District Council of Lower Eyre Peninsula v Allen - [2007] SASC 333

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
DISTRICT COUNCIL OF LOWER EYRE PENINSULA v ALLEN
[2007] SASC 333
Judgment of The Full Court
(The Honourable Chief Justice Doyle, The Honourable Justice Debelle and The Honourable Justice Nyland)
21 September 2007
ENVIRONMENT AND PLANNING - ENVIRONMENTAL PLANNING - DEVELOPMENT CONTROL - CONSENTS, APPROVALS AND PERMITS - CONDITIONS - CONDITIONS IMPOSED ON SUBDIVISION APPROVALS
Development consent – division of rural land – provisional development plan consent granted subject to conditions – condition required applicant to provide electrical services to allotments “to the requirements of the relevant authority” – whether condition fairly and reasonably relates to division of land in a Rural Living Zone – condition invalid – whether invalid condition can be severed – relevant principles – condition severable – appeal dismissed.
Development Act 1993 s 4, s 32, s 33, s 42, s 51; Development Regulations 1993 reg 51, reg 52, reg 53, reg 54, reg 55, referred to.
Allen Commercial Constructions Pty Ltd v North Sydney Municipal Council (1970) 123 CLR 490; Bathurst City Council v PWC Properties Pty Ltd (1998) 195 CLR 566; Kingsway Investments v Kent County Council [1971] AC 72; Lloyd v Robinson (1962) 107 CLR 142; Potato Marketing Board v Merricks [1958] 2 QB 316; Spurling v Development Underwriting (Victoria) Pty Ltd [1973] VR 1; Twenty Seven Properties Ltd v Corporation of Noarlunga (1975) 11 SASR 188, applied.
Fawcett Properties Ltd v Buckingham County Council [1961] AC 636; Pyx Granite Co Ltd v Ministry of Housing and Local Government [1958] 1 QB 554; R v North Hertfordshire District Council [1985] 3 All ER 486; Shrimpton v The Commonwealth (1945) 69 CLR 613; Western Australian Planning Commission v Temwood Holdings Pty Ltd (2004) 221 CLR 30, considered.

DISTRICT COUNCIL OF LOWER EYRE PENINSULA v ALLEN
[2007] SASC 333
Full Court: Doyle CJ, Debelle and Nyland JJ

DOYLE CJ: I would dismiss the appeal. I agree with the reasons given by Debelle J. There is nothing that I wish to add.
DEBELLE J. This appeal from a decision of a judge of the Environment, Resources and Development Court concerns the validity of a condition as to the supply of electricity imposed upon the grant of a development approval to divide land.
The respondent applied to the appellant District Council of Lower Eyre Peninsula (“the Council”) for provisional development plan consent to divide an allotment of land. The land is Section 168 in the Hundred of Lake Wangary. It has a total area of 4.25 hectares. It has designated public roads on two sides but those roads have not yet been constructed. The respondent applied to divide the land into two allotments of approximately equal size. The Council granted development approval subject to two conditions. The conditions were in these terms:
1The applicant shall, at his/her expense, provide safe and convenient access, to the satisfaction of the Works Manager, from each allotment delineated on the Plan of Division to the carriageway of any existing or proposed road.
2The applicant shall at his/her expense, provide all Electricity [sic] services to each allotment to the requirements of the relevant authority.
The Council’s reason for the conditions was to “ensure adequate compliance with the provisions of the Development Act 1993”.
The respondent appealed to the Environment, Resources and Development Court (“the Environment Court”) against the imposition of Condition 2 contending that it was ultra vires the Council and, therefore, invalid or, if valid, was unreasonable and should be severed from the grant of development consent. A judge of the Environment Court allowed the appeal and severed the condition from the grant of development approval. From that decision the Council appeals to this court.
The Meaning of the Condition
One initial difficulty with Condition 2 is to determine its meaning. What is meant by the expression “the relevant authority”? Another question stems from the fact that the requirements of the relevant authority are open ended so that the condition imposes an uncertain obligation upon the applicant as to the standard of services which might be reqired by the relevant authority. The third question is whether the condition imposes an obligation on the applicant to supply electricity to each allotment by a connection to a power line of ETSA Utilities or whether it permits the applicant to provide some other source of electricity (for example, by a generator, wind power or solar power) provided it complied with the requirements of the relevant authority.
For these reasons, the condition was open to attack on the ground of uncertainty. In the result, it was not necessary to explore that question. In the Environment Court, the parties proceeded on the footing that the condition meant that the applicant had to pay for a feeder line connecting the land to an existing power line of ETSA Utilities. The issue nevertheless demonstrates the need for Councils and other planning authorities to take care, when imposing conditions, to ensure that the meaning is clear and that the condition is capable of being enforced.
A Substantial Cost
The respondent’s land is in a rural area and is zoned Rural Living. It is no closer than 400 metres to an existing power line. That line is located on a road reserve adjoining section 170. If electricity is to be supplied to the subject land from that power line, it would be by means of a feeder line. In August 2006, ETSA Utilities estimated the cost of such a feeder line would be between $32,000 and $37,000.
There was evidence in the Environment Court that, at the present rate of occupation of rural living allotments in this area, it would be some years before the two allotments would be occupied. That evidence is not at all persuasive. There is nothing to prevent the allotments the subject of this application from being sold quite quickly. It will depend on whether they are attractive to a purchaser.
The Power to Impose Conditions
Section 42 of the Development Act invests a Council as a planning authority with power to impose conditions. The power is widely expressed. Section 42(1) provides:
A decision under this Division is subject to such conditions (if any) –
(a) as a relevant authority thinks fit to impose in relation to the development; or
(b) as may be prescribed by the regulations or otherwise imposed under this Act.
Section 42(2) provides for the enforceability of the conditions. Section 42(3) gives examples of conditions which might be imposed.
The power of a planning authority to impose conditions is not unlimited. It is a power which must be exercised in good faith and within limits which, though not specified in the Act, are indicated by the nature of the purposes for which a planning authority is entrusted with the discretion to impose conditions: Lloyd v Robinson (1962) 107 CLR 142 at 154. For the reasons which follow, the power to impose conditions is limited to the imposition of conditions that fairly and reasonably relate to the proposed development, in this case the division of the subject land: Twenty Seven Properties Ltd v Corporation of Noarlunga (1975) 11 SASR 188, where Wells J considered the extent of the power of the Planning Appeal Board (the predecessor of the Environment Court) to impose such conditions as it thought fit upon the grant of a development consent. He said (at 194):
Notwithstanding the breadth of the power conferred on the board, an army of authority supports the proposition that so wide a power must be read down to conform with the purposes and the structure of the Act. A planning authority is not at liberty to use its powers for an ulterior object, however desirable that object may seem to be in the public interest. If it mistakes or misuses its powers, however bona fide … the Court can interfere.
Two of the platoons which comprise the army of authority to which Wells J referred were Pyx Granite Co Ltd v Ministry of Housing and Local Government [1958] 1 QB 554 and Fawcett Properties Ltd v Buckingham County Council [1961] AC 636. Commenting on the second decision, Wells J said:
I would read the speeches of the law lords in this case as substantiating the proposition that in circumstances like the present a condition will be too wide if the result of its enforcement cannot fairly and reasonably relate to the permitted development or to some policy of the planning [sic] expressly or impliedly established by or pursuant to the Act.
As Wells J noted, that conclusion was consistent with the decisions of the High Court in Shrimpton v The Commonwealth (1945) 69 CLR 613 and in Lloyd v Robinson. These principles apply with equal force to the power to impose conditions vested in a planning authority by s 42 of the Act. Thus, a planning authority must exercise the power to impose conditions upon the grant of a development consent bona fide and in conformity with the purposes and the structure of the planning legislation. The power to impose conditions is limited to the imposition of conditions that fairly and reasonably relate to the proposed development or to some planning policy expressly or impliedly established by the Act.
This principle is well settled. Nothing is to be gained by listing all decisions where the principle has been applied. It is sufficient to note that in Bathurst City Council v PWC Properties Pty Ltd (1998) 195 CLR 566 the High Court, in a unanimous judgment, endorsed the observations of Walsh J in Allen Commercial Constructions Pty Ltd v North Sydney Municipal Council (1970) 123 CLR 490 at 499 to 500 that the power to attach conditions to development consents was to be understood
…not as giving an unlimited discretion as to the conditions which may be imposed, but as conferring a power to impose conditions which are reasonably capable of being regarded as related to the purpose for which the function of the authority is being exercised, as ascertained from a consideration of the scheme and of the Act under which it is made. This purpose may be conveniently described, in accordance with the expression used by Lord Jenkins in Fawcett Properties Ltd v Buckingham County Council as being “the implementation of planning policy”, provided that it is borne in mind that it is from the Act and from any relevant provisions of the Ordinance, and not from some preconceived general notion of what constitutes planning, that the scope of planning policy is to be ascertained.
The remarks of Wells J are entirely consistent with those observations. Lloyd v Robinson and Bathurst City Council v PWC Properties Pty Ltd were applied in Western Australian Planning Commission v Temwood Holdings Pty Ltd (2004) 221 CLR 30.
The question for determination on this appeal is whether Condition 2 is a condition which is within the scope and ambit of the relevant planning provisions and fairly and reasonably relates to the proposed division of the subject land. I turn to examine the legislative régime relating to planning controls.
The Statutory Scheme – The Development Act
In order to determine whether the condition is valid and enforceable it is necessary, therefore, to consider the legislative régime in relation to applications for land division. That requires consideration of ss 32, 33 and 51 of the Development Act1993 and Division 2 of Part 9 of the Development Regulations 1993. It is necessary to have regard also to the Council’s Development Plan.
Section 32 of the Development Act (“the Act”) provides that no development may be undertaken unless the development is an approved development. The division of an allotment of land is a development: s 4 of the Act. It is therefore, necessary, to obtain development approval to divide land.
Section 33 of the Act requires that an application for a development approval be assessed against the matters listed in that section. A development will be an approved development when all relevant consents have been obtained and a relevant planning authority has, in accordance with the Act, indicated that the development is approved: s 33(4) of the Act.
Section 33(1)(a) requires the application to be assessed against the Development Plan. I will return to the Development Plan.
Section 33(1)(c) prescribes conditions to be satisfied for a proposed division of land that is not being made under the Community Titles Act 1996 or the Strata Titles Act 1988, which is this case. Those conditions are that
(i)    the allotments resulting from the division may be lawfully used for the purposes proposed by the applicant;
(ii)     open space will be provided, or a payment will be made in accordance with the requirements imposed under this Act;
(iii)     adequate provision is made for the creation of appropriate easements and reserves for the purposes of drainage, electricity supply, water supply and sewerage services;
(iv)    the requirements of the South Australian Water Corporation relating to the provision of water supply and sewerage services are satisfied;
(iva)   where land is to be vested in a council or other authority – the council or authority consents to the vesting;
(v)     requirements set out in regulations made for the purposes of this provision are satisfied.
Nothing in paragraphs (i) to (iva) assists the resolution of the issues in this appeal. For present purposes, the only relevant provision, is paragraph (v). The regulations there mentioned are the Development Regulations 1993. It is, therefore, necessary to consider those regulations.
Section 33(1)(f) requires the application be assessed against any other matters that have been prescribed. That is a reference to other matters that have been prescribed by regulations. There is no relevant prescribed matter against which the application must be assessed other than the regulations to which I am about to refer.
Before doing so, it is necessary to note s 51 of the Development Act which provides that in the case of a development that involves division of land, a certificate is to be issued by the Development Assessment Commission if it is satisfied that the prescribed conditions as to development have been satisfied or that other arrangements of a kind provided for in s 51(1) have been made. Those requirements are set out in the regulations to which I now refer.
The Development Regulations
The relevant regulations are contained in Division 2 of Part 9 of the Development Regulations. They are regulations 49 to 54. For present purposes, it is sufficient to note briefly the terms of regulations 51 to 53 and regulation 55 and to focus particularly on regulation 54. I summarise regulations 51 to 53 and 55.
1Regulation 51 prescribes the width of roads and thoroughfares proposed for the divided land. (No roads are proposed in this division of land. None are necessary).
2Regulation 52 enables the Council to require proposed roads to be widened in the circumstances prescribed in the regulation.
3Regulation 53 enables Councils to specify the width of proposed roads and the manner of their construction.
4Regulation 54 is headed “Construction of roads, bridges, drains and services”. It is in these terms:
(1)The roadway of every proposed road within the relevant division must be constructed and where required by the council, paved and sealed with bitumen, tar or asphalt or other material approved by the council.
(2)Any bridge, culvert, or underground drain or inlet which is reasonably necessary for a proposed road in accordance with recognised engineering design practice must be constructed.
(3)Any footpath, water-table, kerbing, culvert or drain of a proposed road required to be formed by the council must be constructed.
(4)Any drain which is necessary in accordance with recognised engineering practice for the safe and efficient drainage of the land and for the safe and efficient disposal of stormwater and effluent from the land must be provided and constructed.
(5)Electrical services must be installed in accordance with recognised engineering practice, and where relevant, in accordance with any requirement imposed under regulation 30.
Regulation 30 relates to undergrounding of the electricity mains. The Council does not suggest that it has any relevance to the issues in this appeal. I will return to regulation 54.
5Regulation 55 contains a number of provisions which are supplementary to regulations 51 to 54 in relation to road construction and related aspects of road construction. It contains nothing in relation to the supply of the electricity.
It is apparent from that review that none of these provisions empower the Council to require roads, bridges, drains or other associated features of road construction to be provided on divided land. Instead, some regulations specify standards and others enable the council to specify standards in those instances where roads, bridges and any other works are proposed for the divided land. The only occasion where the council has power to require the provision of a facility not provided in the development proposal is where a bridge, culvert or underground drain or inlet is reasonably necessary as is provided in regulation 54(2), where any drain is reasonably necessary as required in regulation 54(4), or where the council requires footpaths, kerbing, drains and the like in relation to a proposed road as specified in regulation 54(3). Except in the instances provided in sub-regulation (2) and (3) of regulation 54, a council has no power to require road or other construction. The issue is well illustrated by the proposed division. As each allotment will have a frontage to a public road, it is not necessary for the respondent to provide a road on the divided land and the respondent does not propose any such road. There is, therefore, nothing upon which the terms of regulations 51 to 55 might operate. Thus, while it may prescribe standards, nothing in any of the regulations 51 to 55 empowers the council to require the respondent to provide a road.
Regulation 54(5) is not expressed in clear terms. As regulation 30 is not relevant for present purposes, attention can be focused on the first part of the regulation. The expression “Electrical services must be installed in accordance with recognised engineering practice” is capable of two meanings. On one interpretation, it means that a person dividing land must install electrical services and do so in accordance with recognised engineering practice. Alternatively, it can mean that, if electrical services are installed, they must be installed in accordance with recognised engineering practice. In my view, the latter is the true meaning because not every division of land requires the supply of electrical power to the newly created allotment or allotments. The purpose of regulation 54(5) is, therefore, to prescribe the standard to be complied with if electrical services are to be provided to the divided land. It does not require electrical services to be provided. As in the case with roads, if no electrical services are provided, there is no work for regulation 54(5). If, however, electrical services are provided, they must be installed in accordance with recognised engineering practice.
Thus, nothing in either s 33(1)(c) of the Act or in regulations 51 to 55 of the Development Regulations imposes any obligation on a person dividing land to provide electricity to the proposed allotments.
The Development Plan

Section 33(1)(c) requires regard to be had to any relevant Development Plan. The Council has a Development Plan. The subject land is within a Rural Living Zone created by the Development Plan. The Development Plan includes what it calls “council-wide provisions” relating to land division. The provisions for the Rural Living Zone also includes provisions relating to land division. If regard is had to the Development Plan and, in particular, to the council-wide provisions and to the provisions of the Rural Living Zone relating to land division, there is no provision which requires the supply of power to the proposed allotments.
In short, neither the Development Act, the Development Regulations nor the Development Plan contain any provision which expressly authorises a Council to require the supply of electricity to proposed allotments of divided land. The absence of any such power is readily understandable. Not every division of land requires that electricity be available to the new allotment or allotments. In addition, the owner of an allotment of land may have no desire either to construct a building on the land or to use electrical power. In a rural environment of the kind in which this division is proposed, it may be intended to use either solar power or wind power. In the case of a large sub-division of land to be used for residential purposes, market forces require the developer to provide electrical power to each allotment.
An Implicit Power?
The question whether the condition is valid does not depend solely on the question whether there is an express power to impose it. As is apparent from the discussion above, it will be valid if it is in conformity with or implements some planning policy implied by the planning régime and fairly and reasonably relates to the proposed division of the subject land.
Mr Swan, who appeared for the Council, submitted that, when read together, a number of the provisions of the Development Plan justified the Council imposing the condition. He referred to the council-wide provisions and, in particular, to
1Objective 8 which prescribes the objective of orderly and economic development;
2Principle of Development Control 25(f) which prescribes that land should not be divided where community facilities or public utilities are lacking or inadequate; and
3Principle of Development Control 50 which prescribes the development should be capable of being provided with an electricity supply, suitable wastewater disposal facilities, and an adequate and satisfactory water supply, without excessive public expenditure.
These are the only provisions in the Development Act, the Development Regulations and the Development Plan capable of sustaining Condition 2. However, when considered alone or together, none of those provisions avails the Council. While the objective of orderly and proper development might perhaps justify a condition relating to the supply of electricity in a subdivision of land for residential purposes in an urban area, it does not justify such a condition in the case of this division of one allotment of land into two allotments in a Rural Living Zone. In short, each case must be considered on its own facts and circumstances. The other two provisions are concerned to avoid premature division of land. The Council’s determination that the land can be divided is a determination that division is not premature. Power lines are not far distant from the subject land. The question then arises, what planning purpose is served by the proposed condition? None is apparent. The fact that the Council did not call any planning evidence in the Environment Court to support Condition 2 reinforces that conclusion. There is, therefore, no planning purpose or policy which justifies the condition.
Similarly, it is not possible to discern that the condition fairly and reasonably relates to the division of the land into two allotments in a Rural Living Zone. The purchasers of the allotments might not wish to have a connection to the existing power supply provided by ETSA Utilities. They might not wish to use electricity or, if they do, might prefer to provide it by other means.
For these reasons, Condition 2 is neither in conformity with the statutory scheme of planning controls nor does it fairly and reasonably relate to the proposed division of land. The condition is, therefore, invalid.
The Judge’s Reasons
The judge in the Environment Court identified correctly the test by which to determine the validity of the condition. She said:
The Council or indeed a relevant authority, has the power to impose conditions: see s 42 of the Development Act. However, this power is not unlimited. A condition must not be for an ulterior purpose, the result of its enforcement must fairly and reasonably relate to the proposed division of the land in the context of land division consent (as opposed to provisional development plan consent) and must not be so unreasonable that the direction to impose same could be said to have miscarried: Lloyd v Robinson (1962) 107 CLR 142.
She then reviewed the statutory scheme and, in particular, the relevant regulations and held that their purpose is to ensure that the services such as roads and electricity are provided by the developer and that they comply with prescribed standards. She then held that the Council had no power to impose a condition requiring the supply of electricity to the subject land so that the condition was unlawful. In case she had wrongly concluded that the condition was beyond the power of the Council, the judge then considered whether the condition was unreasonable and held that it was because the Council did not have a discretion in relation to the supply of electricity.
The judge, however, erred in two respects. First, she held that the provisions of the Development Plan were irrelevant because the respondent was seeking consent to a land division. That conclusion is manifestly at odds with s 33(1)(a) which requires all forms of development to be assessed against the appropriate Development Plan. The conclusion also fails to recognise that the Development Plan has provisions relating to land division. However, as is apparent from the reasons above, this error has no consequence in this appeal. The judge also erred in concluding that the power to impose a condition was beyond the power of the Council. The Council has power to impose conditions. The question the judge should have asked was whether the condition fairly and reasonably related to the proposed development. The judge ultimately did consider that question and held that it did not. For the reasons already expressed, the judge was correct in reaching that conclusion. The council’s reason for the condition was to “ensure adequate compliance with the provisions of the Development Act 1993”. As is apparent from the review of the relevant legislation and the Development Plan, the condition was in no respect necessary to ensure compliance with either the Development Act, the Development Regulations or the Development Plan. The condition did not fairly and reasonably relate to the proposed development. For all those reasons, the judge correctly decided that the condition was invalid.
I would, therefore, uphold the decision of the judge that the condition was invalid, albeit for different reasons.
Severance
The next question is whether the invalid condition can be severed. The relevant decisions were reviewed by Wells J in Twenty Seven Properties v Corporation of Noarlunga at 196-198. An invalid condition may be severed from a grant of development consent if the severance of the condition does not alter the meaning and operation of the planning consent: Potato Marketing Board v Merricks [1958] 2 QB 316 at 333 per Devlin J; Kingsway Investments v Kent County Council [1971] AC 72 at 90 per Lord Reid, at 102 per Lord Morris, and at 112 per Lord Upjohn; Spurling v Development Underwriting (Victoria) Pty Ltd [1973] VR 1 at 4-5 per Stephen J. If the invalid condition deals with a discrete matter it is more likely to be capable of severance: R v North Hertfordshire District Council [1985] 3 All ER 486 at 492.
In Kingsway Investments v Kent County Council at 90, Lord Reid expressed the position in these terms:
There is a surprising dearth of authority on this matter, for it may affect many classes of case besides those relating to town and country planning – cases where an authority has granted a licence or permission coupled with an ultra vires condition or limitation. The question of severance has often arisen with regard to contracts. But there the position is quite different. It is a general rule that the court will not remake a contract and to strike out one term and leave the rest in operation is remaking the contract. So it is not surprising that there can only be severance of a contract in exceptional circumstances.
But that is not so with regard to a unilateral licence or permission. Suppose that a planning authority purports to impose a condition which has nothing whatever to do with planning considerations but is only calculated to achieve some ulterior object thought to be in the public interest. Clearly, in my view, the condition should be severed and the permission should stand. But suppose, on the other hand, that a condition, though invalid because ultra vires or unreasonable, limits the manner in which the land can be developed, then the condition would not be severable, for if it were simply struck out the result would be that the owner could do things on his land for which he never in fact obtained permission, and that would be contrary to the intention of the statute.
Lord Morris said at 102:
There might be cases where permission is granted and where some conditions, perhaps unimportant or perhaps incidental, are merely superimposed. In such cases if the conditions are held to be void the permission might be held to endure just as a tree might survive with one or two of its branches pruned or lopped off. It will be otherwise if some condition is seen to be a part, so to speak, of the structure of the permission so that if the condition is hewn away the permission falls away with it.
At 113, Lord Upjohn said that it is necessary to examine whether the condition goes to the root of the development consent itself. I respectfully prefer the test of Lord Reid because, while the condition might lie at the heart of the Council’s decision to grant development consent, if the condition is not in conformity with a planning purpose under the relevant legislation, it cannot provide a basis for the decision. There is power, therefore, to sever where the invalid condition is merely incidental or is extraneous to the development consent or where it has no basis in planning policy.
This is a clear case. The Council imposed only two conditions upon the grant of development consent. The first condition required the respondent to provide safe and convenient access from each of the proposed allotments to the carriageway of any existing or proposed road. The second condition, that is to say, the challenged condition, deals only with the supply of electricity. Each of the conditions dealt with a discrete topic and is entirely independent of the other. The severance of the condition will not, in any respect, interfere with the meaning and effect of the first condition. The severance of the second condition will not strike at the Council’s reasons for imposing the conditions or in any other way adversely affecting the meaning and operation of the development consent. It was not material to the question whether the division of land was premature. The Council had already determined that issue by granting development consent. The condition serves no relevant planning purpose. The condition does not go to the basis on which the Council granted development consent. It is extraneous to it and can, therefore, be severed. It will simply mean that there will be no obligation upon the respondent in relation to the supply of electricity.
The judge in the Environment Court applied the reasoning of Wells J in Twenty Seven Properties v Corporation of Noarlunga and severed the consent. For the above reasons, she was correct to do so.
For all of these reasons, I would dismiss the appeal.
NYLAND J: I agree that the appeal should be dismissed for the reasons expressed by Debelle J. I have nothing to add.