TPSC PTY LTD (ACN 122 486 971) Applicant and KINGSTON CITY COUNCIL First Respondent and BONLEAF PTY LTD (ACN 082 546 049) Second Respondent and ROADS CORPORATION Third Respondent

Case •

[2019] VSCA 204

•

24 September 2019

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2018 0089

TPSC PTY LTD (ACN 122 486 971) Applicant
and
KINGSTON CITY COUNCIL First Respondent
and
BONLEAF PTY LTD (ACN 082 546 049) Second Respondent
and
ROADS CORPORATION Third Respondent

---

JUDGES: McLEISH, T FORREST and EMERTON JJA
WHERE HELD: MELBOURNE
DATE OF HEARING: 22 July 2019
DATE OF JUDGMENT: 24 September 2019
MEDIUM NEUTRAL CITATION: [2019] VSCA 204
JUDGMENT APPEALED FROM: [2018] VSC 313 (Quigley J)

---

PLANNING AND ENVIRONMENT – Appeal from Trial Division dismissing appeal on questions of law from VCAT – Kingston Planning Scheme – Activity Centre land separately owned by two developers – Permits granted in 2008 for each development – Agreement under s 173 of Planning and EnvironmentAct 1987 to provide for integrated development of Activity Centre land – Section 193 agreement provided for development substantially in accordance with permits issued in 2008 – One developer developed land in accordance with 2008 permit but one did not – 2008 permit expired before any development undertaken – Developer applied for new permit in 2014 for more intensive development – Other developer objected on ground that s 173 agreement precluded development other than pursuant to 2008 permits – Whether s 173 agreement precluded development other than in accordance with 2008 permits­ – Tribunal ordered permit to issue – Whether Tribunal misconstrued s 173 agreement – Whether Tribunal took into account irrelevant consideration in granting permit – Whether judge erred in construing s 173 agreement and upholding Tribunal decision – Planning and Environment Act 1987 ss 67, 77, 84B, 114, 126, 173, 174, 182; Victorian Civil and Administrative Tribunal Act 1998 s 148.

---

APPEARANCES: Counsel Solicitors
For the Applicant Mr P Zappia QC with
Mr R Chaile 		Planning and Property Partners
For the Respondents Mr N Payne QC with
Ms C van Proctor 		Best Hooper

McLEISH JA
T FORREST JA
EMERTON JA:

Introduction

  1. The applicant (‘TPSC’) seeks leave to appeal from the decision of the primary judge in the Trial Division dismissing TPSC’s appeal from the order of the Victorian Civil and Administrative Tribunal (‘the Tribunal’) directing that a permit be issued to the second respondent (‘Bonleaf’) for the use and development of land at 165-169 Nepean Highway and 8-10 Lower Dandenong Road, Mentone (‘the Bonleaf land’).

  1. TPSC is the successor in title to Fabcot Pty Ltd (‘Fabcot’) as the owner of land adjacent to the Bonleaf land at 171-181 Nepean Highway, Mentone (‘the Fabcot land’). 

  1. The Bonleaf land and the Fabcot land together make up the Thrift Park Activity Centre (‘the Activity Centre Land’).  In 2008, Fabcot and Bonleaf were joint proponents of Amendment C81 to the Kingston Planning Scheme, which, among other things, rezoned part of the Fabcot land and the Bonleaf land from Business 4 Zone to Business 1 Zone (now Commercial 1 Zone) and applied a Design and Development Overlay to the land in question. 

  1. Amendment C81 contemplated the grant of planning permits to each of Fabcot and Bonleaf to develop the land for shops, offices and some residential uses.  The permit application process contemplated by Amendment C81 resulted in the grant of a permit to Fabcot to develop the Fabcot land for a supermarket and specialist retail tenancies with ground level car parking, and the grant of a permit to Bonleaf to develop the Bonleaf land for two mixed-use buildings, including 40 residential dwellings, with some above ground parking and some basement parking. 

  1. We shall refer to these permits collectively as ‘the 2008 permits’ and individually as ‘the 2008 Fabcot permit’ and ‘the 2008 Bonleaf permit’.

  1. Amendment C81 required Fabcot, Bonleaf and Kingston City Council (‘the Council’) to enter into an agreement under s 173 of the Planning and Environment Act 1987 (‘the PE Act’) to further regulate the development of the Activity Centre Land and provide for the developers to make financial contributions for public works. On 26 October 2009 the parties, together with Roads Corporation (‘VicRoads’), entered into such an agreement (‘the s 173 Agreement’), the proper construction of which was the subject of the appeal to the Trial Division and is now the subject matter of this application for leave to appeal.

  1. The s 173 Agreement was registered and remains recorded on the certificates of title to the Fabcot land and the Bonleaf land.

  1. The s 173 Agreement relevantly contains arrangements for:

(a)               the construction, use and ongoing maintenance of the car parking and access roads on the Fabcot land and the Bonleaf land;

(b)               integrated vehicular and pedestrian access between the Bonleaf land and the Fabcot land; and

(c)               shared car parking on the Bonleaf land and the Fabcot land.

  1. More generally, the s 173 Agreement provides for contributions to the funding of road and other works on the Activity Centre Land.

  1. The 2008 permits were issued on 9 December 2009, after the parties had entered into the s 173 Agreement.[1]   

    [1]On 9 December 2009, Planning Permit KP 374/08 was issued in respect of the Bonleaf land and Planning Permit KP 375/08 was issued in respect of the TPSC land.

  1. Fabcot developed the Fabcot land in accordance with the 2008 Fabcot permit.  However, Bonleaf did not submit any plans to the Council for endorsement under the 2008 Bonleaf permit.  The Bonleaf land has not been developed in accordance with the 2008 Bonleaf permit or otherwise, and the 2008 Bonleaf permit has expired.  It is now impossible for Bonleaf to develop the Bonleaf land pursuant to the 2008 Bonleaf permit.

  1. On 13 August 2014, Bonleaf applied to the Council for a planning permit for the construction and use of a mixed use development comprising, among other things, retail premises, a café, a medical centre and 240 dwellings (‘Bonleaf’s 2014 permit application’).  This represents a more intense form of development than was permitted by the 2008 Bonleaf permit and, importantly for TPSC, it makes no provision for ground level car parking.  All car parking on the Bonleaf land is now proposed to be provided at basement levels, that is, underground.

  1. On 18 November 2015, the Council resolved to issue a Notice of Decision to Grant a Permit in respect of Bonleaf’s 2014 permit application (‘the NOD’).  The NOD was issued on 20 November 2015. 

  1. On 9 December 2015, TPSC filed an application in the Tribunal under s 82 of the PE Act for review of the Council’s decision to issue the NOD.[2] On 23 December 2015, Bonleaf filed an application under s 80 of the PE Act for review of the permit conditions contained in the NOD.[3]  We shall refer to these two proceedings in the Tribunal as ‘the permit proceedings’.  The first of these two proceedings is the genesis of the present application for leave to appeal.

    [2]VCAT reference P2542/2015.

    [3]VCAT reference P2673/2015.

  1. In total, the Tribunal had before it five applications arising from Bonleaf’s 2014 permit application, four of which were brought by TPSC. In addition to the application for review of the permit decision under s 82 of the PE Act, TPSC made applications:

(a) pursuant to s 149B of the PE Act, seeking a declaration that the Council failed to lawfully consider TPSC’s request that it give ‘in principle’ support to end or amend the s 173 Agreement;[4]

[4]VCAT reference P817/2016.

(b) pursuant to s 149(1)(b) of the PE Act, seeking review of the Council’s failure to consent[5] to TPSC not being required to make all car parking spaces available to the general public and visitors to the Bonleaf land;[6] and

(c) pursuant to s 149A of the PE Act, seeking a declaration that the s 173 Agreement expired on 26 October 2016[7]

(collectively, the ‘ancillary proceedings’).

[5]Pursuant to clause 5.1 of the s 173 Agreement.

[6]VCAT reference P818/2016.

[7]VCAT reference P635/2016.

  1. In the first of the ancillary proceedings,[8] the Council conceded that it had not properly considered TPSC’s application and the proceeding was resolved by consent.  The two remaining ancillary proceedings[9] were dismissed by the Tribunal.  No appeal was pressed from these decisions.

    [8]VCAT reference P817/2016.

    [9]VCAT references P635/2016 and P818/2016.

  1. On 8 August 2016, the Tribunal made final orders in the ancillary proceedings and interim orders in the permit proceedings, accompanied by detailed reasons concerning the proper construction and legal effect of the s 173 Agreement.[10]  We shall refer to these reasons as ‘the Tribunal’s 2016 Reasons’.  Further reasons were published the following year upon the making of the order to grant the 2014 permit to Bonleaf – see below.

    [10]TPSC Pty Ltd v Kingston CC [2016] VCAT 1221 (8 August 2016) (‘Tribunal’s 2016 Reasons‘).

  1. In the Tribunal’s 2016 Reasons, the Tribunal said that it did not consider Bonleaf’s 2014 permit application to be contrary to the s 173 Agreement, but rather that it supported its purpose and intent.[11]  The Tribunal said:

With respect to the section 173 agreement, we consider that the circumstances require us to consider it in deciding that a permit should be granted. Our overall conclusion is that the proposal will support the purpose and intent of the agreement. We do not consider that the agreement has expired or that it would be futile to grant the permit because it is not binding on TPSC. Nor do we support releasing TPSC from its obligation under the agreement to share carparking on its land with the general public and visitors to the Bonleaf land.[12]

[11]Ibid [9], [161].

[12]Ibid [9].

  1. In its conclusion, the Tribunal stated:

We accept the agreement as being a valid agreement and one that gives rise to continuing obligations on and benefits to both Bonleaf and TPSC.  We consider that those obligations and benefits, especially relating to integrated vehicular and pedestrian access arrangements and shared car parking arrangements should form the basis of a consideration of the proposed layout and development.[13]

[13]Ibid [162].

  1. In this context, the Tribunal also said that it placed no weight on TPSC’s threats to construct a fence along the boundary between the Fabcot land and the Bonleaf land or refuse consent to works on the Fabcot land to facilitate development of the Bonleaf land.  It described such threats as ‘short-sighted’.[14]  The Tribunal stated that it had dealt with Bonleaf’s 2014 permit application on the basis that access as proposed over the Fabcot land would be available.  If such access was not available, then the permit could not be acted upon until the issue was resolved.[15]

    [14]Ibid [163].

    [15]Ibid [6].

  1. On 8 August 2016, the Tribunal ordered that Bonleaf file and serve amended plans addressing a number of issues, including refinement of the parking arrangements in the proposed basement car park.

  1. On 27 March 2017, the Tribunal heard further submissions in the permit proceedings in response to the amended plans.  TPSC submitted that the amended plans failed to adequately respond to the Tribunal’s order.  On 2 May 2017, the Tribunal handed down its decision to grant a permit in respect of Bonleaf’s 2014 permit application (‘the 2014 Bonleaf permit’).  It gave brief written reasons for its decision.[16]

    [16]TPSC Pty Ltd v Kingston CC (No.2) [2017] VCAT 605 (‘Tribunal’s 2017 Reasons’).

  1. TPSC appealed the Tribunal’s order granting the 2014 Bonleaf permit to the Trial Division pursuant to s 148 of the Victorian Civil and Administrative Tribunal Act 1998.  The relief sought by TPSC was that Order 3 made by the Tribunal on 2 May 2017 in the permit proceedings be set aside and the permit proceedings be remitted to the Tribunal to be determined according to law.[17] 

    [17]Order 3 is that in Bonleaf’s 2014 permit application, a permit is granted and directed to be issued in accordance with endorsed plans.

  1. TPSC now seeks leave to appeal the decision of the primary judge upholding, on questions of law, the decision of the Tribunal to grant the 2014 Bonleaf permit and dismissing its appeal.

The s 173 Agreement and its statutory context

  1. It is common ground that the s 173 Agreement is an agreement made under s 173 of the PE Act and that it regulates the use and development of the Activity Centre Land, most relevantly by requiring performance of certain obligations relating to the integrated development of the Activity Centre Land by Bonleaf and Fabcot, and their successors in title.

  1. The statutory framework for the s 173 Agreement is relevant to the construction of its terms. As the primary judge said:

In construing the s 173 agreement, the fact that the agreement was based in, and arose from, the power to enter into such agreements pursuant to ss 173 and 174 of the PE Act is an important consideration. The statutory framework for s 173 agreements forms part of the context in which the agreements are made and informs its construction as well as potentially dictating its operation. A s 173 agreement plays an important role as one of a number of instruments available for achieving the objectives of planning in Victoria. The planning objectives of the PE Act are sought to be achieved by a s 173 agreement, like planning permits under a scheme, and the scheme itself.[18]

[18]TPSC Pty Ltd v Kingston City Council [2018] VSC 313 [53] (‘Reasons’).

  1. Part 9 of the PE Act confers on responsible authorities a variety of powers to regulate land use in Victoria, including the power to enter into agreements under Division 2. Section 173(1) empowers a responsible authority to enter into an agreement with an owner of land in the area covered by a planning scheme for which it is the responsible authority. Pursuant to s 174(2), such an agreement may provide for the prohibition, restriction or regulation of the use or development of the land, the conditions subject to which the land may be used or developed for specified purposes and any matter intended to achieve or advance the objectives of planning in Victoria or the relevant planning scheme. Section 180 provides that an agreement must not require or allow anything to be done which would breach a planning scheme or a permit.

  1. Section 181 provides for a s 173 agreement to be recorded in the Register of Titles on application by the responsible authority. Pursuant to s 182, the effect of registration is to make the burden of any covenant in the s 173 agreement run with the land and enable the responsible authority to enforce the covenant against any person deriving title from any person who entered into the covenant as if it were a restrictive covenant.[19] By this means, s 173 agreements registered on title affect the use and development of land, irrespective of whether the owner is or was a party to the agreement.

    [19]Despite the fact that it may not be positive in nature or that it is not for the benefit of any land of the responsible authority.

  1. Section 114 of the Act provides for the Tribunal to make enforcement orders ‘if a use or development of land contravenes or has contravened, or, unless prevented by the enforcement order, will contravene’ an agreement under s 173. Pursuant to s 119, an enforcement order may direct the person against whom it is made to stop the use or development, not to start the use or development and/or to do specified things to restore the land or otherwise ensure compliance with the s 173 agreement. Section 126 makes it an offence to contravene or fail to comply with an agreement under s 173.

  1. Agreements made under s 173 of the PE Act are therefore hybrid instruments, operating as planning controls over land as well as being private agreements.[20]  When recorded on title, they bind the owners of land from time to time to the covenants in the agreement, which may be enforced by persons other than the parties to the agreement. [21]

    [20]Secretary to the Department of Economic Development, Jobs, Transport and Resources v MG Pastoral Company Pty Ltd [2016] VSC 187 [21].

    [21]Solid Investments Australia Pty Ltd v Greater Geelong City Council [2004] VCAT 2356 [43] (‘Solid Investments’).

  1. As discussed, the s 173 Agreement formed part of the proposal for the integrated development of the Activity Centre Land negotiated between Fabcot, Bonleaf and the Council. The recitals record that the Council prepared Amendment C81 at the request of Fabcot and Bonleaf and that, concurrently with Amendment C81, Fabcot and Bonleaf each lodged an application for a planning permit pursuant to s 96A of the PE Act. The s 173 Agreement further records that Fabcot’s application was for the redevelopment of the Fabcot land with buildings comprising a supermarket and shops and that Bonleaf’s application was for the redevelopment of the Bonleaf land with two buildings comprising shops, offices, a medical centre, 40 dwellings and an indoor recreation centre. It records that the Council resolved to adopt Amendment C81 subject to the execution of the s 173 Agreement.

  1. The s 173 Agreement defines ‘Development’ as the construction of a building and the carrying out of works pursuant to any planning permit issued by the Council in respect of either the Bonleaf land or the Fabcot land, including but not limited to the construction of buildings and works depicted in the plans endorsed under planning permit numbers KP 375/08 or KP 374/08 (being the 2008 Fabcot permit and the 2008 Bonleaf permit respectively).

  1. Clause 4 governs vehicle and pedestrian access arrangements to the Bonleaf land.  It imposes obligations on Fabcot only and provides:

4.1Council and Fabcot agree that Fabcot must provide any occupants of or visitors to the Bonleaf Land with free and unimpeded vehicular and pedestrian access: 

4.1.1through the Fabcot Land to the Nepean Highway and to Lower Dandenong Road; and

4.1.2    through the Fabcot Land to the Bonleaf Land

in accordance with the access arrangements depicted on any plans approved pursuant to planning permit number KP374/08 [the 2008 Bonleaf permit] and otherwise to the satisfaction of VicRoads and Council.

  1. Clause 5 provides for the reciprocal use of car parks on the Fabcot land and the Bonleaf land in the following terms:

5.1The parties agree that upon completion of Development of the Fabcot Land under planning permit number KP375/08 [the 2008 Fabcot permit] Fabcot must make all car parking spaces available at all times to the general public including any visitors to the Bonleaf Land unless Fabcot obtains the prior written consent of Council, which consent may be withheld in Council’s absolute discretion.

5.2The parties agree that upon the completion of Development of the Bonleaf Land under planning permit number KP374/08 [the 2008 Bonleaf permit] Bonleaf must make all car parking spaces other than Resident Parking Spaces and Tenant Parking Spaces available at all times to the general public including any visitors to the Fabcot Land unless Bonleaf obtains the prior written consent of Council, which consent may be withheld in Council’s absolute discretion.

  1. Clause 9 regulates the future use and development of the Activity Centre Land.  It provides:

9.1Other than for the current use for which existing use right [sic] apply, subject to this clause 9.2 and 9.3 of this s 173 Agreement regardless of any rights conferred by the Planning Scheme or the Act, the use and development of the Activity Centre Land must be generally in accordance with the use and development depicted in the plans endorsed under planning permit numbers KP375/08 and KP374/08 [being the 2008 Fabcot permit and the 2008 Bonleaf permit respectively] … whether or not the Planning Permits have expired, for a period of 7 years.

9.2Council may consent to a change to the development as required to be maintained under clause 9.1 of this s 173 Agreement where Council is satisfied that:

9.2.1any changes to the buildings are of a high urban design standard;

9.2.2the changes do not materially increase the total leasable floor area in the opinion of Council; and

9.2.3the development will not increase the car parking requirements.

9.3Notwithstanding clause 9.1 and 9.2 of this s 173 Agreement but subject to clause 10.1 any part of the Activity Centre Land and the buildings constructed on the Activity Centre Land may be used for an alternative use specified in section 1 of the Business 1 zone provided any other requirements of the Planning Scheme and this s 173 Agreement are met.

  1. Clause 10 imposes restrictions on the use and development of the Bonleaf land only.  It provides that the combined leasable floor area for all shops on the Bonleaf land must not exceed 3000 square metres unless the Council agrees and the leasable floor area of any shop on the Bonleaf land must not exceed 1400 square metres unless the Council agrees.

  1. In relation to the termination of the s 173 Agreement, clause 21 provides:

    21.1 This s 173 Agreement ends upon the earlier of:

    21.1.1in relation to the Bonleaf land, the owner of the Bonleaf Land for the time being and Council agreeing to end this s 173 Agreement or any part of it;

    21.1.2in relation to the Fabcot Land, the owner of the Fabcot land for the time being and Council agreeing to end this s 173 Agreement or any part of it;

    provided that alternative arrangements are first put into place to the satisfaction of Council in respect of the obligations in clauses 4.1, 5.1, 5.2, 14 and 15.3.1 of this s 173 Agreement and provided that the obligations of the relevant Developer as set out in clauses 12 and 14.4 have been satisfied.

    21.1.3the date the Amendment lapses; and

    21.1.4when the parties mutually agree that this s 173 Agreement is at an end.

  2. Clauses 4.1, 5.1, 5.2, 14 and 15.3.1 referred to in clause 21.1 govern vehicle and pedestrian access arrangements, car parking arrangements, developer contributions for traffic and other public works, and the payment of the Council’s costs of the s 173 Agreement.

Tribunal’s decision

  1. The Tribunal determined, in substance, that the form of development proposed in Bonleaf’s 2014 permit application was generally consistent with the requirements of the s 173 Agreement. It carried out a merits review of Bonleaf’s 2014 permit application and, following the second hearing on the amended plans, determined that a permit should be granted.

  1. In construing the s 173 Agreement, the Tribunal described the intent of clause 9.1 (relating to the future use and development of the Activity Centre Land) to be that for a period of seven years, the Fabcot land and the Bonleaf land could only be used and developed in accordance with the 2008 permits.[22]  However, upon the expiry of the seven year period, that is, after 26 October 2016, both the Fabcot land and the Bonleaf land could be used and developed for ‘other purposes or in other ways provided any other requirements of the planning scheme and the agreement [were] met.’[23] This interpretation, so the Tribunal held, was supported by the definition of ‘Development’ in the s 173 Agreement.[24]

    [22]Tribunal’s 2016 Reasons [133].

    [23]Ibid [134].

    [24]Ibid [135].

  1. The Tribunal therefore held that that it was open to Bonleaf to use or develop the Bonleaf land ‘for something quite different’ from what was allowed by the 2008 Bonleaf permit, provided the other requirements ‘of an ongoing nature’ in the s 173 Agreement were met, including:

(d)              the restriction on the leasable floor area for the retail premises;

(e)               the provision of integrated vehicular and pedestrian access arrangements generally in accordance with the access arrangements associated with the 2008 permits;

(f)                the provision of shared car parking on the Bonleaf land and the Fabcot land;  and

(g)               restrictions on the loading or unloading of trucks on the Bonleaf land.[25]

[25]Ibid [137].

  1. Having regard to its consideration of the amended plans, the Tribunal found that the development proposed in Bonleaf’s 2014 permit application would continue to meet these requirements.[26]

    [26]Ibid [138].

  1. TPSC argued that it was disadvantaged by the proposed car parking arrangements for the Bonleaf development.  However, the Tribunal found that TPSC had provided no evidence to substantiate its view that car parking spaces provided at ground level were more attractive than car parking spaces provided at basement level and that the TPSC car parks would be used in preference to the Bonleaf car parks even when customers were visiting the facilities on the Bonleaf land.[27]

    [27]Ibid [145].

  1. In reaching this conclusion, the Tribunal compared and made a number of findings of fact about the access and car parking arrangements in the 2008 plans (that is, the plans endorsed under the Fabcot 2008 permit and accompanying the 2008 Bonleaf permit application) and the plans accompanying Bonleaf’s 2014 permit application.  It found no difference in the vehicular and pedestrian access arrangements in relation to the location of access points or access ways over the Fabcot land.[28]  Bonleaf’s 2008 plans showed car parking on the Bonleaf land on two levels – at basement level and at ground level – whereas its 2014 plans showed parking in three basement level car parks.  However, car parking in basement level 1 would be accessed via a ramp from a point in a very similar location to the proposed ramp down to the ground floor car park shown on Bonleaf’s 2008 plans.[29]  Furthermore, the 2008 plans showed that Bonleaf’s ground floor car park would be lower than the ‘at grade’ car park on the Fabcot land in any event.  Therefore, while part of the Bonleaf car park was shown at ground level on the 2008 Bonleaf plans, it would be at least at semi-basement level by comparison to the Fabcot land and would not be visible as a car park from the Fabcot land.[30]

    [28]Ibid [142].

    [29]Ibid [143].

    [30]Ibid [150].

  1. The Tribunal concluded:[31]

Based on this analysis of the plans, we do not consider that TPSC can legitimately claim that in some way, the proposed provision of car parking on the Bonleaf land will disadvantage TPSC or visitors to the [Fabcot] land.  In contrast, we consider that the proposed car parking on the Bonleaf land will be just as accessible and attractive as the car parking that was proposed in the 2008 Bonleaf plans.

[31]Ibid [151].

  1. The Tribunal considered that the references in clauses 4 and 5 of the s 173 Agreement to the plans approved pursuant to the 2008 Bonleaf permit and to the completion of development of the Bonleaf land under the 2008 Bonleaf permit respectively did not absolve TPSC of its obligation to provide access to the Bonleaf land and were not an impediment to the grant of the permit.[32]  It observed that clause 5.2 enabled Bonleaf to obtain the prior written consent of the Council to alternative parking arrangements for visitors to the Fabcot land and held that the grant of the 2014 Bonleaf permit would constitute such consent.[33]

    [32]Ibid [152].

    [33]Ibid [156].

Appeal to the Trial Division

  1. TPSC submitted that the Tribunal erred in holding that under the s 173 Agreement it was open to Bonleaf to use or develop the Bonleaf Land for something ‘quite different’ from what was contemplated in the 2008 Bonleaf permit; that the 2014 Bonleaf permit was not contrary to the s 173 Agreement; that the 2014 Bonleaf permit supported the purpose and intent of the s 173 Agreement; and, specifically, in failing to direct that the 2014 Bonleaf permit not be granted unless the development of the Bonleaf Land was in accordance with the 2008 Bonleaf permit and/or included car parking spaces generally in accordance with the car parking spaces depicted in the plans for the 2008 Bonleaf permit.

  1. In substance, TPSC contended that the s 173 Agreement did not permit development of the Bonleaf land in the form proposed in Bonleaf’s 2014 permit application and, indeed, that if the Bonleaf land were to be developed, the development had to accord with the 2008 Bonleaf permit. More specifically, TPSC contended that the obligation imposed on TPSC by clause 5.1 of the s 173 Agreement to make car parking available did not come into existence until the 2008 Bonleaf permit was acted upon. Alternatively, any permit granted to Bonleaf had to require the provision of car parking spaces generally in accordance with the car parking spaces depicted in the plans endorsed under the 2008 Bonleaf permit, in particular, 105 ‘at grade’ parking spaces for visitors.

  1. In her reasons for judgment, the primary judge identified the questions of law raised in the appeal to be the proper construction of the s 173 Agreement and, consequently, whether the Tribunal had power to grant a permit for the use and development of the Bonleaf land in the form proposed in Bonleaf’s 2014 permit application.[34] The judge granted TPSC leave to appeal but did not accept that the Tribunal had erred in its construction of the s 173 Agreement or in its application of the s 173 Agreement to the proposal before the Tribunal. The appeal from the order of the Tribunal granting the permit was therefore dismissed.[35]

    [34]Reasons [8].

    [35]Ibid [9].

  1. The primary judge held that the s 173 Agreement does not constrain the use and development of the Fabcot land and the Bonleaf land ‘entirely’ to the proposed form of use and development represented in the 2008 permits.[36]  This, so the judge held, was clear from the following clauses:

    [36]Ibid [61].

(a)clause 4.1 provides that the access arrangements depicted on any plans approved pursuant to planning permit number KP374/08 and otherwise to the satisfaction of VicRoads and Council;

(b)clause 5.1 and 5.2 provide for the car parking spaces being available at all times unless ’prior written consent of Council’ is obtained;

(c)clause 9.1 which, subject to clauses 9.2 and 9.3, requires the development to be generally in accordance with the use and development depicted in the plans endorsed under permit numbers KP 375/08 and KP 374/08 for a period of seven years;

(d)clause 9.2 which provides that on certain conditions ‘Council may consent to a change to the development as required to be maintained under clause 9.1’;

(e)clause 9.3 provides that, notwithstanding clauses 9.1 and 9.2 but subject to clause 10, ‘any part of the Activity Centre Land’ .... ‘may be used for an alternative use specified in section 1 of the Business 1 zone provided any other requirements of the Planning Scheme and this s 173 Agreement are met’; and

(f)‘Development’ is defined to include not only the development represented by the [Fabcot] Permit plans and 2008 Bonleaf Permit plans but construction and works carried out pursuant to any planning permit issued by the Council in respect of the Bonleaf Land or [Fabcot] Land.[37]

[37]Ibid (emphasis in original).

  1. The judge held that the ‘overall intent and purpose’ of the s 173 Agreement was that the Bonleaf land and the Fabcot land be redeveloped in an integrated way.[38]  She rejected the submission that the use and development of the Bonleaf land after 26 October 2016 (that is, after the expiry of the seven year period referred to in clause 9.1) could only be in the form contemplated by the 2008 Bonleaf permit.[39] 

    [38]Ibid [62].

    [39]Ibid.

  1. The judge accepted the Tribunal’s factual assessment of the plans which accompanied the 2008 Bonleaf permit and Bonleaf’s 2014 permit application and the Tribunal’s conclusion that the 2014 plans were generally in accordance with the 2008 plans in relation to integrated pedestrian and vehicle access (clause 4) and shared car parking (clause 5).[40] 

    [40]Ibid [63].

  1. In relation to clause 5 and the provision of shared car parking, the judge held that clause 5.2 addresses what is to occur upon the completion of development on the Bonleaf land, not how the completion is to occur. The development referred to in clause 5 is the defined term ‘Development’, which may be consistent with the plans which accompanied the 2008 Bonleaf permit or with some other plans for development, having regard to the broad definition of ‘Development’ in the s 173 Agreement. [41] Furthermore, the judge held, clause 5.2 does not address the design or location of car parking spaces explicitly, but is directed to the sharing of car parking spaces. There is no requirement in the s 173 Agreement for car parking on the Bonleaf Land to be provided at ground level.[42]  Clause 5 does not require the car parking to be provided ‘as depicted on the endorsed plans that were to be generally in accordance with the plan submitted with the 2008 Bonleaf permit application’.[43]

    [41]Ibid [68].

    [42]Ibid [70].

    [43]Ibid [71].

  1. The judge did not accept that, on its proper construction, the s 173 Agreement precluded any form of development on the Bonleaf land other than the form of development permitted by the 2008 Bonleaf permit. Clause 9.1 made it clear that the obligation to use and develop the land in accordance with plans endorsed on the 2008 Bonleaf permit was for a period of seven years. After that a different form of development could ensue.[44] The judge concluded that there was no error in the Tribunal’s interpretation of clause 9.1, being that after 26 October 2016, both the Bonleaf land and the Fabcot land could be used or developed for other purposes or in other ways, provided that the requirements of the Kingston Planning Scheme and certain other requirements of the s 173 Agreement were met.

    [44]Ibid [86].

  1. The judge said:

I agree with the Tribunal where it stated that even though there were no plans endorsed or approved under the 2008 Bonleaf Permit, the s 173 Agreement contemplated that development could occur under a different permit.[45]

[45]Ibid [84] (citations omitted).

  1. She also said:

It was open to the Tribunal to conclude, on the proper construction of the s 173 Agreement, that the use or development of the Bonleaf Land could be ‘for something quite different’ to that contemplated in the 2008 Bonleaf Permit as long as the obligations of an ongoing nature specifically set out in the s 173 Agreement were met.[46]

[46]Ibid [89].

  1. Finally, in relation to the Tribunal’s holding that the consent referred to in clause 5.2 was given by the NOD, the judge accepted that the NOD constituted consent for that purpose. She did so, inter alia, on the basis that the Council was aware of the terms of the s 173 Agreement; TPSC participated in the permit application process as an objector; and the Council considered the adequacy of the car parking provision.[47]

    [47]Ibid [76]–[77].

Grounds of appeal

  1. There are two proposed grounds of appeal:

1.The … judge erred in law at [84] & [89] in finding that it was open to the Tribunal to conclude, on the proper construction of the s 173 Agreement, that the Agreement conferred upon Bonleaf a right to develop its land (Bonleaf Land) under a ‘different permit’ from that specifically referred to in the Agreement (the 2008 Bonleaf Permit) ‘for something quite different’ to that contemplated in the 2008 Bonleaf Permit (the 2014 Bonleaf Permit) as long as the obligations of an ongoing nature specifically set out in the s 173 Agreement were met, because this construction of the s 173 Agreement:

(a)is not supported by the text of the s 173 Agreement, including the text of clause 9.1 of the s 173 Agreement;

(b)is not supported by the context and purpose of the s 173 Agreement, including clauses 4 and 5 and the recitals to the s 173 Agreement;

(c)is not supported by the statutory context established by the [PE Act]; and

(d)is based on irrelevant considerations, namely the consistency of what was proposed with the 2008 Bonleaf permit.

2.The … judge erred in law at [76] & [77] in upholding the Tribunal’s finding that the grant of the 2014 Bonleaf Permit constituted a written consent by Council to alter Bonleaf’s carparking obligations under clause 5.2 of the s 173 Agreement because the preconditions required for the exercise of such a discretion by Council were not satisfied, namely the completion of a development of the Bonleaf Land under the 2008 Bonleaf Permit.

TPSC’s submissions

  1. In its written submissions, TPSC submitted that the primary judge correctly identified the principles for the construction of the s 173 Agreement but failed to apply them. None of the text, context or purpose of the s 173 Agreement supports the construction adopted by the judge. The judge did not ask what a reasonable business person would have understood the s 173 Agreement to mean and the construction that she adopted did not yield to ‘commercial common sense’.

  1. According to TPSC, the judge erred in relying upon clause 9.1 to hold that the s 173 Agreement conferred upon Bonleaf a right after seven years to pursue a ‘quite different’ development under a ‘different permit’. She failed to explain why the time limitation in clause 9.1 (seven years) carried with it the corollary that the s 173 Agreement permitted ‘any form of development’ upon expiry of that period. Clause 9.1 does not state what rights are conferred upon the parties in respect of the development of their land after seven years, especially in circumstances where one of them (TPSC) has within that period developed its land in accordance with its 2008 permit. Other clauses in the s 173 Agreement, which both the Tribunal and the judge found remained unaltered and operative beyond the seven year period, mean, so TPSC contends, that only development in accordance with the 2008 permits can be pursued conformably with the s 173 Agreement, even after the expiry of the seven year period.

  1. TPSC challenges as an impermissible inference the primary judge’s conclusion that the inclusion of an express time period of seven years in clause 9.1 means that after seven years, Bonleaf could undertake a ‘quite different’ development under a ‘different permit’.  According to TPSC, the judge drew the inference without adverting to the test conditioning the inference of terms in a contract and such a contractual term (that after seven years, Bonleaf could undertake a ‘quite different’ development under a ‘different permit’) can neither be inferred nor implied.[48] The absence of such a term from a statutory agreement that was carefully negotiated between a number of parties to facilitate a complex integrated development suggests that the term was not intended to be included in the s 173 Agreement.

    [48]Reliance was placed on Hawkins v Clayton (1988) 164 CLR 539, 570, as to inferred terms, and to the test for the implication of terms in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266, 283.

  1. TPSC submits that the words ‘for a period of 7 years’ in clause 9.1 do not do the work identified by the primary judge. Clause 9 seeks to deal with rights and restrictions in relation to the Activity Centre Land as a whole, not just the Bonleaf land. The reference to the period of seven years in clause 9.1 reflects the five year term of the 2008 permits with the additional two year extension provided for in s 68(3) of the PE Act. Because the 2008 Bonleaf permit was for the use and development of the land and not just for its development, there was a difference in the dates for the expiry of the 2008 Fabcot permit and the 2008 Bonleaf permit, which clause 9.1 sought to address. The parties intended that their obligations to develop the land in accordance with the 2008 permits would exist in tandem. Furthermore, TPSC contends, if the words in clause 9.1 are accepted to mean that the only development able to be pursued during the seven year period is a development under the original permits (the 2008 permits), then those words can bear no greater meaning after the seven year period.

  1. TPSC submits that the defined term ‘Development’ does not assist the judge’s construction as it does not appear in clause 9.1.  Clause 9.1 speaks specifically of development depicted in the plans endorsed under the 2008 permits. 

  1. TPSC submits that clauses 4 and 5 of the s 173 Agreement, which continue to operate unaltered beyond the seven year period, provide a contextual basis for rejecting the construction adopted by the primary judge. Both of these clauses create rights and obligations that are referable to, and conditional upon, the Bonleaf land being developed pursuant to the 2008 Bonleaf permit. Thus, under clause 4, if no plans have been approved pursuant to the 2008 Bonleaf permit, TPSC has no obligation to give occupants and visitors to the Bonleaf land access to its land. Likewise, clause 5 imposes an obligation upon TPSC to make available car parking spaces that arises only ‘upon the completion of Development of the Bonleaf land under [the 2008 Bonleaf permit]’. TPSC submits that the mutual obligations imposed upon each of the parties in relation to shared car parking are expressly conditioned upon the completion of development under the 2008 planning permits, and TPSC’s obligation to provide shared parking is not triggered if Bonleaf does not complete development of the Bonleaf land pursuant to the 2008 Bonleaf permit.

  1. TPSC also relies on the context provided by the recitals, which are expressed to form part of the s 173 Agreement. Recital L.3 records that the parties agreed to enter into the s 173 Agreement to give effect to the requirements of the 2008 permits. According to TPSC, the s 173 Agreement was therefore entered into ‘for a singular purpose’, namely, to give effect to the 2008 permits. It explicitly and implicitly contemplated development only under those permits. According to TPSC, the proposition that after seven years Bonleaf has the right to develop its land under a different permit in a manner quite different from the development allowed by the 2008 permit cannot be reconciled with this intention. The construction adopted by the primary judge is inconsistent with the parties’ expressed intention because it gives effect to the 2014 Bonleaf permit, with the consequence that no effect can be given to the 2008 Bonleaf permit. According to TPSC, there was no warrant for the primary judge to ignore the express intention of the parties and to give effect instead to a vague notion of an ‘overall intent and purpose’ which has no foundation in the text, context or purpose of the s 173 Agreement.

  1. To like effect, it was submitted that it was not open to the primary judge to say that the s 173 Agreement permitted a development under a permit if the development was ‘substantially similar’. These sorts of vague and subjective notions were not a basis upon which contracting parties would ever reach agreement. It was impermissible, under planning law, to disregard what the parties had actually agreed as expressed in plain words and instead to apply vague planning principles and policies.

  1. TPSC submits that the construction adopted by the primary judge fundamentally flouts business common sense because it involves TPSC agreeing to be bound by obligations in respect of development next door whenever the development is to take place and whatever that development is to be.  No commercial party could possibly be taken to have agreed to such a proposition.

  1. TPSC submits that the statutory framework within which the s 173 Agreement must be construed militates against a construction which confers expansive, unexpressed rights upon parties. Under the PE Act, breaches of s 173 agreements attract serious consequences, including criminal sanctions. A s 173 agreement, once registered on title, may operate as a restrictive covenant affecting the land that forms the subject matter of the agreement. It is therefore essential that a construction is adopted which is faithful to the text and not based upon inference derived from a vague notion of an ‘overall intent and purpose’. The need for certainty supports a construction which, consistently with the express terms of the s 173 Agreement, requires the development of the Bonleaf land to occur only in accordance with the 2008 Bonleaf permit, unless the s 173 Agreement is amended or terminated. According to TPSC, given the expiry of the 2008 Bonleaf permit, for the Bonleaf land to be developed, the s 173 Agreement has to be replaced.

  1. In relation to ground 2, TPSC contends that the reference in clause 5.2 to the consent of Council does not displace the precondition which enlivens its exercise, namely, completion of the development under the relevant 2008 planning permit. 

Bonleaf’s submissions

  1. Bonleaf’s primary submission is that leave to appeal should be refused because the arguments which TPSC seeks leave to ventilate have no utility. Even if TPSC were to succeed on both grounds of appeal as to the proper construction of the s 173 Agreement, the 2014 Bonleaf permit would meet the requirements of the s 173 Agreement as construed by TPSC. In the Tribunal, TPSC contended that the proposal in Bonleaf’s 2014 permit application differed from the development in the 2008 Bonleaf permit in respect of access arrangements under clause 4 and shared parking arrangements under clause 5. However, these matters were the subject of findings by the Tribunal, which the primary judge said she accepted, that Bonleaf’s 2014 permit application was generally in accordance with the 2008 Bonleaf permit in respect of pedestrian and vehicle access (clause 4) and shared car parking (clause 5).[49] Thus, so Bonleaf contends, even if TPSC’s construction of the s 173 Agreement is correct, the 2014 Bonleaf permit is consistent with the 2008 Bonleaf permit and the Tribunal made no error in deciding that the 2014 Bonleaf permit should be granted.

    [49]Reasons [63].

  1. In respect of clause 9.1, Bonleaf points out that although TPSC challenges the finding that, after seven years, the parties were permitted to develop ‘something quite different’ to that proposed in the 2018 permits, TPSC does not challenge the findings to the effect that Bonleaf’s 2014 permit application did not in fact propose ‘something quite different’ to the 2008 Bonleaf permit. Thus, even if TPSC were to succeed in its argument that the s 173 Agreement required development substantially in accordance with the 2008 permits, it would not affect the primary judge’s conclusion that the 2014 Bonleaf permit was consistent with the s 173 Agreement.

  1. Bonleaf further submits that there is nothing uncommercial in an agreement that restrains the manner of development for seven years and thereafter does not restrain development in that way. As the primary judge made clear, any development that thereafter ensued still required compliance with the ongoing obligations that continue to bind the parties under the s 173 Agreement, including in respect of the matters about which TPSC complained, namely access arrangements and shared car parking. Bonleaf also points to the benefits that TPSC has obtained from the s 173 Agreement: permission for its development; settled arrangements in relation to the construction, use and maintenance of the car parking and access roads; a contribution to the construction and funding of new access arrangements from the Nepean Highway; and a contribution towards local roadworks to be carried out by the Council. TPSC also obtained a right in the future, on development of the Bonleaf land, to shared car parking arrangements.

  1. As to context, Bonleaf submits that clause 5.2 addresses what is to occur upon completion of ‘Development’, which includes any development under any permit.  The use of the defined term ‘Development’ in clause 5.2 is telling, having regard to the fact that clause 5.2 was entered into at a point in time when endorsed plans had yet to be prepared.  The use of the defined term ‘Development’ and the reference to the 2008 Bonleaf permit can be read together consistently in circumstances where a planning permit is in place but plans have yet to be endorsed.  A commercial interpretation of clause 5 would have it operate as a continuing obligation in circumstances where the Land could be developed other than pursuant to the 2008 permit, as contemplated by clause 9.1.  Furthermore, so Bonleaf says, recital L.3 reflects what was being contemplated at the time, namely, that the parties would develop the Activity Centre Land substantially in accordance with the 2008 permits.  However, it was not mandatory for them to do so and the obligations agreed to were not conditional upon the parties doing so. 

  1. As to ground 2 and whether the NOD constituted the Council’s consent for the purposes of clause 5.2, Bonleaf submits that there was no error in the judge’s approach and that TPSC has not identified any error in the findings made at [76] and [77] of the primary judge’s reasons. 

Does the appeal have utility?

  1. The Tribunal found that the proposed car parking arrangements for the development on the Bonleaf land were substantially the same under the 2014 plans as the 2008 plans.  It found, as Bonleaf submitted, that Bonleaf’s 2014 permit application was generally in accordance with the 2008 Bonleaf permit in respect of both pedestrian and vehicle access (clause 4) and shared car parking (clause 5). 

  1. However, we do not accept that the Tribunal’s factual findings regarding the access and car parking arrangements render the appeal futile. The Tribunal’s factual findings do not, as Bonleaf contends, mean that no different result could ensue on the permit application if TPSC’s construction of the s 173 Agreement were adopted. TPSC’s construction of the s 173 Agreement is that it would be inconsistent with or contrary to the s 173 Agreement to permit the development of the Bonleaf land otherwise than pursuant to the 2008 Bonleaf permit. If that was the proper construction of the s 173 Agreement, the Tribunal’s decision might have been different.

  1. In order for the appeal to have utility, it must be capable of resulting in the setting aside of the Tribunal’s order granting the permit. In considering whether a permit should be granted, the Tribunal was engaged in a review of the decision by the Council to issue the NOD. The review was in the form of a ‘merits review’, requiring the Tribunal to consider the merits of Bonleaf’s 2014 permit application by reference to the applicable planning policies, notably the controls in the Kingston Planning Scheme. Pursuant to s 85 of the PE Act, the Tribunal had power to direct that a permit must not be granted; to grant the permit and direct the responsible authority to issue it; or grant the permit, direct that the permit must or must not contain specified conditions and direct the responsible authority to issue the permit.

  1. Section 84B of the PE Act specifies the matters that the Tribunal may or must take into account on review. In respect of an existing s 173 agreement affecting the land:

(a) Section 84B(1)(a) requires the Tribunal to take into account any matter which the responsible authority properly took into account or was required to take into account in making its decision. Section 60(1A)(i) provides that the responsible authority may consider any agreement made pursuant to s 173 affecting the land the subject of the application.

(b) Section 84B(2)(h) provides that the Tribunal must (where appropriate) have regard to any agreement made pursuant to s 173 affecting the land the subject of the application.

  1. The Tribunal took into account the s 173 Agreement when considering whether a permit should be granted. It was common ground that the s 173 Agreement was an agreement made under s 173 of the PE Act and that it regulated the use and development of the Activity Centre Land, including by requiring development to accord with the 2008 permits.

  1. TPSC does not contend that the s 173 Agreement is an absolute bar to the grant of any other permit to develop the Land. TPSC’s complaint centres on paragraphs 84 and 89 of the Reasons and the primary judge’s holding that the s 173 Agreement confers a right to develop the Activity Centre Land under a ‘different permit’ and for ‘something quite different’ from the 2008 permits. TPSC submitted that the Tribunal’s error lay not in the grant of the permit contrary to the terms of the s 173 Agreement but in holding that the s 173 Agreement ‘supported’ the grant of Bonleaf’s 2014 permit. This, so it was submitted, was an irrelevant consideration because it was based on a misconstruction of the s 173 Agreement. It ought not to have been taken into account in the Tribunal’s decision-making.

  1. The question of law in respect of which leave to appeal was granted by the primary judge concerned the proper construction of the s 173 Agreement ‘and consequently the power to grant a permit for the Bonleaf Land in the form sought by Bonleaf.’[50] Although focussed on the construction of the s 173 Agreement, the judge was concerned to determine whether the Tribunal had erred in law in granting the permit and, if so, whether that error was a vitiating error. She found no error, and that the Tribunal had not misconstrued the s 173 Agreement.

    [50]Ibid [8].

Ground 1

  1. In this Court, TPSC’s principal challenge to the decision of the primary judge was to the holding that clause 9.1 gave Bonleaf the right to develop its land under a permit that was quite different from the 2008 Bonleaf permit. This, so it was argued, was a critical finding that then led to the conclusion that the s 173 Agreement supported the application for the 2014 Bonleaf permit.

  1. According to TPSC, both the Tribunal and the primary judge held that clause 9.1 conferred rights on Bonleaf that didn’t otherwise exist. The Tribunal and the primary judge did not hold that the 2014 Bonleaf permit should be granted because the s 173 Agreement did not preclude such development; rather, they held ‘positively’ that clause 9.1 conferred rights to undertake such a development. TPSC submits that this was a consideration that should not have been taken into account by the Tribunal as it was wrong. As a result, the first ground of appeal was formulated as the taking into account of an irrelevant consideration, namely, that clause 9.1. conferred rights to undertake a development that was different from the development in the 2008 plans.

  1. In our view, this misreads what the Tribunal actually said. The Tribunal said (at [8]) that ‘the proposal will support the purpose and intent of the agreement’ and (at [161]) that it did not consider that the proposed permit application was contrary to the s 173 Agreement; rather, that it supported ‘the purpose and intent of the agreement’.[51] The Tribunal therefore held that the proposal ‘supported’ the s 173 Agreement rather than vice versa. We understand this to mean that Bonleaf’s 2014 permit application supported the integrated development of the Activity Centre Land substantially in the form contemplated by the s 173 Agreement.

    [51]Tribunal’s 2016 Reasons [8], [161].

  1. TPSC’s argument that both the Tribunal and the primary judge interpreted clause 9.1 to be a source of rights to develop the Activity Centre Land is misconceived.  Neither the Tribunal nor the primary judge identified clause 9.1 as the source of rights to develop the Activity Centre Land.  The Tribunal said as follows:

We consider that the intent of clause 9 (Development of the Activity Centre Land) was that for a period of seven years both the TPSC land and the Bonleaf land could only be used or developed generally in accordance with [the 2008] plans, whether  or not the planning permit expired.  In other words, we do not consider that the Bonleaf land could have been used or developed in accordance with the current permit application by Bonleaf prior to 26 October 2016.[52]

[52]Ibid [133] (emphasis added).

  1. The starting point for the Tribunal, therefore, was that for a period of seven years, clause 9.1 operated to restrict development on the Activity Centre Land to the form of development in the 2008 permits.  On 26 October 2016, that particular restriction ceased to operate.

  1. The primary judge also regarded clause 9.1 as imposing a restriction on the use and development of the Activity Centre Land, holding that the restriction applied only for a period of seven years from the date of the s 173 Agreement. She said:

Clause 9.1 makes it clear that the obligation to use and develop the land in accordance with plans endorsed on the 2008 Bonleaf Permit is for a period of seven years.[53]

[53]Reasons [86].

  1. The primary judge held that the restriction on the use and development on the Activity Centre Land in the s 173 Agreement operated for seven years. Thereafter, that restriction did not apply and the Activity Centre Land could be developed subject to all of the remaining controls that applied to the Land under the PE Act, the Planning Scheme, the operative clauses of the s 173 Agreement and any other relevant law or instrument.

  1. This is what the primary judge meant when she said that a ‘different form of development may ensue’.[54] That possibility arises from the general right of a land owner to develop land subject to applicable planning and other laws and instruments. The possibility that a different development may ensue arises from an absence of restriction rather than from the conferral of a right. As clause 9 sets out conditions and restrictions on the parties’ rights to use and develop the Activity Centre Land, it would be wrong to characterise clause 9 as a repository of Bonleaf’s rights to develop the Bonleaf land, but neither the Tribunal nor the primary judge did so. TPSC’s contention that the Tribunal, and the judge, inserted a term into the s 173 Agreement by inference or implication is misconceived.

    [54]Ibid.

  1. TPSC’s submission that, in order to comply with the terms of the s 173 Agreement, the Activity Centre Land could only be developed in accordance with the 2008 permits was rejected by the Tribunal and the primary judge, and in our view correctly so. The s 173 Agreement does not stand as an impediment to the grant of the 2014 Bonleaf permit, as it expressly contemplates the development of the Activity Centre Land in accordance with planning permits other than the 2008 permits during the life of the s 173 Agreement.

  1. Clause 9.1 specifically addresses the future development of the Activity Centre Land.  It requires the use and development of the Activity Centre Land to be ‘generally in accordance with’ the use and development depicted in the plans endorsed under the 2008 permits ‘for a period of 7 years’.  

  1. Effect must be given to the words ‘for a period of 7 years’. Although clause 9.1 is untidy, it provides that ‘for a period of 7 years’ the use and development of the Activity Centre Land must be generally in accordance with the use and development depicted in the plans endorsed under the 2008 permits. As a corollary, after seven years, development of the Activity Centre Land is no longer required to be generally in accordance with the use and development depicted in the plans endorsed under the 2008 permits, except to the extent that other clauses in the s 173 Agreement require specific things to be done in accordance with them.

  1. A construction of clause 9.1 that does not permit development other than in accordance with the 2008 permits for the life of the s 173 Agreement would give the words ‘for a period of 7 years’ no work to do. We reject the explanation for the presence of those words in clause 9.1 that was proffered by TPSC. TPSC submitted that they were included in order to align the 2008 Fabcot permit and the 2008 Bonleaf permit, based on an alleged difference between them, being that one was for the development of the land only, while the other was for the use and development of the land. However, in terms, the 2008 permits were both for the use of the Land for the purposes described and there was no difference between them in this regard.

  1. The construction that clause 9.1 only restricts development in the manner described for a period of seven years is supported by the definition of ‘Development’, which contemplates development of the Activity Centre Land in accordance with ‘any planning permit issued by Council’ in respect of either the Bonleaf land or the Fabcot land, ‘including but not limited to the construction of buildings and works depicted in the plans endorsed under [the 2008 permits]’. It could not be more clear that the defined term ‘Development’ includes development other than development undertaken pursuant to the 2008 permits. The s 173 Agreement contemplates that there may be such development during the term of and regulated by the s 173 Agreement. The defined term is used in clauses 5.1 and 5.2 in describing when the provision of shared parking is to occur, and again in clauses 12 and 13, which stipulate that requirements for traffic management works and public works are to be met ‘[b]efore commencing Development’.

  1. We reject TPSC’s contention that the requirement in clause 9.1 to develop the Activity Centre Land generally in accordance with plans endorsed under the 2008 permits was a requirement that continued to bind the parties indefinitely.  There is no basis for inferring that the restrictions imposed by clause 9.1 in the first seven years were intended to continue indefinitely.  As discussed, such a construction ignores the ordinary grammatical meaning of the words ‘for a period of 7 years’ in clause 9.1. 

  1. Furthermore, we do not consider that an agreement to develop land in an integrated fashion that restricts development to specified plans for a period of seven years and then allows development in accordance with other plans is necessarily ‘uncommercial’ or something no commercial operator would ever agree to.  Lifting the restriction in clause 9.1 after seven years does not involve ‘unrestricted’ development after that period.  To the contrary, the Kingston Planning Scheme, including the applicable Zone and the Design and Development Overlay for the Activity Centre Land, will continue to constrain development on the Land.     

  1. It is true that the s 173 Agreement contains a number of express references to the 2008 permits. One of its purposes is to ‘give effect to the requirements of the planning permits referred to in the introductory clauses F and G above.’ The permits referred to in clauses F and G are the 2008 Bonleaf permit and the 2008 Fabcot permit (or, rather, the applications for these permits, as they had not been issued by the time the s 173 Agreement was entered into). The s 173 Agreement is intended to give effect to the requirements in these permits, among other things. In our view, however, the removal after a period of seven years of the requirement for the use and development of the Activity Centre Land to be generally in accordance with the requirements of the 2008 permits does not derogate from Recital L.3, which expresses the parties’ intention that the s 173 Agreement give effect to the requirements of the 2008 permits. Clause 9.1 does require that effect be given to the requirements of the 2008 permits, but only for a period of seven years. Such a construction is not inconsistent with the purpose identified in the recitals.

  1. There are a number of clauses in the s 173 Agreement requiring effect to be given to particular arrangements embodied in the 2008 permits. In clauses 3.1 and 3.2, the issue of the 2008 permits triggers a requirement to make financial contributions for road works; in clause 4.1, arrangements for access to the Bonleaf land are to be based on plans approved pursuant to the 2008 Bonleaf permit; clauses 5.1 and 5.2 impose car parking obligations on Fabcot and Bonleaf upon the completion of the ‘Development’ under the 2008 Fabcot permit and the 2008 Bonleaf permit respectively.

  1. Clauses 3.1 and 3.2 did their work upon the issue of the 2008 permits and are not inconsistent with the grant of other permits.  Clause 5.2, which imposes on Bonleaf an obligation to make car spaces available to the public ‘upon completion of Development’, while containing a reference to the 2008 Bonleaf permit and therefore, arguably, an internal inconsistency, also contemplates as a trigger for the sharing of car spaces the completion by Bonleaf of a development under a different permit.  Moreover, as the primary judge found, clause 5.2 aims to ensure that car spaces are shared, not to require development of the Bonleaf land in any particular form.  As part of the context for construing clause 9.1, clause 5.2 does not stand in the way of or derogate from the construction of clause 9.1 as not precluding development under other permits after the expiry of the seven year period.

  1. Likewise, clause 4.1 is directed to ensuring that occupants of and visitors to the Bonleaf land can access that land through the Fabcot land.  The access arrangements are to be those ‘depicted on any plans approved pursuant to [the 2008 Bonleaf permit]’.  This does not require the development of the Bonleaf land to be pursuant to the 2008 Bonleaf permit.  Rather, it requires the access points to be identified by reference to plans associated with the 2008 permit, whether or not the 2008 permit is acted upon. 

  1. In this case, it must be acknowledged that no plans were endorsed (or ‘approved’) under the 2008 Bonleaf permit.  However, the relevant access points to the Bonleaf land were shown on the application plans for the 2008 permit and, as the Tribunal found, they were substantially the same as those in the plans accompanying Bonleaf’s 2014 permit application.  

  1. Furthermore, we observe that clause 9.1 itself refers to plans ‘endorsed’ under the 2008 permits, when, in fact, no plans were endorsed under the 2008 Bonleaf permit. It has not been suggested that, as a consequence, clause 9.1 did not operate to restrict the development of the Bonleaf land to development permitted by the 2008 permit. To the contrary, that restriction is submitted by TPSC to endure, not just for seven years, but for the life of the s 173 Agreement.

  1. Seen as part of the context in which clause 9.1 is to be construed, clause 4.1 does not stand in the way of or derogate from the construction of clause 9.1 that we consider to be applicable. 

  1. Having regard to the plain meaning of the text of clause 9.1 and to the s 173 Agreement viewed as a whole, we do not consider that the context provided by these clauses requires a different construction of clause 9.1 from the construction adopted by the Tribunal and the primary judge.

  1. It follows that the decision to grant the permit was not based on an irrelevant consideration, namely, the misconstruction of the s 173 Agreement. Clause 9.1 restricts the use and development of the Activity Centre Land to development generally in accordance with the use and development depicted in the plans for the 2008 permits, but only for a period of seven years.

  1. The primary judge was correct to hold that the Tribunal did not misconstrue the s 173 Agreement and that it was open to the Tribunal to conclude that the use and development of the Bonleaf land could be ‘for something quite different’ to that which was contemplated in the 2008 Bonleaf permit, as long as obligations of an ongoing nature in the s 173 Agreement were met.[55]

    [55]Ibid [89].

  1. Ground 1 is not made out.

Ground 2

  1. TPSC submits that the Tribunal and the primary judge erred in holding that the Council’s grant of the 2014 Bonleaf permit (the NOD) constituted a written consent by the Council to alter Bonleaf’s obligation to share car spaces under clause 5.2 of the s 173 Agreement because the preconditions required for the exercise of such a discretion by the Council were not satisfied, namely, the completion of the development of the Bonleaf land under the 2008 Bonleaf permit.

  1. We reject this submission.  The completion of the ‘Development’ of the Bonleaf land under the 2008 Bonleaf permit is not a ‘precondition’ for the exercise of the Council’s discretion to vary the car parking arrangements.  It marks the point in time when car parking spaces must be made available to the general public and visitors to the Fabcot land, unless the Council has consented to another arrangement.  Clause 5.2 refers to the ‘prior’ written consent of the Council, meaning that consent is to be given prior to the completion of the development. 

  1. In these circumstances, we consider that the primary judge did not err in holding that the NOD granting the permit stands as consent to vary the arrangements in clause 5.2.

  1. Ground 2 is not made out.

Disposition

  1. Neither of the grounds of appeal is made out.  Leave to appeal will be granted but the appeal must be dismissed.

---


Actions
Download as PDF Download as Word Document
Cases Citing This Decision

4

High Court Bulletin [2020] HCAB 2
Hancock v Nillumbik Shire Council [2022] VSC 670
Kinchington Estate Pty Ltd v Wodonga City Council [2019] VSC 745