necessary details about where the Main Road pipe should be constructed.

183. It will be recalled that s 80A(4) of the EPA Act states:

“80A Imposition of conditions

…

(4) Conditions expressed in terms of outcomes or objectives

A consent may be granted subject to a condition expressed in a manner that identifies both of the following:

(a) one or more express outcomes or objectives that the development or a specified part or aspect of the development must achieve,

(b) clear criteria against which achievement of the outcome or objective must be assessed.”

184. The primary judge found (at [89]) that Condition 16 (made pursuant to s 80A(4)):

“…permits and requires, by its nature, an applicant to obtain further information to assess whether an outcome can be achieved after consent is granted.”

185. What followed was that the September GCA Strategy was incorporated into the Development Consent by way of retrospective incorporation and it further reinforced that Bunderra, rather than Pasminco, was required to construct the Main Road pipe.

Bunderra’s submissions

186. Bunderra submitted that in circumstances where the September GCA Strategy was not expressly incorporated into Condition 1 of the Modified Development Consent, it had no effect on the drainage strategy and the primary judge erred in finding that it was incorporated by necessary implication.

187. Alternatively, Bunderra submitted that if the September GCA Strategy was incorporated into the Development Consent by Condition 16, then the External Design Report (approved in the granting of Construction Certificate SCC/22/2015) was similarly incorporated because it was also submitted pursuant to the requirements in Condition 16.

188. Bunderra submitted that that Report did not require the construction of the Main Road pipe as part of the TriPad works, and therefore any requirement in the September GCA Strategy to construct the TriPad works was displaced by the External Design Report.

Pasminco’s submissions

189. Pasminco submitted that there was no reason to expect that Condition 1 would be amended to expressly incorporate the September GCA Strategy, as the modification did not raise any questions as to stormwater management, nor did it change Condition 16. The sole purpose of the modification was to provide for the development of the TriPad site to occur in two stages instead of one.

190. In respect of the alternative submission, Pasminco submitted that the External Design Report does not have the effect for which Bunderra contended for the following reasons:

1. it was premised upon the acceptance of the drainage strategy set out in the September GCA Strategy – so much is clear from its mention of it throughout the External Design Report; and

2. rather than modifying the September GCA Strategy, the External Design Report sought to provide Council with updated DRAINS modelling based on the drainage strategy set out in the September GCA Strategy.

Consideration of ground 3

191. The principles relevant to implied incorporation of documents in a development consent were described in detail by Meagher JA, with whom Ward JA agreed, in Allandale at [42]-[48]. The primary judge quoted part of the remarks of Meagher JA in Allandale at [43], but respectfully, did not apply the approach Meagher JA explained should be adopted.

192. There is no warrant derived from the approach identified in Allandale for the conclusion of the primary judge that the September GCA Strategy, which was prepared after the Development Consent, and which is inconsistent in material respects with the terms of the Development Consent, was capable of incorporation into the Development Consent by “necessary implication”.

193. What was required in the present case was an exercise in construction of the Development Consent. The meaning of the Development Consent must be determined objectively. As Meagher JA explains in Allandale, admissible evidence about surrounding circumstances to which regard may be had for the purposes of construing a development consent is more limited than that available in construing commercial contracts.

194. If it were the case that the September GCA Strategy was incorporated by “necessary implication” into this Development Consent, the protection afforded to subsequent owners and occupiers by the Development Consent would be affected. One overriding principle looms large here. That is the enduring function of the Development Consent as a document in which third parties, such as successors in title and security holders, have an interest. A third party searcher of the Council's development consent records would not know from the search that the September GCA Strategy was incorporated into the Development Consent. The third party searcher should not have to speculate.

195. Many of the relevant cases on this issue were set out by the primary judge at [88]. His Honour accepted that those authorities established that the incorporation of a document by necessary implication is “generally” only done with regard to documents which were available before the development consent was granted and usually as part of the development application. This is because, for the reasons explained by Meagher JA in Allandale, any other approach is heterodox and will usually lead to error.

196. This is not to say that a development consent may not be framed in terms of outcomes or objectives, such as to contemplate production of more detailed plans in the future. So much is clearly contemplated by s 80A(4) of the EPA Act. That section, however, provides no warrant for a conclusion that the September GCA Strategy was incorporated by “necessary implication” into this Development Consent.

197. For the same reasons that the September GCA Strategy was not incorporated in the Development Consent, the External Design Report was not incorporated in the Development Consent. It is unnecessary to discuss the construction of that External Design Report any further. It follows that ground 6 of the notice of appeal should be dismissed.

198. The primary judge’s finding that the September GCA Strategy was incorporated by “necessary implication” in the Development Consent must be set aside. Ground 3 should be upheld.

Ground 6A

Bunderra’s submissions

199. Originally, Bunderra applied for the Construction Certificates in relation to “[a]ll construction in a single stage”. Subsequently, Bunderra was required to apply for construction certificates in two stages . Those construction certificates were issued.

200. Bunderra submitted that the plans from the External Design Report approved by the Council as part of Construction Certificate SCC/22/2015/A were incorporated into the Development Consent pursuant to s 80(12) of the EPA Act. Those plans do not provide for the construction of the reinforced concrete pipe under Main Road.

201. It was submitted that Ralan was authority for the proposition that to the extent that there is an inconsistency between the plans and specifications incorporated in the Development Consent as part of the Construction Certificate, and the plans and specifications originally approved in the Development Application, the former must prevail.

202. The only outstanding works listed by the Council did not include anything to do with the reinforced concrete pipe. So much was clear in the Certificate of Practical Completion issued by the Council. As Mr Hemmings SC submitted :

“It’s [the Certificate of Practical Completion] certified by council that subject to the outstanding works handwritten at the bottom of each page, that the construction certificate has been satisfactorily completed. We had one CC for everything. They asked us to divide it into two, so we've got two CCs and then we've got two certificates of practical completion and it's things like that first thing with WAE plans, work as executed plans.

There's no suggestion that outstanding work under the CC is that we haven't built the 1,200 mm pipe. Indeed, to the contrary, the council is satisfied that we have satisfactorily completed the construction certificate that they issued to us in accordance with the Northrop report, which was the end of the continuum of the way in which the stormwater strategy was to be implemented.”

203. Bunderra submitted that the plans approved as part of the Construction Certificate SCC/22/2015/A do not provide for the construction of the Main Road pipe and pursuant to s 80(12) of the EPA Act these plans have been incorporated into the Development Consent (Ralan at 81). In those circumstances, Bunderra was not required to construct the reinforced concrete pipe under Main Road.

Pasminco’s submissions

204. Pasminco submitted that Ralan did not have the effect contended for by Bunderra. Pasminco submitted that the primary judge was correct in concluding that it does not follow from Ralan that a plan approved by a construction certificate prevails over an express condition of a development consent imposed under ss 80(1)(a) and 80A of the EPA Act. To the extent there is any inconsistency, the conditions of the consent must prevail. Accordingly, the construction certificate would not be validly issued as it would contravene cl 145(2) of the Environmental Planning and Assessment Regulation 2000 (NSW), which provides:

“…

(2) A certifying authority must not issue a construction certificate for subdivision work unless the design and construction of the work (as depicted in the plans and specifications and as described in any other information furnished to the certifying authority under clause 140) are not inconsistent with the development consent.

…”

205. It was submitted that it was open to Bunderra to apply now for a construction certificate and that the construction certificate could not affect the obligation imposed by Condition 16 of the Development Consent to build the Main Road pipe.

206. Pasminco submitted that to the extent the plans in the Construction Certificate prevail, it does not follow that those plans trump the express conditions of a development consent requiring something to be done. Pasminco argued that omitting a structure from plans submitted as part of a construction certificate did not relieve the party submitting those plans from building a structure originally required by the Development Consent.

207. Pasminco further submitted that the mere fact that the certificates of practical completion did not include the Main Road pipe (because it was not in the plans that had been approved) does not lead to any different result.

Consideration of ground 6A

208. The principal statutory provision which needs be addressed in considering this ground is s 80(12) of the EPA Act, which states:

“80 Determination

…

(12)    Effect of issuing construction certificate

If a consent authority or an accredited certifier issues a construction certificate, the construction certificate and any approved plans and specifications issued with respect to that construction certificate, together with any variations to the construction certificate or plans and specifications that are effected in accordance with this Act or the regulations, are taken to form part of the relevant development consent (other than for the purposes of section 96).”

209. In Ralan Sackville AJA (with whom McColl and Barrett JJA agreed), held:

“[201] To determine whether, on this assumption, Ralan breached s 76A(1)(b) of the EPA Act, it is necessary to consider s 80(12). It provides relevantly that if an accredited certifier issues a construction certificate, the certificate and any plans and specifications issued with respect to that certificate are taken to form part of the relevant development consent, other than for the purposes of s 96.

[202] In this case, an accredited certifier issued the CCs. They are valid, at least until set aside. The plain words of s 80(12) have the effect of deeming the plans and specifications issued by the accredited certifier with respect to the construction certificate to be part of the DA. To the extent that there is an inconsistency between those plans and specifications and the plans and specifications approved in the DA, the former must prevail. The legislation accommodates the possibility that an accredited certifier will issue a construction certificate in breach of cl 145(1) and s 109F(1) by according paramountcy to the plans and specifications referred to in the construction certificate.

[203] Neither party made any point of the concluding words of s 80(12) ‘(other than for the purposes of section 96)’. The words do not, in any event, detract from this construction of s 80(12). Section 96 of the EPA Act permits a consent authority to modify a consent. The evident purpose of the quoted words is to ensure that on an application under s 96, a subsisting construction certificate does not prevent the consent authority exercising its powers.”

210. No submission was made in this case that Ralan was incorrectly decided.

211. Although it is strictly unnecessary to determine ground 6A as I have concluded that the primary judge erred in his construction of Condition 16 of the Development Consent and in relation to the implication of the September GCA Strategy into the Development Consent, I would uphold this ground of appeal.

212. Construction Certificate SCC/22/2015/A granted by the Council to Bunderra, specifically adopted the construction plans contained in the External Design Report. Section 80(12) of the EPA Act deemed those plans and specifications to be part of the Development Consent.

213. Ralan at [202] is authority for the proposition that, to the extent that there is an inconsistency between those plans and specifications and the plans and specifications approved in the Development Consent, the former must prevail.

214. Ralan is authority to the contrary of Pasminco’s submission concerning the effect of cl 145(2) of the Environmental Planning and Assessment Regulation. In that case what was approved by the Construction Certificate was inconsistent with the subject matter of the original Development Consent. Nevertheless, the plans and specifications approved by the private certifier as part of the Construction Certificate were incorporated into the Development Consent and, to the extent of inconsistency, prevailed over those plans and specifications originally approved in the Development Consent.

215. Even assuming that Bunderra was obliged prior to the issue of the Construction Certificate by the Development Consent to construct the reinforced concrete pipe for either of the reasons the primary judge gave, Ralan is not distinguishable on the basis that the plans approved as part of the issue of the Construction Certificate related to lesser (rather than greater) works than those required by the original Development Consent. A comparison of the plans approved as part of the Construction Certificate requiring construction of a lesser structure compared to, on the primary judge’s construction, the plans approved by the Development Consent gave rise to “an inconsistency” within the meaning of Ralan. Ralan, accordingly, required paramountcy to be given to the Construction Certificate plans.

216. Accordingly, in the present case there was no basis for the primary judge’s decision that the Development Consent required Bunderra to build the remaining part of the reinforced concrete pipe, even assuming he was correct in his construction of Condition 16.

217. I would uphold Ground 6A.

Ground 7

Bunderra’s submissions

218. Bunderra submitted that the following finding by the primary judge at [2] was not open to his Honour on the evidence:

“…there are substantial issues with flooding on the TriPad site at least partially as a result of runoff from the land retained by Pasminco.”

219. Bunderra submitted that this finding relied on evidence that was ruled inadmissible, that being paragraphs [6]-[8] of the affidavit of Wayne Woodward affirmed on 29 June 2016 ).

220. Bunderra further submitted that such a finding may have elevated his Honour’s concerns regarding the nature of the stormwater management required on the site.

221. Bunderra also noted that the External Design Report provides :

“Stormwater discharged from the Main Site area is currently restricted under the conditions of an Environment Protection License…” [sic, as in original.]

222. Further, the GCA Main Road Strategy states that the dams that exist on the Main Site :

“…prevent runoff from the existing site as the current discharge control requires onsite treatment prior to discharge to the downstream drainage network.”

223. In submissions in reply, Bunderra contended that there is a relevant distinction between flooding and being affected by stormwater.

Pasminco’s submissions

224. Pasminco submitted that no inference can be drawn that the primary judge’s statement in [2] was made in reliance on the evidence of Mr Woodward. In any event, Pasminco submitted that it is plain from the August GCA Strategies that the TriPad site is affected by stormwater runoff from the Main site.

Consideration of ground 7

225. I do not accept that the primary judge relied on evidence of Mr Woodward which had been rejected.

226. It is tolerably clear that the TriPad site is impacted by potential run off from Pasminco’s land. In a sense, that is what the entire case is about. But for potential stormwater issues as a result of runoff from the land retained by Pasminco, there would be no need for the existing stormwater retention and drainage facilities, the reinforced concrete pipe or the covenant required by Condition 16. The August GCA Strategies were designed to assuage the Council’s obvious concern that any development on the Main site should not create any additional risk of flooding on the TriPad site as a result of runoff from the land retained by Pasminco once developed.

227. The primary judge did not err in concluding that there “are substantial issues with flooding on the TriPad site at least partially as a result of runoff from the land retained by Pasminco”.

228. Nothing, however, turns on this finding for the purposes of this appeal. I would reject ground 7.

Ground 8

Bunderra’s submissions

229. Bunderra submitted that the finding by the primary judge at [15] was not open to his Honour on the evidence:

“[The Consent]…did not include Lot 2, which was (and is) owned by Council and used as a drainage reserve.”

230. The Consent expressly included Lot 2 in DP1183441 .

231. Bunderra submitted that this factual error led to the primary judge’s incorrect interpretation of Condition 16, such that his Honour may have considered that as there were no other stormwater detention facilities to be constructed under the Development Consent, in order for Condition 16 to have any work to do, it must have required the construction of the reinforced concrete pipe under Main Road.

Pasminco’s submissions

232. Pasminco accepted that the primary judge made a factually incorrect finding at [15]. However, Pasminco submitted that this factual error did not affect his Honour’s construction of Condition 16 and Bunderra’s submission that it did is inconsistent with the primary judge’s reasoning.

233. Pasminco submitted that contrary to Bunderra’s submissions, the fact that the Development Consent expressly included Lot 2 actually reinforces the conclusion that the requirement in Condition 16 – that any required stormwater detention structure be constructed – is readily understood as referring to stormwater detention structures outside Lots 1 and 2 in DP1183441, relevantly, the reinforced concrete pipe under Main Road.

Consideration of ground 8

234. No oral submissions were addressed by either party to this issue. It is clear that the primary judge erred in his factual conclusion concerning Lot 2 for the reasons accepted by Pasminco.

235. Contrary to Bunderra’s submission, the primary judge did not reason that as there were no other stormwater detention facilities to be constructed under the Consent, in order for Condition 16 to have any work to do, it must have required the construction of the reinforced concrete pipe under Main Road.

236. Contrary to Pasminco’s submission, the fact that the Development Consent expressly included Lot 2 does not assist in reaching a conclusion that Condition 16 provides that any required stormwater detention structures “outside Lots 1 and 2 in DP1183441” be constructed. For the reasons I have given, the conclusion that Condition 16 required the construction of the reinforced concreted pipe to the boundary of Lot 1002, in the absence of the construction of any other stormwater detention structures envisaged by the August GCA Strategies, is not warranted.

237. The error made by the primary judge addressed by ground 8 is made out but has no consequence.

Conclusion and orders

238. Since preparing these reasons I have had the benefit of reading the reasons of McColl JA and Leeming JA in draft. I agree with their Honour’s additional reasons. For the foregoing reasons, and those of McColl and Leeming JJA, I propose the following orders:

1. leave granted to the appellant to amend the notice of appeal to include proposed ground 6A;

2. a revised notice of appeal to be filed by the appellant with the registry of the Court within 7 days of the date of these orders;

3. appeal allowed;

4. orders 1-4 of the primary judge dated 21 December 2016 be set aside and in lieu thereof it be ordered:

1. application dismissed;

2. the applicant (Pasminco) to pay the first and second respondent’s costs in the Land and Environment Court as agreed or assessed;

5. the first respondent to the pay the appellant’s costs in this Court as agreed or assessed;

6. there is no order in relation to the costs of the second respondent in this Court with the intention that the parties bear their own costs.

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Endnotes

Amendments

20 October 2017 - Typographical error corrected at para [60]

Decision last updated: 20 October 2017