Westfield Management Ltd v Perpetual Trustee Co Ltd

Westfield Management Ltd appealed to the Court of Appeal of New South Wales against a decision of the primary judge concerning the validity and enforceability of a condition imposed on a development consent. The dispute centred on condition 56, which required the owner of the Glasshouse property to extend an existing easement to benefit two other properties, Imperial Arcade and Centrepoint. Perpetual Trustee Co Ltd, as the owner of the Glasshouse, argued that the condition was unreasonable and void for uncertainty, as it required the consent of third parties and lacked clear mechanisms for implementation, including the determination of consideration and reciprocal rights.

The primary legal issues before the Court of Appeal were whether condition 56 was valid and enforceable, or whether it was void for uncertainty or unreasonableness. Specifically, the court had to determine if the condition, as imposed by the council, was so unreasonable that no planning authority, properly advised, could have imposed it, and if it was sufficiently certain to be capable of compliance. The court also considered whether the subsequent acquisition of all three properties by Westfield rectified the inherent unreasonableness of the condition at the time of its imposition.

The Court of Appeal found that the primary judge erred in concluding that condition 56 was unreasonable and void. The court reasoned that while the condition presented practical difficulties at the time of its imposition, the subsequent consolidation of ownership of all three properties by Westfield rendered the condition capable of performance. The court held that the primary judge had incorrectly assessed the unreasonableness of the condition by focusing on the circumstances at the time of its imposition, rather than its enforceability in light of the changed circumstances. The court applied the principles of statutory interpretation and the test for unreasonableness in administrative law, finding that the condition was not so uncertain or impractical as to be void.

The Court of Appeal allowed the appeal, setting aside the orders of the primary judge. It declared condition 56 to be valid and enforceable, and dismissed Perpetual's cross-claim. The matter was remitted to the Land and Environment Court for a decision on the costs of the first instance hearing, and Perpetual was ordered to pay Westfield's costs of the appeal.