Central Coast Council v Pastoral Investment Land and Loan Pty Ltd

[2020] NSWSC 777

Supreme Court

New South Wales

Medium Neutral Citation:

Central Coast Council v Pastoral Investment Land & Loan Pty Ltd [2020] NSWSC 777

Hearing dates:

17 – 19 February 2020; 3 June 2020

Date of orders:

19 June 2020

Decision date:

19 June 2020

Jurisdiction:

Equity

Before:

Darke J

Decision:

Defendant’s challenges to validity and enforceability of Deed of Agreement not made out. Plaintiff’s claim for orders for specific performance declined.

Catchwords:

CONTRACT — breach — parties enter into a Deed which contemplates a re-zoning of defendant’s land so that it is partly zoned industrial and partly zoned conservation — Deed provides for defendant to lodge a development application to subdivide the land into two lots to reflect the zonings — Deed further provides for the defendant to transfer to the Council the conservation lot following approval of the subdivision — defendant lodges development application for subdivision and vegetation clearing — Council issues Notice of Determination consenting to subdivision but rejecting vegetation clearing — defendant appeals to Land and Environment Court — whether defendant by failing to lodge subdivision application breached implied term to do all that is reasonably necessary to secure performance of the Deed — held that Deed does not prevent exercise of rights of appeal — held that defendant not in breach where rights of appeal have not been exhausted — specific performance not granted

 

LOCAL GOVERNMENT — powers, functions and duties — property — whether Council entered into the Deed ultra vires or unlawfully — held that Council had statutory power to enter into the Deed

  LOCAL GOVERNMENT — powers, functions and duties — property — whether the Deed included an unlawful fetter upon the future exercise of Council’s statutory powers — held that Council did not fetter the future exercise of its statutory powers where Deed does not include any obligation upon the Council to grant development consent

Legislation Cited:

Amendment No 21 to State Environmental Planning Policy (Major Projects) 2005
Environmental Planning and Assessment Act 1979 (NSW), ss 8.13, 8.14
Environmental Planning and Assessment Amendment Act 2017 (NSW)
Interpretation Act 1987 (NSW), s 50(1)(e)
Local Government Act 1993 (NSW), ss 186(1), 187(1)
Local Government (General) Regulation 2005, cl 400(4)

Cases Cited:

Ansett Transport Industries (Operations) Pty Ltd v The Commonwealth (1977) 139 CLR 54
Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27; [2009] HCA 41
Australis Media Holdings Pty Ltd v Telstra Corporation Ltd (1998) 43 NSWLR 104
Ayr Harbour Trustees v Oswald (1883) 8 App Cas 623
Lacey v Attorney-General Qld (2011) 242 CLR 573; [2011] HCA 10
Nullagine Investments Pty Ltd v The Western Australian Club Incorporated (1993) 177 CLR 635
Pacific National Investments Ltd v Victoria (City) [2000] 2 SCR 919
Pastoral Investment Land & Loan Pty Ltd v Central Coast Council [2020] NSWLEC 1135
Peregrine Mineral Sands Pty Ltd v Wentworth Shire Council [2014] NSWCA 429
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355
Ransom & Luck Ltd v Surbiton Borough Council [1949] 1 Ch 180
Reid’s Farms Pty Ltd v Murray Shire Council [2010] NSWLEC 127
Searle v Commonwealth of Australia (2019) 100 NSWLR 55; [2019] NSWCA 127
Secured Income Real Estate (Australia) Ltd v St Martin’s Investments Pty Ltd (1979) 144 CLR 596
Swadling v Sutherland Shire Council (1994) 82 LGERA 431
Watson's Bay and South Shore Ferry Company Ltd v Whitfeld (1919) 27 CLR 268
Wingecarribee Shire Council v Pancho Properties Pty Ltd (2001) 117 LGERA 104; [2001] NSWCA 271

Category:

Principal judgment

Parties:

Central Coast Council (Plaintiff/Cross-Defendant)
Pastoral Investment Land & Loan Pty Ltd (Defendant/Cross-Claimant)

Representation:

Counsel:
Mr R D Marshall SC with Mr E A Walker (Plaintiff/Cross-Defendant)
Mr J R Young with Mr M F Fozzard (Defendant/Cross-Claimant)

  Solicitors:
Central Coast Council (Plaintiff/Cross-Defendant)
John A Diacopoulos (Defendant/Cross-Claimant)

File Number(s):

2019/65014

Publication restriction:

None

Judgment

Introduction

1. The plaintiff in these proceedings is the Central Coast Council. It is the statutory successor to the former Wyong Shire Council and the former Gosford City Council.

2. The defendant (“PILL”) is the owner of land in Sparks Road, Warnervale, being Lots 1 and 2 in Deposited Plan 1225652 (formerly Lots 62 and 64 in Deposited Plan 755254). The land, which has an area of more than 24ha, was at all relevant times within the boundaries of Wyong Shire Council, and is now within the boundaries of the Central Coast Council. In these reasons, the Wyong Shire Council and the Central Coast Council will each be referred to as “the Council”.

3. These proceedings concern a Deed of Agreement, respectively executed by PILL and the Council on 16 November 2006 and about March 2007, in relation to the land. In brief, the Deed of Agreement provided that the Council would use its best endeavours to obtain a certain re-zoning of the land and, if that occurred, PILL would lodge a development application which would provide for the subdivision of the land into lots that replicated the boundaries shown on the Gazetted Local Environmental Plan. The Deed of Agreement further provided that if the development application was approved PILL would, following the registration of the plan of subdivision, transfer to the Council for $1.00 the lot that contains that portion of the land that is of high environmental conservation value.

4. The Council alleged, and PILL admitted, that an amendment to the Wyong Local Environmental Plan 1991, effected on 7 November 2008 by Amendment No 21 to State Environmental Planning Policy (Major Projects) 2005, had the effect of re-zoning the land as intended by the Deed of Agreement. The re-zoning meant that part of the land was zoned IN1 General Industrial, and part was zoned E2 Environmental Conservation.

5. After a considerable delay, in December 2015 PILL forwarded to the Council a draft plan of subdivision of the land. It was proposed that two lots be created, being Lot 1 (the Conservation zoning land) and Lot 2 (being the Industrial zoning land).

6. Following further communications between the parties, PILL lodged a development application with the Council on 24 November 2017 (DA 1487/2017). The proposed development was described in the application as:

Subdivision (Boundary Adjustment) and Clearing of Vegetation ancillary to subdivision.

7. By that time, the plan of proposed subdivision depicted Lot 1 with an area of 21.39ha (excluding a small portion subject to a proposed road widening) and Lot 2 with an area of 3.15ha (excluding a small portion subject to a proposed road widening).

8. A process of assessment of the application followed, culminating in the Council issuing a Notice of Determination of Development Application on 7 August 2018. The determination was to give consent to the boundary realignment or subdivision only, not to the proposed clearing of native vegetation.

9. It would have been open to PILL to proceed with the approved subdivision. However, on 5 November 2018, PILL filed in the Land and Environment Court a Class 1 appeal against the Council’s determination. It is common ground that the lodgement of the appeal had the legal consequence that the consent issued on 7 August 2018 ceased to have effect (see s 8.13(1) of the Environmental Planning and Assessment Act 1979 (NSW)).

10. On 28 February 2019, the Council commenced these proceedings against PILL, seeking orders in the nature of specific performance of the Deed of Agreement. The essence of the Council’s claim, as it came to be expressed in an Amended Statement of Claim filed on 26 February 2020, is that by failing to take steps to advance the subdivision, PILL breached an implied term of the Deed of Agreement that obliged it to co-operate with the Council concerning the subdivision so that the Council would obtain the benefit of the agreement (see Secured Income Real Estate (Australia) Ltd v St Martin’s Investments Pty Ltd (1979) 144 CLR 596 at 607).

11. The dispute has been complicated by the fact that on 11 March 2020 PILL’s Class 1 appeal in the Land and Environment Court was dismissed by Senior Commissioner Dixon (see Pastoral Investment Land & Loan Pty Ltd v Central Coast Council [2020] NSWLEC 1135). PILL has lodged an appeal against that decision. This appeal is listed for hearing on 29 June 2020. There is a dispute between the parties as to whether, as matters stand following the dismissal of the Class 1 appeal, the consent issued by the Council on 7 August 2018 now has effect. In order to take into account these recent events, the Council filed a Further Amended Statement of Claim on 15 May 2020. PILL filed a Defence to that pleading on 29 May 2020.

12. PILL denies the Council’s claim on various grounds, including that it is not in breach of the Deed of Agreement. PILL also raises various matters said to go to the Court’s discretion to grant specific performance. By its Cross-Claim filed on 17 May 2019, PILL contends that the Deed of Agreement is void or otherwise not enforceable. First, it is said that the Deed of Agreement was entered into by the Council ultra vires or unlawfully in circumstances where there was no resolution of the Council authorising its execution. Second, it is said that upon its true construction, the Deed of Agreement constitutes an unlawful fetter upon the future exercise of the Council’s statutory powers. PILL also complains that the Council breached cl 3.3 of the Deed of Agreement by failing to notify it of the November 2008 re-zoning until May 2010. This is said to amount to laches or delay that affords a discretionary reason to decline relief to the Council. PILL also takes issue with the form of relief claimed by the Council. A number of other contentions that were identified in PILL’s Cross-Claim (and Reply to the Defence to Cross-Claim) were not the subject of submissions or otherwise not pressed.

The Deed of Agreement

13. The most salient provisions of the Deed of Agreement are as follows:

DEED OF AGREEMENT

Parties

Wyong Shirt Council of 20 Hely Street, Wyong. NSW 2259, New South Wales (Council)

and

Pastoral Investment Land & Loan Pty Limited ACN 000 897 674 of 21 Belmore Road, Randwick NSW 2031, and c/- Enfield Symonds Vince, Level 18, 55 Market Street, Sydney, NSW 2000 (Landowner).

Background

A. The Landowner is the registered proprietor Part Lot 62 and 64 DP 755245 otherwise known as 130-134 Sparks Road, Warnervale (“the subject land”). The subject land is approximately 24.796 hectares in size. A map showing the location and proposed zoning of the subject land is attached to this Deed as Annexure A.

B. The subject land lies within the boundaries of the local government area of Council.

C. Wyong Local Environmental Plan 1991 (“the LEP”) applies to the subject land. Pursuant to the LEP, the subject land is zoned 5(a) (Special Uses), 7(a) (Conservation) and 7(g) (Wetland Management).

D. Council has conducted a number of studies of the subject land. These studies have identified a portion of the subject land that is suitable for industrial development. The studies have also identified a portion of the subject land that is of high environmental conservation value.

E. Having regard to the objects of the Environmental Planning and Assessment Act 1979 (NSW) particularly (vi) regarding protection of the environment, Council is prepared to assume responsibility for that portion of the subject land that is of high environmental conservation value.

F. In order to preserve that portion of the subject land, the parties agree that it is necessary for the subject land to be appropriately rezoned, subdivided and the high environmental conservation valued land shall be transferred to public ownership.

Operative provisions

1.   Definitions and interpretation

In this Deed the following definitions apply:

0.1 Act means the Environmental Planning and Assessment Act 1979 (NSW).

Local Environmental Plan means any amendment to Wyong Local Environmental Plan 1991 regarding rezoning of any portion of the subject land.

Rezoning means a change of zoning, as described in the Wyong Local Environmental Plan 1991, from one or more zonings to another one or more zonings, or achieved through an amendment to the State Significant Development SEPP, 2005.

0.2 In the interpretation of this Deed, a reference to a party includes a reference to the servants, agents and contractors of the party, and the party’s successors and assigns.

2   Landowner’s responsibilities

The Landowner agrees to carry out the following matters:

Lodge a development application

2.1   The Landowner will lodge with Council a development application for subdivision of the subject land on the boundary established by the Local Environmental Plan within two months (but excluding from the calculation of such period of two months, the time being the days from and including 15th December in any year up to and including 15th January in the immediate following year) from the Council notifying in writing the Landowner that the Local Environmental Plan was published in the NSW Government Gazette. The development application will provide for the subdivision of the subject land into two or more lots, and will replicate the subdivision of the subject land as shown on the gazetted Local Environmental Plan.

Identify each lot

2.2   For the purpose of that development application and this Deed, the proposed lot containing that portion of the subject land that is of high environmental conservation value is to be identified as Lot 1. The other proposed lot(s) containing the remaining portion of the subject land is to be identified as consecutive lots (if proposed more than one) starting from Lot 2.

Obtain registration of the subdivision

2.3(a)   If development consent for subdivision to excise the conservation residue (Lot 1) and the proposed industrial area (Lot 2) is granted by Council, as outlined in Annexure A, Council will apply reasonable consent conditions to effect this what would commonly be regarded as mechanical provisions for the purposes of effecting such subdivision.

2.3(b)   The Landowner will, after release by the Council to the Landowner of the plan of subdivision as signed by the Council, lodge the plan of subdivision for registration at the Lands Department in Sydney, as soon as possible, with a view to such plan being registered within thirty days (subject to the workloads of the Lands Department). The Landowner agrees to meet all registration fees associated with the registration of the Plan of Subdivision.

2.3(c)   Further (re) subdivision and development of Lot 2 is beyond the scope of this Deed and is likely to require standard Council charges including Section 94 (under the Act) contributions as elaborated in Clause 4.4.

Transfer land to Council

2.4   In the event that Landowner is provided with written confirmation from Council that a Local Environmental Plan has been published in the NSW Government gazette or similarly achieved under the provisions of the State Significant Development SEPP, 2005, and also subject to the Landowner having received written advice from the Lands Development that the subdivision plan has been registered then the Landowner must transfer Lot 1 unencumbered and in fee simple to Council, within the time specified at clause 2.6 of this Deed.

2.4A(a)   Subject to the provisions of paragraph (b) of this clause, so long as the state and condition of Lot 1 as at the time of transfer of Lot 1 to the Council is consistent with the state and condition of the same area (to be Lot 1) as at the date of this Deed, the Landowner does not have to take any positive action in respect of the state and condition of such area.

2.4A(b)   The Landowner, at its cost, will remove from Lot 1 all foreign bodies, prior to the transfer of Lot 1 to the Council.

Amount of consideration for transfer

2.5   The Landowner agrees that the consideration for the transfer is the sum of $1.00.

Time in which to effect transfer

2.6   The Landowner agrees to use his best endeavours to provide to the Council the required form of transfer as soon as possible after it receives such form of transfer from the Council, so that the Council can after receipt of such transfer execute such transfer, attend to its stamping and then lodge for registration with the Lands Department such transfer. The Landowner will provide to the Council the Title Deed that it has in respect of such Lot 1 together with the transfer.

…

No objection

2.8   The Landowner will not object to any condition as a part of any development consent for development on Lot 2 or any future subdivision of Lot 2, requiring the restoration of that part of Lot 1 being the area in immediate proximity to the boundary between Lot 1 and Lot 2 (being the perimeter area of Lot 1) and which area is impacted by any works on Lot 2 arising out of any development on Lot 2. Any such necessary restoration works are to be undertaken at the cost of the owner of Lot 2 and completed prior to the release of subdivision certificate for any subdivision of Lot 2.

3   Council’s responsibilities

Council agrees to carry out the following matters:

Pursue rezoning in accordance with Council’s resolution

3.1   Pursue the terms of the Council’s resolutions made on November 24 2004, August 10 2005 and June 28 2006, and use its best endeavours to obtain a rezoning of the subject land into 7(a) (Conservation), 7(g) (Wetlands Management) and 4(e) (Regional Industrial and Employment Development), subject to the acknowledgements below.

Determine any subdivision application

3.2   Determine any development application by on or behalf of the Landowner and in accordance with the Act for subdivision of the subject land into two or more lots.

Provide written confirmation

3.3   Provide written confirmations to the Landowner, within seven (7) days of notice to Council, that a Local Environmental Plan or amendment to the State Significant Development SEPP, 2005 has been published in the NSW Government Gazette.

Status in the event of development being facilitated under the provisions of the State Significant Development SEPP 2005

3.4   Clause 3.1 is deemed to be satisfied if a similar planning outcome is achieved under the provisions of the State Significant Development SEPP 2005, as outlined in this Clause and Annexure A of this Deed.

4   Acknowledgements

The Landowner acknowledges and agrees as follows:

And the Council acknowledges and agrees as follows:

Council acts according to law

4.1 Council is a statutory authority vested with functions by legislation, including the Act, the Local Government Act, 1993 (NSW), the Threatened Species Conservation Act, 1995 (NSW), which functions must be exercised by Council according to law.

4.2   Council is required to carry out its assessment of any development application lodged by or on behalf of the Landowner in accordance with applicable legislation, including principally the Act, and may determine such an application in its sole discretion.

…

4.3   Insofar as any provision of this Deed constitutes an unlawful fetter on Council in its capacity as statutory authority required to exercise its statutory discretions, the provision is not binding and is subject to clause 10.

The Council believes that there is nothing contained in this Deed which constitutes an unlawful fetter on Council.

…

Council indications

4A   The Council informs the Landowner and indicates to the Landowner as follows:

(a)   that the area based on a map calculation being the indicative area of Lot 2 available for actual development is expected to be approximately of [sic] 2.38 hectares proposed to be zoned 4(e) and additional indicative area of approximately 0.41 hectares proposed to be a buffer to Sparks Road and about 0.15 hectares buffer to Lakes Anglican Grammar School as outlined in Annexure A.

(b)   the rezoning to proposed Industrial 4(e), the proposed Lot 2, has been determined in accordance with findings of various reports and after having made due consideration and that area of the proposed Lot 2 is as much as can be rezoned as proposed Industrial 4(e) based on proper consideration of such reports.

(c)   that the determination and calculation of such area for Industrial 4(e) rezoning has been determined on the same basis as and is consistent with the methods used for rezoning of other land in the general vicinity which is the subject of the rezoning process referred to in this Deed.

(d)   that the areas indicated in this clause are not final and are not necessarily accurate but have been made on the basis of its best estimates and on the basis of current information available to Council and on the basis of the Council acting reasonably.

…

8   Prompt execution

Each Party must promptly execute all documents and do all things that another Party from time to time reasonably requests to affect, perfect or complete this Deed and all transactions incidental to it.

9   Governing law and jurisdiction

This Deed is governed by the law of New South Wales. The Parties submit to the non-exclusive jurisdiction of its courts and courts of appeal from them. The Parties will not object to the exercise of jurisdiction by those courts on any basis.

10   Severability

If a clause or part of a clause of this Deed can be read in a way that makes it illegal, unenforceable or invalid, but can also be read in a way that makes it legal, enforceable and valid, it must be read in the latter way. If any clause or part of a clause is illegal, unenforceable or invalid, that clause or part is to be treated as removed from this Deed, but the rest of this Deed is not affected provided that the parties agree in writing that this is to be the case.

…

12   Not a planning agreement

This Deed is not a Planning Agreement as defined under the Act.

…

14. As noted earlier, the Deed of Agreement was executed by PILL on 16 November 2006. The instrument, in its executed form, was then sent to the Council. The evidence does not disclose the date upon which the instrument was executed by the Council. However, it is clear that the common seal of the Council had been affixed to the instrument and attested by the Mayor and the General Manager by no later than 8 March 2007. A handwritten note adjacent to the seal indicates that the seal was affixed in accordance with a resolution dated 10 August 2005.

Background to the Deed of Agreement

15. In broad terms, the Deed of Agreement can be seen to have arisen in the context of the creation by the Council of what was described as the Wyong Employment Zone (“the WEZ”). It appears that in the early stages of the development of the WEZ, PILL’s land was not included within the relevant area. However, as a result of discussions between PILL and the Council the land was included within the proposed area for the WEZ.

16. On 10 August 2005 the Council passed a resolution which included the following:

1.   That the original draft Wyong Employment Zone Local Environmental Plan Study Area Maps be amended to:

a.   Explore the feasibility of an industrial rezoning of a small portion of Part Lot 62 and 64 DP 755245, Sparks Road, Warnervale and rezone the remaining portion of the site to 7(a) (Conservation).

b.   Refine study area boundaries to allow for formalisation of conservation areas to be defined within the Wyong Employment Zone study area.

2.   That Council enter into a legal agreement with the owners of Part Lot 62 and 64 DP 755245, Sparks Road, Warnervale subject to the dedication, at no cost to Council of residual conservation areas which will be defined through the Wyong Employment Zone study process.

…

4.   That the General Manager be authorised to sign any legal agreement in respect to Recommendations 2 and 3 above.

17. It seems that by April 2006 discussions between the Council and certain owners of land within the proposed area of the WEZ, including PILL, had reached the point where draft Deeds of Agreement had been prepared which provided for small parts of the lands to be re-zoned for industrial purposes, and for the residual lands to be re-zoned for conservation and be transferred into the ownership of the Council. At a Council meeting held on 28 June 2006 a resolution was passed which included the following:

3   That Council authorise for the Common Seal of the Wyong Shire Council to be affixed to the final Deed of Agreement between the Wyong Shire Council and participating land owners.

4   That Council authorise the Mayor and the General Manager to execute all documents relating to the final Deed of Agreement between the Wyong Shire Council and participating land owners.

18. It is clear from the material that was before the Council on 28 June 2006 that the “participating land owners” referred to in the resolution included PILL.

19. In November 2006, negotiations took place between the Council and PILL, represented by Houseman Legal, in relation to the terms of the Deed of Agreement. On 16 November 2006 Houseman Legal sent a letter to the Council that enclosed a form of Deed of Agreement that had been signed by a director of PILL. The form of agreement contained certain handwritten changes. On 15 December 2006 Houseman Legal sent another signed form of Deed of Agreement to the Council. Houseman Legal requested that both copies of the agreement (which were in the same terms) be signed by the Council and that one “fully signed original” be returned as soon as possible. On 8 March 2007 an officer of the Council sent a letter to Houseman Legal which included the following:

I wish to inform that Council’s General Manager and the Mayor have signed the Deed of Agreement. Please find attached a copy of the signed document. I forwarded the signed original to Mr George Antonas from Pastoral Investment Land & Loan Pty Ltd, and another copy to the [sic] Einfeld Symonds Vince.

The forwarding of the documents to Messrs Antonas & Symonds accorded with the provisions of the Deed of Agreement concerning the sending of notices to PILL.

Salient events after entry into Deed of Agreement

20. As noted earlier, on 7 November 2008 Amendment No 21 to State Environmental Planning Policy (Major Projects) 2005 came into effect. PILL admitted that this amendment to the Wyong Local Environmental Plan 1991 had the effect of re-zoning PILL’s land as intended by the Deed of Agreement.

21. There is an issue as to when the Council provided written confirmation to PILL of the Gazettal of the re-zoning (see cl 3.3 of the Deed of Agreement). On 24 May 2010 the Council sent a letter to PILL which included the following:

As you would be aware the Wyong Employment Lands (WEZ) rezoning was gazetted on 7 November 2008. Notification was sent to all land owners within the WEZ as soon as Council was advised of the gazettal. A copy of the information sheet sent to you is attached for your information.

…

Council would like to meet with you to discuss arrangements for lodgement of the development application for the subdivision and discuss land transfer arrangements as per the Deed of Agreement between Pastoral Investment & Loan Pty Ltd and Wyong Shire Council dated 16 November 2006 (please see attached copy).

22. This letter suggests that notice of the re-zoning was sent to PILL shortly after 7 November 2008. Even though this notice or a record of it could not be found, I think it is likely that such a notice was sent by the Council and received by PILL. In any event, a delay in giving the notice until May 2010 would not in all the circumstances amount to a delay that would provide a reason to decline the Council’s present claim for specific performance. As will be seen, the parties took steps in purported performance of the Deed of Agreement much later, particularly in 2017 and 2018.

23. It appears that in November 2010 a meeting was held between representatives of the Council and representatives of PILL, but otherwise little seems to have occurred in relation to the Deed of Agreement until December 2015.

24. On 2 December 2015 Houseman Legal sent a letter to the Council which included the following:

Attached is a proposed plan of subdivision dividing the land into 2 lots, Lot 2 being the Industrial zoning land and Lot 1 being the Conservation zoning land.

The surveyors confirm that the boundary between proposed Lots 1 and 2 is also the zone boundary under the LEP.

Please let us have your informal approval of the plan before the client proceeds to lodge the plan for formal approval.

25. There was further correspondence between the parties in relation to the subdivision in February 2016. By March 2016 PILL had retained ADW Johnson as a consultant planner in relation to the matter. Mr Smith of ADW Johnson made contact with the relevant Council officer, Mr Scott Duncan.

26. On 1 May 2017 Mr Smith sent an email to Mr Duncan which included the following:

Following on from our recent meeting, and as discussed with the landowner (Pastoral Land and Investment Co) can you please confirm the level of information required by Council, if the landowners are to submit a DA for a 2 lot subdivision to effect the 2006 Deed – the intent of which was to undertake a paper subdivision expressly for the purposes of enabling a land transfer to Council.

Presumably the DA would not require any information in respect to access (including not need a referral to RMS), services, threatened species, flooding/drainage or any other matters that are likely to generate specific investigations, as such matters would be deferred for further investigation at the time a separate DA for the use of the industrial zoned component is lodged. Within your response, can you also confirm that Council would not impose any requirements under Sec 306 of the WMA 2000, and would issue a certificate under Sec 307. We Note Council’s letter dated 9/2/2016, but as discussed in the meeting, the landowners do not agree with Council’s request for information in this letter, which seems excessive considering the intent of the Deed (i.e. a simple paper subdivision – refer Deed Clauses 2.1, 2.3(a) “…Council will apply reasonable consent conditions…”, 2.3(c), etc.

27. On 6 July 2017 the Council sent a letter in response to Mr Smith’s email. The letter referred to various matters that would need to be attended to as part of the development application for the subdivision. On 28 July 2017 the Council advised Mr Smith that the proposed subdivision could be undertaken without providing services to the land.

28. The Development Application was eventually lodged by PILL on 24 November 2017. The proposed development was described as:

Subdivision (Boundary Adjustment) and Clearing of Vegetation ancillary to subdivision.

The Development Application (1487/2017) was accompanied by various documents including a Statement of Environmental Effects prepared by ADW Johnson. The Background section of that Statement included the following:

In the case of the subject land, a Deed of Agreement was entered into between the former Wyong Shire Council and the current owner of the site, Pastoral Investment Land and Loan Pty Ltd. In essence, the Deed sought the dedication of all environmental conservation land to Council once part of the site was zoned to industrial. In this case, the area identified for conservation is approximately 21ha, with the area identified for development approximately 3ha.

The land has been rezoned, but the provisions of the deed have not been completed.

…

The 2006 Deed effectively addressed a land zoning and transfer arrangement but did not make provision for any monetary credit (via a Section 94 Plan or other means), or “environmental credit” for the area to [be] transferred to Council upon later development of the industrial zoned component. The Deed makes provision for Dispute Resolution, which the landowners reserve the right to exercise.

The landowners maintain that they are not obviating the need for providing conservation land, but seek certainty that the development can occur on that part of the site so zoned, whilst the whole of the land remains in their ownership.

This application seeks to facilitate the intent of the 2006 Deed by both providing for a separate conservation lot and to provide certainty for that part of the lot so zoned for development.

29. Assessment of the Development Application was undertaken by a Council planner, Ms Salli Pendergast. On 22 December 2017 Ms Pendergast sent a letter to PILL which included the following:

However, the part of the proposed development that is for the purpose of the clearing of vegetation is not, considered to be ancillary to the subdivision of the land, and it is for a separate purpose. That separate purpose does not fall within any of the exceptions set out in cl. 6.4(4) of WLEP2013, and so cl. 6.3(2) of WLEP2013 prohibits the granting of consent unless a DCP that addresses all the matters in cl. 6.3(3) has been prepared.

It is therefore requested that the applicant amends the DA to delete the proposed clearing of the proposed smaller lot. This is because a DCP in compliance with Clause 6.3(2) of the WLEP2013 has not been prepared for the site.

Alternatively, the proposal would need to be pursued through lodgement of a concept DA pursuant to Section 83C of the Environmental Planning & Assessment Act 1979.

30. A meeting was held on 25 January 2018 between Ms Pendergast and Mr Smith to discuss the matter. It is evident that the central point of contention between the parties concerned the component of the application concerning the clearing of vegetation. It appears that PILL was not prepared to delete that element from the application, and the Council remained of the view that the clearing of vegetation was not truly ancillary to the subdivision of the land, and thus a DCP would have to be prepared, or alternatively the proposal would need to be pursued as a concept development application.

31. On 13 April 2018 Mr Smith sent an email to Ms Pendergast in which a request was made for the development application to proceed as a concept development application, the first stage of which would involve the effecting of the subdivision and the clearing of vegetation on proposed Lot 2.

32. On 31 May 2018 Ms Pendergast sent a letter to PILL in relation to various issues that had been identified in relation to the amended development application. Various communications passed between the parties in June 2018 in relation to these issues.

33. On 11 July 2018 Ms Pendergast recommended that the Council give partial consent to the development application by approving only the proposed subdivision, and not the proposed land clearing.

34. On 7 August 2018 the Council issued its Notice of Determination in respect of PILL’s development application. The Notice of Determination included the following:

Development Application No:   DA/1487/2017

Applicant:         Pastoral Investment Land & Loan Pty Ltd

Property Address:      Lot 1 DP 1225652, Lot 2 DP 1225652

130-134 Sparks Road, WARNERVALE NSW 2259

Proposal:         Boundary Realignment (Subdivision) only

Partial consent excludes proposed native vegetation clearing, land use and all other works.

Date from which this consent operates

In accordance with Section 4.20 of the Environmental Planning and Assessment Act 1979, this consent becomes effective and operates from the date of this notice being 7 August 2018.

Consent to lapse on

7 August 2013

Imposition of conditions

Subject to the provisions of Section 4.17 of the Act this Consent has been granted subject to conditions annexed to this consent.

Review of Determination

Subject to provisions of Sections 8.2, 8.3, 8.4 and 8.5 of the Act the applicant may make an application seeking a review of this determination, providing it is made in time for Council to determine the review within six (6) months of this determination.

Right of Appeal

Sections 8.7 and 8.10 of the Act confers on an applicant who is dissatisfied with the determination of a consent authority a right of appeal to the Land and Environment Court within six (6) months, from the date of determination.

…

1.   PARAMETERS OF THIS CONSENT

0.1 Implement the development substantially in accordance with the plans and supporting documents listed below as submitted by the applicant and to which is affixed a Council stamp “Development Consent” unless modified by any following condition.

Architectural Plans:

Description/Title	Drawing No	Rev	Date	Author
Plan of proposed subdivision	SC01	A	15.11.17	Trehy Ingold Neate

0.2 There is no clearing of native vegetation permitted under this consent.

0.3 There are no physical works or land use included under this consent. Any future development on the site will require further development consent that includes details for the servicing of the land for water, sewer, vehicular access, stormwater management and electricity.

0.4 Submit, and have approved, an application for a Subdivision Certificate to Council/Certifying Authority. The Subdivision Certificate application is to satisfy all of the requirements of the Environmental Planning and Assessment Regulation 2000.

…

6.   PRIOR TO ISSUE OF ANY SUBDIVISION CERTIFICATE

6.1   All conditions under this section must be met prior to the issue of any Subdivision Certificate.

6.2 Submit an application to Council under Section 305 of the Water Management Act 2000 to obtain a Section 307 Certificate of Compliance. The Application for a 307 Certificate under Section 305 Water Management Act 2000 form can be found on Council’s website Section 307 Certificate must be obtained prior to the issue of any Subdivision Certificate.

6.3   A Special Infrastructure Contribution shall to be made to the Department of Planning and Environment in accordance with the Special Infrastructure Contributions Plan – Wyong Employment Zone – Special Contributions Area unless an exemption is granted by the Department. Evidence shall be provided prior to the release of the Subdivision Certificate that the required contribution has been paid or an exemption has been granted.

6.4   Dedicate as public road, road widening as shown on the plan along the frontage of Sparks Road. Details are to be incorporated in the final plan of subdivision.

6.5   The Deposited Plan (DP) must include an Instrument under the Conveyancing Act 1919 for the following restrictive covenants; with Council having the benefit of these covenants and having sole authority to release and modify. Wherever possible, the extent of land affected by these covenants must be defined by bearings and distances shown on the plan.

Create a ‘Restriction as to User’ over Lot 2 restricting any development on the site until satisfactory servicing has been made for the supply of water, the disposal and management of sewage, the supply of electricity, stormwater drainage and or on-site conservation, and suitable vehicular access.

35. On 5 November 2018 PILL lodged a Class 1 appeal in the Land and Environment Court. In essence, the relief sought on the appeal was an order that DA/1487/2017 be modified by the granting of consent to the clearing of land as sought in the application and that condition 1.2 be deleted from the consent.

36. As noted earlier, that appeal was dismissed on 11 March 2020 and an appeal from that dismissal is listed for hearing on 29 June 2020. In these circumstances PILL has not taken any steps towards effecting the subdivision that is the subject of the approval given on 7 August 2018.

Was the Deed of Agreement entered into by the Council ultra vires or unlawfully?

37. This issue is raised by paragraph 37 of PILL’s Cross-Claim. The particulars set out in (ii) of that paragraph were not pressed (see Transcript page 67). Accordingly, the foundation of the argument is that set out in (i), namely, that the resolution of the August 2005 meeting did not authorise entry into the Deed of Agreement. That may be taken as a reference to the resolution passed on 10 August 2005 which is referred to above at [16].

38. PILL submitted that at least some of the studies referred to in “recital” D of the Deed of Agreement had not been completed or were not in existence as at 10 August 2005. PILL further submitted that the 10 August 2005 resolution did not authorise entry into an agreement to acquire land or the affixing of the Council seal to such an agreement as it was only a resolution to explore feasibility and identify residue conservation areas through a study process.

37. These matters were not further developed in oral submissions. In those submissions, reference was made to regulation 400(4) of the Local Government (General) Regulation 2005 which provides:

The seal of a council must not be affixed to a document unless the document relates to the business of the council and the council has resolved (by resolution specifically referring to the document) that the seal be so affixed.

It was then submitted that the 10 August 2005 resolution did not specifically refer to the Deed of Agreement, so the seal was not affixed in accordance with the requirements of the regulation. A similar submission was made in relation to the 28 June 2006 resolution that was relied upon by the Council as authorising entry into the Deed of Agreement. However, it was later accepted by counsel for PILL that even if regulation 400(4) was not complied with, such that the seal was not properly affixed and the Deed of Agreement could not take effect as a deed, the Deed of Agreement could still take effect as an agreement. Counsel further appeared to concede that subject only to the contention that the Deed of Agreement was void because it involved an impermissible fetter upon the exercise of the Council’s powers, the Deed of Agreement had force as an agreement (see Transcript page 117). In these circumstances it seems that the ultra vires argument was not pressed, although there was no formal abandonment of the point.

40. The Council submitted that the execution by the Council of the Deed of Agreement, which involved the acquisition of land by agreement, was authorised by s 187(1) of the Local Government Act 1993 (NSW) and by one or both of the resolutions of 10 August 2005 and 28 June 2006.

41. Leaving aside for the moment the argument that the Deed of Agreement involves an unlawful fettering of power, I do not accept that the Deed of Agreement was entered into by the Council ultra vires or unlawfully as alleged. In my opinion, the Council had the statutory power to enter into the agreement. At the time the agreement was entered into the Council was a body corporate (see s 220 of the Local Government Act as it then stood) and had power to do what was necessary for or incidental to the exercise of its functions (see s 50(1)(e) of the Interpretation Act 1987 (NSW)). In addition, by ss 186(1) and 187(1) of the Local Government Act, power was conferred upon the Council to acquire land by agreement for the purposes of exercising any of its functions. The Deed of Agreement is an agreement which involved a re-zoning and subdivision of land into two lots, with the lot containing the high environmental conservation value land to be transferred for $1.00 to the Council, which would henceforth assume responsibility for that land. It was not suggested that the subject matter of the agreement, including the acquisition of the land, involved purposes extraneous to the exercise of the functions of the Council. Further, entry into the Deed of Agreement was itself authorised by the resolution passed on 28 June 2006. That resolution plainly encompassed execution of a Deed of Agreement with PILL containing the terms finally agreed upon. It is not necessary to determine whether the Council seal was properly affixed, as counsel for PILL conceded that even if the Deed of Agreement was not effective as a deed, it would nonetheless have force as an agreement.

Does the Deed of Agreement constitute an unlawful fetter upon the future exercise of the Council’s statutory powers?

42. PILL invoked what it described as the general principle that a public authority cannot preclude itself from exercising important discretionary powers or performing public duties by incompatible contractual or other undertakings (see Ansett Transport Industries (Operations) Pty Ltd v The Commonwealth (1977) 139 CLR 54 at 74 per Mason J as his Honour then was). It was submitted that this principle applies to the Deed of Agreement. It was pointed out that unless the Council granted the development consent contemplated by the Deed of Agreement it would not obtain title to the high conservation value land under the agreement. It was submitted that it followed that the Council had impliedly agreed to grant the development consent. It was submitted that this implication was not overcome by the terms of cl 4.3.

43. In oral submissions, counsel for PILL referred to Peregrine Mineral Sands Pty Ltd v Wentworth Shire Council [2014] NSWCA 429. That case concerned an agreement by a council to fix annual rates over a 20 year period in respect of certain land at $100,000 subject only to annual adjustments of the type contemplated by s 506 of the Local Government Act. The Court of Appeal upheld the decision of Rein J that the agreement fettered the ability of the council to make rates in the future (see at [144]-[154] per Ward JA, with whom McColl and Meagher JJA agreed). Counsel also referred to the more recent decision of the Court of Appeal in Searle v Commonwealth of Australia (2019) 100 NSWLR 55; [2019] NSWCA 127 where there was extensive discussion by Bell P of the fettering of power doctrine.

44. The Council submitted that the Deed of Agreement was replete with provisions that expressly preserved the Council’s discretionary powers under the statutory regime. In that regard, particular reference was made to cll 4.1 to 4.4, and also cl 2.3(a). It was further submitted that no unlawful fetter should be found, especially given the limited nature of the contemplated development application, being for a simple subdivision by way of a boundary adjustment to accord with a zoning boundary. It was submitted that in relation to such an application, no or very little controversy would have been expected.

45. In dealing with this argument it is necessary to identify the obligations which the Council assumed under the Deed of Agreement, in particular in relation to the development application that is required to be lodged pursuant to cl 2.1. Clause 2.3(a) is directed to the determination of the application by the Council. (That the Council would deal with the application is explicitly recognised in cl 3.2.) The opening word of cl 2.3(a) reveals that the parties contemplated that the Council might not grant development consent in relation to the application. The clause goes on to state that if consent is given the Council will apply reasonable consent conditions to give effect to the subdivision the subject of the consent. Clauses 4.1 and 4.2 then state that the Council, as a statutory authority vested with statutory functions, is required to carry out its assessment of any development application “in accordance with applicable legislation” including the Environmental Planning and Assessment Act, and may determine such an application in its sole discretion. Clause 3.2 also refers to determining any development application in accordance with the Environmental Planning and Assessment Act.

46. I am unable to discern from the provisions of the Deed of Agreement, including those referred to in the preceding paragraph, the existence of any obligation on the Council to grant a development consent. No obligation of that character is expressed in the agreement, and no such obligation can be implied. I do not accept the suggestion that the Council should be taken to have impliedly agreed to grant development consent because the Council would otherwise not obtain the benefit of the agreement, being the transfer to it of proposed Lot 1. It may be accepted that the Council perceived a benefit in the performance of the agreement culminating in the transfer to it of the high conservation value land. It does not follow, however, that the Council bound itself (or sought to bind itself) to exercise its powers so as to grant development consent. There is in my view no room to imply a term to that effect, which would be inconsistent with the express terms found in cll 2.3(a), 4.1 and 4.2.

47. In my opinion the Deed of Agreement, properly construed in accordance with the well-established principles of construction of written agreements, does not include any obligation upon the Council to grant development consent.

48. As noted by Bell P in Searle v Commonwealth of Australia (supra) at [135], the fettering of power doctrine has been applied in many cases involving local government authorities. The present case is in my view quite unlike those referred to by his Honour.

49. Ayr Harbour Trustees v Oswald (1883) 8 App Cas 623 involved harbour trustees agreeing not to exercise statutory powers they had to erect buildings on certain land. Watson’s Bay and South Shore Ferry Company Ltd v Whitfeld (1919) 27 CLR 268 involved a Minister for Lands agreeing to exercise a power under the Crown Lands Consolidation Act 1913 (NSW) in a particular manner. In Ransom & Luck Ltd v Surbiton Borough Council [1949] 1 Ch 180 it was held that it was not competent for a local council to enter into a development agreement that included a promise on the part of the council not to exercise in the future certain planning powers in respect of the development. As mentioned earlier, Peregrine Mineral Sands Pty Ltd v Wentworth Shire Council (supra) involved an agreement by a council to fix annual rates over a 20 year period. Finally, in Pacific National Investments Ltd v Victoria (City) [2000] 2 SCR 919 the local authority was found to have entered into an agreement which included an implied undertaking on its part to keep in place an existing land zoning so as to allow for completion of a development project. The provision of the undertaking was held to be ultra vires.

50. In Ansett Transport Industries (Operations) Pty Ltd v The Commonwealth (supra) Mason J expressed the opinion (at 77) that the fettering of power doctrine is closely connected with the question whether the agreement is authorised by statute, or is prohibited by or incompatible with statute. Further, in Searle v Commonwealth of Australia (supra) Bell P stated (at [132]) that the starting point in these cases involves an examination of the statute by reference to which the power relied upon to enter the contract is exercised (see also at [150]).

51. I have already stated, in the context of another argument raised by PILL, that the Council had the statutory power to enter into the Deed of Agreement (see above at [41]). For the reasons set out above concerning the nature of the obligations assumed by the Council under the agreement in respect of the development application, I do not think that the Deed of Agreement can be said to include any fettering of the Council’s powers as alleged. There was no fettering of power as alleged in circumstances where the Council did not contractually oblige itself to grant development consent. In my view, the Deed of Agreement cannot be said to lack statutory authorisation, or be incompatible with the statutory powers that are the basis upon which the Council entered into the agreement.

Should orders be made for specific performance of the Deed of Agreement?

52. The conclusions I have reached as set out above at [41] and [51] mean that the challenges maintained by PILL to the validity and enforceability of the Deed of Agreement have not been made out. It is thus necessary to turn to the question whether the Council has made out its case for the making of orders for specific performance.

53. The first matter to consider here is whether PILL is in breach of the Deed of Agreement.

54. The primary claim made by the Council is to the effect that, by failing to lodge an application for a subdivision certificate as envisaged by the development consent, PILL has breached an implied term of the Deed of Agreement that obliged PILL to co-operate with the Council so that the Council would obtain the benefit of the provisions of the Deed of Agreement. The Council alleges that as a result of that breach it has been prevented from releasing the signed plan of subdivision as required by cl 2.3(b) of the Deed of Agreement.

55. The implied term asserted by the Council is of the type referred to by Mason J (as his Honour then was) in Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (supra) at 607 where his Honour said:

But it is common ground that the contract imposed an implied obligation on each party to do all that was reasonably necessary to secure performance of the contract. As Lord Blackburn said in Mackay v Dick:

“as a general rule…where in a written contract it appears that both parties have agreed that something shall be done, which cannot effectually be done unless both concur in doing it, the construction of the contract is that each agrees to do all that is necessary to be done on his part for the carrying out of that thing, though there may be no express words to that effect.”

It is not to be thought that this rule of construction is confined to the imposition of an obligation on one contracting party to co-operate in doing all that is necessary to be done for the performance by the other party of his obligations under the contract. As Griffith C.J. said in Butt v M’Donald:

“It is a general rule applicable to every contract that each party agrees, by implication, to do all such things as are necessary on his part to enable the other party to have the benefit of the contract.”

(See also Nullagine Investments Pty Ltd v The Western Australian Club Incorporated (1993) 177 CLR 635 at 659 per Deane, Dawson and Gaudron JJ.)

56. PILL did not take issue with these principles, but emphasised that such an implied term does not provide a basis to effectively re-write the terms of the contract. PILL submitted that the Deed of Agreement did not oblige it to accept any conditions imposed by the Council in the development consent granted pursuant to cl 2.3(a). Accordingly, it was submitted that it was open to it to challenge such conditions by means of an appeal to the Land and Environment Court, and no term should be implied that was inconsistent with the exercise of that right.

57. PILL referred to the additional observations made by Mason J in Secured Income Real Estate (Australia) Ltd v St Martin’s Investments Pty Ltd (supra) at 607-8 as follows:

It is easy to imply a duty to co-operate in the doing of all acts which are necessary to the performance by the parties or by one of the parties of fundamental obligations under the contract. It is not quite so easy to make the implication when the acts in question are necessary to entitle the other contracting party to a benefit under the contract but are not essential to the performance of that party’s obligations and are not fundamental to the contract. Then the question arises whether the contract imposes a duty to co-operate on the first party or whether it leaves him at liberty to decide for himself whether the acts shall be done, even if the consequence of his decision is to disentitle the other party to a benefit. In such a case, the correct interpretation of the contract depends, as it seems to me, not so much on the application of the general rule of construction as on the intention of the parties as manifested by the contract itself.

58. It may be added that, as stated by the Court of Appeal in Australis Media Holdings Pty Ltd v Telstra Corporation Ltd (1998) 43 NSWLR 104 at 124, “there cannot be a duty to co-operate in bringing about something which the contract does not require to happen”.

59. In my opinion, the Deed of Agreement includes an implied term to the effect that each party would do all that is reasonably necessary to be done on its part to facilitate the release by the Council of the signed plan of subdivision to PILL as required by cl 2.3(b). Clauses 2.3(a) and 2.3(b), when read in the context of the Deed of Agreement as a whole (including “recitals” D to F) clearly require that if any development consent is granted pursuant to cl 2.3(a), a process will be undertaken which culminates in the release of the signed plan of subdivision, thereby enabling PILL to fulfil its obligation to lodge the plan of subdivision for registration. The implied term operates in relation to that process.

60. However, I accept that the Deed of Agreement does not prevent PILL from exercising a right of appeal to challenge the conditions of any development consent. The recognition in cl 2.3(a) that the Council would apply “reasonable consent conditions…for the purposes of effecting such subdivision” at least leaves room for PILL to challenge conditions on the basis that they are not reasonable for such purposes. It should be noted that the Council does not explicitly allege that the institution and prosecution by PILL of its appeal in the Land and Environment Court constituted a breach of the Deed of Agreement. Rather, the suggestion seems to be that at least since the appeal was dismissed on 11 March 2020, PILL was obliged to submit the application for a subdivision certificate.

61. Once it is accepted that it was open to PILL under the Deed of Agreement to pursue appeal rights against the development consent, it follows in my view that the process referred to above, to which the implied term applies, is not required to commence until the appeal rights are exhausted.

62. The dismissal of PILL’s Class 1 appeal was not a dismissal following a contested hearing on the merits. An appeal against the dismissal is itself listed for hearing on 29 June 2020. There is no suggestion that this appeal has no prospect of success. I, of course, express no view about that. In these circumstances, it is my opinion that the obligations of the parties in respect of the envisaged process which culminates in the release of the signed plan of subdivision, have not yet arisen. Those obligations include those that derive from the implied term that I have found.

63. For these reasons, I accept the submissions of PILL that it is not in breach of the Deed of Agreement as alleged. The Court would not in these circumstances grant relief against it in the nature of specific performance of the Deed of Agreement.

64. These conclusions are sufficient to dispose of the Council’s claim for relief. It is not necessary to deal with the various other issues raised, including those going to the Court’s discretion to grant or withhold specific performance. There is one matter, however, about which I should briefly say something. This is the issue about whether the development consent has effect following the dismissal of the appeal on 11 March 2020. This issue involves a question of statutory construction, namely, the meaning of s 8.13 of the Environmental Planning and Assessment Act.

65. Section 8.13 provides:

(1)   If the granting of a development consent for development (other than State significant development) is the subject of an appeal made under this Division, the development consent ceases to have effect.

(2)   If an appeal under this Division is discontinued, the consent is revived on the discontinuation of the appeal.

(3)   A development consent that is granted as a result of a decision on an appeal under this Division is taken to be a development consent duly granted under Part 4. Any such development consent takes effect, subject to any order of the Court, on and from the date the decision is registered on the NSW planning portal.

(4)   If the effect of a decision on appeal is that development consent is refused, any development consent granted ceases to have effect.

(5)   Despite anything to the contrary in this section, a development consent is taken to have effect on and from the date fixed by—

(a)   a court (whether or not the Land and Environment Court) that finally determines an appeal on a question of law which confirms the validity of, or results in the granting of, the development consent, or

(b)   the Land and Environment Court, if the validity of a development consent granted by that Court is confirmed by, or the development consent is granted by that Court as a result of, such a final determination made by another court that has not fixed that date.

66. The section came into force on 1 March 2018 as part of the Environmental Planning and Assessment Amendment Act 2017 (NSW). It has thus been in operation at all relevant times, the Class 1 appeal having been lodged on 5 November 2018.

66. It was common ground that upon that lodgement, s 8.13(1) operated so that the development consent ceased to have effect. However, the parties were at odds as to whether, upon the dismissal of the appeal on 11 March 2020, the development consent again had effect. The Council, in support of its primary claim for relief, submitted that it did have effect. (The Council’s alternative claim for relief was put on the basis that the development consent did not have effect.) PILL submitted that the dismissal of the appeal did not revive the consent, as would have occurred had the appeal been discontinued (see s 8.13(2)).

67. It was stated in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27; [2009] HCA 41 at [47] that:

…the task of statutory construction must begin with a consideration of the text itself. Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention. The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy.

69. Earlier, in the joint judgment in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 it was stated at 384 that:

…the duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspondence with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the cannons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning.

(See also Lacey v Attorney-General (Qld) (2011) 242 CLR 573; [2011] HCA 10 at [43].)

70. There is considerable textual and contextual support for the construction advanced by PILL. The language of s 8.13, viewed in its context including s 8.14 (which provides the Land and Environment Court with all the functions of the consent authority whose decision is the subject of the appeal), can be read as providing that once an appeal is made under Division 8.3 of the Act, s 8.13(1) operates so that the relevant development consent ceases to have effect subject only to s 8.13(5), and can only be revived in the specific circumstances covered by s 8.13(2), namely, if the appeal is discontinued. Section 8.13(3) otherwise provides that a development consent can be granted as a result of an appeal under Division 8.3, and such a consent takes effect in accordance with that provision. On the construction favoured by PILL the relevant development consent would not have effect if the appeal was for whatever reason merely dismissed (for example, due to a failure to prosecute the appeal with due despatch, or due to a failure to provide security for costs).

71. However, it is relevant to observe that s 8.13 can be seen as the successor to the former s 83 of the Environmental Planning and Assessment Act. Prior to its repeal, s 83(2) of the Act provided:

(2)   Subject to subsection (3), if a determination is made by the granting of consent or the granting of consent subject to conditions, and an appeal has been made under s 97(1) or 98, the consent:

(a)   ceases to be, or does not become, effective pursuant to subsection (1), and

(b)   becomes effective and operates from the date of the determination of that appeal, except where that decision is to refuse development consent.

72. That provision had been interpreted as providing for the relevant development consent to be in a state of suspension pending the determination of the appeal. In Wingecarribee Shire Council v Pancho Properties Pty Ltd (2001) 117 LGERA 104; [2001] NSWCA 271 Giles JA (with whom Heydon JA and Young CJ in Eq agreed) stated at [27]:

The position in principle is affected by s 83(2) and (3) of the Act, whereby on the bringing of an appeal under s 97 the consent “ceases to be, or does not become effective” until determination of the appeal and, depending on the result, either “becomes effective and operates” from the date of determination or “is void and is taken never to have been granted”. The consent continues to exist pending the determination of the appeal, but in a state of suspension such that carrying out the development to which it relates is not authorised: Swadling v Sutherland Shire Council (1994) 82 LGERA 431. Until the appeal is brought, however, carrying out the development is authorised, and until that time the person above-mentioned may still act on the consent while objecting to the condition. If the appeal is successful and the condition is removed, then it is not necessary to do what the condition had required. If the condition remains, then the person must either remove the works or comply with the condition. The court addresses the matter afresh as the consent authority (for example, Nalor v Bankstown City Council [1980] 2 NSWLR 630), and there is, of course, a possibility that consent will be wholly denied, in which case the works must be removed.

73. Swadling v Sutherland Shire Council (1994) 82 LGERA 431, referred to by Giles JA in the passage cited above, concerned an earlier predecessor of s 8.13, namely, s 93 of the Environmental Planning and Assessment Act. Talbot J stated at 435:

Hemmings J acknowledged in Somerville v Dalby, that a consent does not cease to exist upon the lodgment of an appeal. It is not revoked nor is it void. Section 93(2)(b) recognises that the same consent can become effective and operative again at the later date of the decision on the appeal except where the decision is to refuse development consent. It is only if development consent is refused on appeal that the consent is void.

Although a consent ceases to be effective once an appeal is lodged, it nevertheless continues to operate. In other words it still has some life pending the decision on the appeal. Its existence continues even though it cannot be effective to allow the applicant to act on it by carrying out the subject development. That benefit, of acting on the consent, for the time being, is embargoed or suspended.

74. Talbot J went on to state at 436:

I agree with Hemmings J and his reasons given in Dalby that upon discontinuance of an appeal there is nothing to prevent a development consent becoming effective and operative.

75. In Reid’s Farms Pty Ltd v Murray Shire Council [2010] NSWLEC 127 Pepper J considered s 83 of the Act in circumstances where an appeal had been discontinued. Her Honour stated at [89]-[94]:

While the Class 1 appeal remained pending the operation of the consent, including the deferred commencement conditions, was suspended (Wingecarribee Shire Council v Pancho Properties Pty Limited (2001) 117 LGERA 104 at [27] citing Swadling v Sutherland Shire Council (1994) 82 LGERA 431 at 435).

Accordingly, by operation of s 83(2)(a) of the EPAA, immediately upon the granting of the consent as at 16 December 2008 the consent was suspended by reason of the appeal. What then occurred once the appeal was discontinued?

Section 83(2)(b) states that a consent becomes operative “from the date of the determination of” an appeal. In the present case, there was no determination of the appeal by the Court assuming that term is to be construed as only referring to a curial decision.

But this is not what the statute requires. The section merely refers to “the determination of that appeal” and not the ‘the determination by the Court of that appeal’ (cf s 82A(2A)(b) which expressly refers to a determination that “is disposed of by the Court”, emphasis added, or s 83(5)(a) which refers to “a court…that finally determines an appeal or a question of law”, emphasis added). Construed in accordance with its ordinary meaning the term “the determination” includes the “the act of coming to a decision; the fixing or settling of a purpose”, “a result ascertained; a solution” and “conclusion or termination” (Macquarie Dictionary, on-line edition). This includes the decision to discontinue the appeal (Swadling at 436).

To interpret the provision otherwise would produce the absurd result of the consent never having become enlivened, it having been suspended as a consequence of the appeal being lodged and not able to be revived (on the applicant’s logic) upon discontinuance. It would also be an interpretation that is inconsistent with the objects of the EPAA, which include the promotion and co-ordination of the orderly and economic use and development of land (s 5(a)(ii)).

It therefore follows that the December consent, which was not effective and operational until discontinuance of the Class 1 appeal on 23 July 2009, did not lapse on 16 June 2009.

76. The predecessor provisions had thus been interpreted to mean that a development consent the subject of an appeal ceased to be effective but nonetheless continued to exist pending the decision on the appeal. The development consent was described as being in a state of suspension, such that it was capable, depending upon the fate of the appeal, of becoming effective once again. This was held to be the position if the appeal was discontinued.

77. There is nothing the relevant Second Reading Speech that suggests an intention that s 8.13 effect a change to the existing state of the law. The Explanatory Memorandum merely states that the Schedule containing the amendments “revises and consolidates in a new Part 8 existing provisions throughout the principal Act about reviews of planning decisions and appeals to the Land and Environment Court”. In these circumstances it seems to me that it is strongly arguable that despite the textual changes brought about by the amendments (including the absence of a provision in similar terms to s 83(2)(b)), the expression “ceases to have effect” found within s 8.13(1) should be interpreted in a manner that is cognate with the previously understood notion of a suspension. That is to say, the development consent ceases to be effective but nonetheless continues to exist, in a state of suspension, such that it may become effective again.

78. The introduction of s 8.13(2), which is of course consistent with that interpretation, must then be considered. It can be suggested, on one side, that by this introduction the legislature should be taken to have intended to identify the only circumstance in which a development consent is revived such that the consent becomes effective again. On the other side, it can be suggested that the legislature should be taken to have intended only to reflect an aspect of the existing state of the law, as pronounced in Reid’s Farms Pty Ltd v Murray Shire Council (supra).

79. The question seems to me to be finely balanced, and I refrain from expressing any concluded view. I will state, however, that I am inclined to favour the view that s 8.13(2) does not identify the only circumstance in which a development consent, that had ceased to have effect pursuant to s 8.13(1), is revived so as to become effective again. Otherwise there would be something of a gap within s 8.13 whereby a development consent the subject of an appeal under Division 8.3 that is merely dismissed could not, for so long as the dismissal stands, become effective again. That seems to be an anomalous outcome. There is much to be said for the view that the legislature should be taken to have intended that in circumstances where an appeal is merely dismissed, the development consent that had hitherto been the subject of the appeal would become effective again, as would a development consent that was the subject of an appeal that is discontinued.

80. Before leaving this matter I should note that I do not think that PILL is correct to contend that when s 8.13(1) operates, the development consent “ceases to be” and “is no more”. If it was correct that the development consent ceased to exist, it could not be the subject of any appeal, including the appeal that PILL is currently pursuing.

Conclusion

81. For the reasons set out above PILL has failed in its challenges to the validity and enforceability of the Deed of Agreement, and the Council has failed on its claim for specific performance of the Deed of Agreement. The Further Amended Statement of Claim should be dismissed. So, too, should the Cross-Claim. In these circumstances, and given that the evidence and time taken at the hearing was divided roughly equally between the Council’s claims and PILL’s claims, it seems appropriate that each party bear its own costs of the proceedings. The Court will make that order unless either party indicates within 7 days that some other order is to be sought. In that event, directions will be made to facilitate the determination of any question of costs.

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Decision last updated: 19 June 2020