The Council of the Municipality of Ku Ring Gai v Mobil Oil Australia Ltd

The Council of the Municipality of Ku Ring Gai (the Council) and Mobil Oil Australia Ltd (Mobil) were the parties in this dispute before the New South Wales Court of Appeal. The core of the disagreement concerned the validity of a development consent granted by the Council to Mobil for the construction of a service station. The Council sought to revoke this consent, alleging that Mobil had failed to comply with a condition precedent to the consent, specifically the provision of a satisfactory traffic management plan.

The Court of Appeal was required to determine whether the Council had the power to revoke the development consent under section 334 of the Local Government Act 1919 (NSW) and, if so, whether it had validly exercised that power. Central to this was the question of whether the condition requiring a satisfactory traffic management plan was a condition precedent that had to be fulfilled before the consent could take effect, or merely a condition subsequent that, if breached, would render the consent liable to revocation.

The Court reasoned that the language of the development consent, particularly the phrase "subject to the satisfactory submission and approval of a traffic management plan," indicated that the plan was a condition precedent. Consequently, the consent had not become operative until this condition was met. As Mobil had not provided a satisfactory plan, the consent had not taken effect, and therefore the Council could not revoke a consent that had not yet been granted. The Court applied principles of contract and administrative law regarding the effect of conditions precedent and the scope of statutory powers.

The appeal was allowed, and the orders of the primary judge were set aside. The Court of Appeal declared that the development consent had not taken effect and that the Council's purported revocation was invalid.