Zhengtang Precinct Loft Pty Ltd v The Corporation of the City of Adelaide

[2024] SASCA 148

SUPREME COURT OF SOUTH AUSTRALIA

(Court of Appeal: Civil)

ZHENGTANG PRECINCT LOFT PTY LTD v THE CORPORATION OF THE CITY OF ADELAIDE

[2024] SASCA 148

Judgment of the Court of Appeal  

(The Honourable President Livesey, the Honourable Justice S Doyle and the Honourable Justice Bleby)

19 December 2024

ENVIRONMENT AND PLANNING - PLANNING - DEVELOPMENT ASSESSMENT AND CONTROL - DECISIONS: CONSENTS, APPROVALS AND PERMITS - INTERPRETATION AND CONSTRUCTION

APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - POINTS AND OBJECTIONS NOT TAKEN BELOW - WHEN ALLOWED TO BE RAISED ON APPEAL

STATUTES - ACTS OF PARLIAMENT - INTERPRETATION

This is an appeal from a decision of the Environment, Resources and Development Court (‘the ERD Court’), dismissing the appellant’s challenge to the validity of an enforcement notice issued against it by the respondent under s 213(1) of the Development Act 1993 (SA).

The enforcement notice directed the appellant to refrain from undertaking a proposed development on an area of land on Franklin Street, Adelaide (‘the Land’), on the basis that the proposed development exceeded the maximum building height provided for by a Land Management Agreement (‘LMA’) which the appellant and respondent entered into in 2014.

The LMA referred to a Concept Plan annexed to the LMA which stipulated a maximum height of 25 metres for developments on the Land. The LMA also referred to the Adelaide (City) Development Plan, which at the time provided for a maximum building height on the Land of 53 metres.

On 17 September 2020, the appellant lodged a development application in which it sought development plan consent for the proposed development on the Land. In March 2021, the State Commission Assessment Panel (‘SCAP’) refused the application. The appellant appealed this decision to the ERD Court, naming the State Planning Commission as the respondent (of which SCAP was a delegate). Consent orders were subsequently made, granting the application for development plan consent. The respondent was not a party to these proceedings.

In late 2021, the appellant notified the respondent that it had received development plan consent and sought to proceed with the development. In June 2022, the respondent issued an enforcement notice to the appellant, claiming it had reason to believe on reasonable grounds that the appellant intended to undertake a development in breach of the LMA by building above the 25 metre maximum height stipulated in the LMA Concept Plan.

The appellant appealed to the ERD Court on the basis that the respondent had misconstrued the maximum building height provision in the LMA which, in its submission, permitted or required development on the Land to achieve a maximum height of 53 metres. The ERD Court rejected the appellant’s alternative construction and dismissed the appeal.

The appellant now appeals on the basis that the ERD Court erred in upholding the respondent’s construction of the LMA (Grounds 1-4). The appellant also seeks leave to amend its grounds of appeal to rely upon two additional grounds, not raised before the ERD Court, namely: (i) that the respondent’s enforcement notice should have been set aside on the basis that the maximum height provision in the LMA was overridden by the grant of planning consent the appellant’s favour (Ground 1A); or, in the alternative, (ii) that the ERD Court had, and ought to have exercised, a discretion not to enforce the LMA (Ground 1B). 

Held (per the Court), granting the appellant leave to amend its grounds of appeal, allowing the appeal, setting aside the orders made below and remitting the matter for further hearing:

1.No error has been identified in the ERD Court’s construction of the maximum height provision of the LMA, therefore, Grounds 1-4 have not been made out;

2.The Development Act 1993 (SA) and Planning, Development and Infrastructure Act 2016 (SA) should not be construed as giving rise to any implication that a development authorisation operates automatically to override an LMA to the extent of any inconsistency, however, these Acts should be construed as giving rise to a discretion on the part of the ERD Court to not enforce an LMA in the event of its inconsistency with a subsequent development authorisation;

3.Given the general importance of the issues raised and the limited prejudice to the respondent, this is an appropriate case in which to permit the appellant to rely upon its additional grounds of appeal; and

4.Due to the merit in the construction contended for in Ground 1B, it is appropriate to allow the appeal on this ground, set aside the orders made by the ERD Court on 17 February 2023 and remit the matter to the ERD Court for further hearing in accordance with these reasons.

Australian Constitution s 109; Development Act 1993 (SA) ss 3, 10, 34(1)(a), 34(23), 34(24), 34(25), 34(26), 34(27), 53(2), 57, 57(1), 57(2), 57(2a), 57(8), 57(12), 57A, 57A(2), 83, 84, 84(2)(a), 84(9), 85, 86, 86(1)(a), 86(1)(d)(ii), 88, 88(1)(b); Development (Miscellaneous) Amendment Act 2005 (SA); Development (System Improvement Program) Amendment Act 2000 (SA) ss 24(a), 24(b); Legislation Interpretation Act 2021 (SA); Legislative Instruments Act 1978 (SA); Planning, Development and Infrastructure Act 2016 (SA) ss 12(1), 12(2)(a), 17, 82, 83, 84, 85, 86, 87, 192, 192(1), 192(4), 192(5), 192(12), 192(13), 192(15), 192(18), 193, 201, 202, 205(1)(e), 212, 213(8), 214, 212(2)(b), 213(1), sch 8, cl 32(2), referred to.
Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; Inghams Enterprises Pty Ltd v Hannigan (2020) 379 ALR 196; Jolly v District Council of Yankalilla (2006) 143 LGERA 428; Leon Fink Holdings Pty Ltd v Australian Film Commission (1979) 141 CLR 672; MBJY v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2021) 284 FCR 152; Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; Suttor v Gundowda Pty Ltd (1950) 81 CLR 418; SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362; Tohi v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2021) 285 FCR 187; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; University of Wollongong v Metwally (No 2) (1985) 59 ALJR 481; Victoria v Tatts Group Ltd (2016) 90 ALJR 392; Water Board v Moustakas (1988) 180 CLR 491; Zhengtang Precinct Loft Pty Ltd v The Corporation of the City of Adelaide [2023] SAERDC 3; Zweck v Town of Gawler (2015) 124 SASR 319, considered.

ZHENGTANG PRECINCT LOFT PTY LTD v THE CORPORATION OF THE CITY OF ADELAIDE
[2024] SASCA 148

Court of Appeal – Civil:  Livesey P, S Doyle and Bleby JJA

1. THE COURT:    This appeal concerns a land management agreement (the LMA) entered into between the appellant land owner and developer, Zhengtang Precinct Loft Pty Ltd (Zhengtang), and the respondent, the Corporation of the City of Adelaide (the Council).  Having formed the view that Zhengtang’s proposed development exceeded the maximum height provided for by the LMA, the Council issued an enforcement notice directing Zhengtang to refrain from undertaking the development.

2. Zhengtang issued proceedings in which it challenged the Council’s construction of the maximum height provision in the LMA and, as a consequence, the validity of its enforcement notice. 

3. At first instance, the Environment, Resources and Development Court (the ERD Court), in joint reasons of Judge Burnett and Commissioner Nolan,[1] upheld the Council’s construction of the LMA, and the validity of its enforcement notice.

   [1]     Zhengtang Precinct Loft Pty Ltd v The Corporation of the City of Adelaide [2023] SAERDC 3 (Reasons).

4. In its appeal to this Court, Zhengtang contends that the ERD Court erred in upholding the Council’s construction of the LMA.  Zhengtang also seeks leave to amend its grounds of appeal to rely upon two additional grounds, not raised before the ERD Court, namely: (i) that the Council’s enforcement notice should have been set aside on the basis that the maximum height provision in the LMA was overridden by the grant of planning consent in Zhengtang’s favour; or, in the alternative, (ii) that the ERD Court had, and ought to have exercised, a discretion not to enforce the LMA.  These proposed additional grounds of appeal require consideration of the provisions of both the Development Act 1993 (SA), and its successor, the Planning, Development and Infrastructure Act 2016 (SA) (the PDI Act), in relation to land management agreements.

5. For the reasons which follow, Zhengtang’s challenge to the ERD Court’s construction of the LMA must be rejected.  Its proposed development exceeded the maximum height provided for in the LMA, and was in contravention of that agreement. However, it is appropriate to permit Zhengtang to raise its two additional grounds of appeal.  And while there is no merit in the first, there is merit in the second.  The appeal should be allowed on this ground, and the matter remitted to the ERD Court for it to consider whether to exercise its discretion not to enforce the maximum height provision in the LMA.

   Background

6. Zhengtang is the owner and registered proprietor of three adjacent parcels of land on Franklin Street, Adelaide.  It purchased the parcels of land in 2014 with the intention of building a complex of residential apartment towers in three stages, as part of what is sometimes referred to as the Balfours site development.

7. The Balfours site, as set out in a concept plan attached to the LMA, has Morphett Street as its eastern boundary, Elizabeth Street as its western boundary, Franklin Street as its southern boundary, and various points (about halfway to three quarters of the way to Waymouth Street from Franklin Street) as its northern boundary.  The proposed development consists of the construction of several separate buildings, intended to occur in stages over an extended period of time.

8. The dispute the subject of these proceedings relates to a parcel of land situated at 156-172 Franklin Street (being the land described as Certificate of Title Volume 6219 Folio 582) (the Land), on the southern boundary of the Balfours site development.  It forms part of Stage 2 of the development. 

9. Stage 1 of the Balfours site development involved two residential apartment towers of 18 storeys and 20 storeys, containing 268 apartments, and an IGA supermarket, restaurants and other retail spaces on the ground level.  It was completed in 2019.  Stage 2 involves a proposed residential apartment tower of 16 storeys and 53 metres in height, with retail spaces on the ground level and two levels of basement car parking.  This stage has been held up for several years due to the ongoing dispute regarding the LMA.  Stage 3 involves a proposed residential apartment tower of 17 storeys, tailored to student accommodation.  It is not intended to be undertaken until Stage 2 has been completed.

   The Land Management Agreement

10. The parcels of land the subject of each stage of the Balfours site redevelopment are each subject to a separate land management agreement with the Council.  Zhengtang and the Council entered into the LMA in relation to the Land to be used for Stage 2 on 7 November 2014.  The LMA was subsequently noted as an encumbrance on the certificate of title for the Land.

11. The LMA commenced with the following recitals:

    A.     The Owner is the proprietor of an estate in fee simple in the whole of the land comprised in Certificate of Title Volume 6057 Folio 769 being certain land situated at Franklin Street, Adelaide, SA 5000 (“Land”).[2]

    B.   The Council wishes to ensure that the Land is developed in accordance with the provisions of this Agreement;

    C. Pursuant to the provisions of Section 57(2) of the Development Act (“Act”) the Owner has agreed with the Council to enter into this Agreement relating to the development of the Land subject to the terms and conditions set out in this Agreement;

    [2]     The Land’s Certificate of Title has been superseded by the current Certificate of Title, Register Book Volume 6219 Folio 582.

12. Clause 3 provided the following by way of ‘Owner’s Obligations’:

    3.  OWNER’S OBLIGATIONS

    The Owner agrees with the Council that the Owner must:

    3.1 cause the Land to be developed in accordance with the requirements set out in Appendix 1 of this Agreement (“Development Criteria”); and

    3.2   not permit the Land to be developed in any manner other than in accordance with the Development Criteria without obtaining the prior written approval of the Council.

13. Clause 7 addressed variation and waiver of the provisions of the LMA:

    7.  VARIATION AND WAIVER

    7.1  This Agreement may not be varied except by a Supplementary Agreement by Deed signed by the Council and the Owner.

    7.2  The Council may waive compliance by the Owner with the whole or any part of the obligations on the Owner’s part herein contained provided that no such waiver shall be effective unless expressed in writing and signed by the Council.

14. An appendix to the LMA contained the ‘Development Criteria’ referred to in Clause 3:

    Appendix 1

    Development Criteria

    The development of the Land must be undertaken in accordance with the annexed concept plan and without limitation must comply with the following:

    (a)    incorporation of pedestrian walkways (and where applicable, vehicular access) that will connect with the existing pedestrian and vehicular walkways being Wauchope Lane, Ranelagh Walk and Balfours Corner as nominated on this concept plan;

    (b)    the provision of a two (2) level car park below plaza level;

    (c)    the pedestrian links shall be designated as common property in future land divisions;

    (d)    the maximum building heights as outlined on this concept plan and prescribed in the Adelaide (City) Development Plan are achieved within a twenty percent (20%) tolerance noting the setback requirements and different height levels will result in a building that has a podium along Franklin Street;

    (e)    if required by the Council in its absolute discretion incorporation of public art within the development on the Land of a type and in such locations agreed between the Owner and the Council. The cost of such public art if the Council requires it shall be borne by the Council to an amount determined by the Council in its absolute discretion; and

    if required by the Council in its absolute discretion to the extent beyond that required as a condition of any statutory approval obtained by the Owner to develop the Land the undertaking of landscaping and beautification of the public realm adjacent to or adjoining the Land of a type and in a location agreed between the Owner and the Council. The cost of such works if the Council requires them to be undertaken shall be borne by the Council up to an amount determined by the Council in its absolute discretion.

15. It can be seen that paragraph (d) of the Development Criteria refers to the ‘maximum building heights’ in both the annexed concept plan (the Concept Plan) and the Adelaide (City) Development Plan (the Development Plan).

16. The Concept Plan is dated April 2012 and covers the entire Balfours site development.  It shows the construction of a number of separate buildings across the Balfours site, including on the Land the subject of Stage 2. However, the LMA only imposes obligations in respect of the portion of that site comprising the Land; it does not impose obligations in respect of the balance of the land forming part of the Balfours site.

17. The Concept Plan specifies heights for four of the buildings to be constructed on the Balfours site:

    ·the two buildings that front Franklin Street, including the building on the Land the subject of the proposed Stage 2 development, have a specified height of 25 metres (with a setback or perimeter with a specified height of 18 metres);

    ·the building that is in the central part of the Balfours site redevelopment has a specified height of 58 metres; and

    ·the building that faces Elizabeth Street has a specified height of 31 metres (with a setback or perimeter with a specified height of 21 metres).

18. No heights are shown for the buildings which have already been constructed on the Balfours redevelopment site, referred to on the plan as the Altitude and Gallery buildings.  It can be seen that the Concept Plan, through its different building heights, provides for what has been described as a podium effect across the Balfours site.

19. As will be explained below, the Development Plan in force at the relevant time provided for a uniform maximum building height across most of the Balfours site, including the Land, of 53 metres.

    Zhengtang’s development application

20. On 17 September 2020, Zhengtang lodged a development application in which it sought development plan consent for the proposed Stage 2 development on the Land (the DA).

21. In the DA, Stage 2 was described as involving the partial demolition of an existing building, and construction of a 16 storey mixed-use building comprising residential apartments, ground floor retail tenancies and two levels of basement car parking.

22. At the time the DA was lodged, the Development Plan in force provided for a maximum building height for the Land of 53 metres.  However, as described above, the LMA (through its reference in the Development Criteria to the maximum building heights in the Concept Plan) also identified a maximum building height for the Land of 25 metres.

23. The proposed Stage 2 development was a development in the City of Adelaide valued at greater than $10 million.  Accordingly, the State Commission Assessment Panel (SCAP) was the ‘relevant authority’ for the purposes of assessing the DA.[3]

    [3]     The Development Assessment Commission was established under the Development Act, s 10. On 1 August 2017, this was replaced by the State Planning Commission, established under the PDI Act, s 17. The State Planning Commission in turn delegated its assessment functions to SCAP.

24. On 25 November 2020, SCAP first considered Zhengtang’s DA for Stage 2 of the proposed development.  The minutes of the SCAP meeting on that day record that it discussed the DA and ‘confirmed its support for the overall design and massing of the building’, but resolved to defer determination of the application ‘pending written confirmation from the City of Adelaide that Council agrees to amend the Land Management Agreement to remove reference to the overall height of the development on the subject site’.

25. On 18 December 2020, Zhengtang’s lawyers wrote to the Council seeking its agreement to waive the building height restrictions imposed by the LMA and, in particular, to waive any obligation on the part of Zhengtang to comply with cl 3.1 of the LMA and paragraph (d) of the Development Criteria in Appendix 1.

26. On 11 February 2021, lawyers for the Council replied to Zhengtang’s letter.  The Council acknowledged Zhengtang’s request that it waive compliance with any height restrictions in the LMA, but noted that Zhengtang intended to engage in further discussions with SCAP regarding the DA.  The letter then stated:

    The Council is of the view that this is an appropriate course of action as any consideration by it of your waiver request would otherwise presently be premature.  The outcome of SCAP’s determination of the Development Application will form a relevant consideration for the Council in the context of any request to vary or waive compliance with the LMA.  SCAP as the relevant planning authority is required to determine the Development Application in a manner consistent with case law authority including Zweck v Town of Gawler (2015) 124 SASR 319 at [90]-[91].

1. On 10 March 2021, SCAP met and resolved that the DA be refused. SCAP noted that the proposed Stage 2 development was ‘not seriously at variance with the policies in the Development Plan’, and generally accorded ‘with the related Objectives and Principles of Development Control of the Adelaide (City) Development Plan’. However, in deciding to refuse the DA, SCAP also noted s 57(12) of the Development Act and the LMA, particularly the departure from the maximum building height required by cl 3 and the Concept Plan.  SCAP concluded that the proposed building height was inconsistent with the LMA which ‘seeks to limit the maximum building height to be developed upon the land’.

2. On 6 April 2021, Zhengtang filed an appeal from this decision to the ERD Court, pursuant to s 86(1)(a) of the Development Act.  Zhengtang contended, amongst other things, that SCAP had misconstrued the maximum height provision in the LMA.  The appeal, which named the State Planning Commission as the respondent, was resolved on 13 September 2021, with the ERD Court noting that the parties ‘have reached agreement on the settlement of this action and jointly consent to this order to give effect to the settlement’; and making consent orders granting the DA for the Stage 2 development of a building with 16 storeys and a height of 53 metres.  The Council was not a party to this appeal.

   The Council’s enforcement notice

3. In late 2021, Zhengtang engaged with the Council about the outcome of its appeal and its DA.

4. On 30 March 2022, the Council invited Zhengtang to inform it of its position in relation to the LMA, noting that the Council wanted to determine whether there was ‘an opportunity to explore an alternative design outcome’ for the proposed Stage 2 development. 

5. Zhengtang replied on 22 April 2022, noting that a valid planning approval for Stage 2 had been obtained from SCAP and asserting that it had complied with its obligations under the LMA by obtaining a planning approval that achieved the Development Criteria in Appendix 1 to the LMA.  The letter concluded with Zhengtang seeking an indication of the Council’s formal position in relation to the LMA within 14 days.

6. On 13 May 2022, Zhengtang emailed the Council, noting that a formal response had not been received in relation to the LMA and accordingly it would continue with marketing and construction of Stage 2.  On 24 May 2022, the Council emailed Zhengtang noting that it was still reviewing its position with respect to compliance with the LMA.

7. On 20 June 2022, the Council issued an enforcement notice under s 213(1) of the PDI Act to Zhengtang. The notice referred to the LMA entered into under s 57(2) of the Development Act,[4] and stated that the LMA, by reason of the Development Criteria and Concept Plan in Appendix 1, provided for a maximum height for buildings on the Land of 25 metres (with a 20 per cent tolerance).  The notice recited that Zhengtang’s proposed development on the Land involved a building of 16 storeys and a height of 53 metres.  After referring to SCAP’s refusal of the DA, the successful appeal from this decision to the ERD Court, and Zhengtang’s advice that it intended to proceed with its development, the Council claimed to have reason to believe on reasonable grounds that Zhengtang intended to undertake a development in breach of the LMA and hence the PDI Act.[5]  The notice directed Zhengtang to refrain from causing, suffering or permitting the development to be undertaken on the Land. 

   [4] To be given the same force and effect as an agreement under s 192 of the PDI Act, pursuant to cl 32(2) of the transitional provisions in Schedule 8 to that Act.

   [5] Noting that s 212(2)(b) of the PDI Act provides that a reference to a breach of the Act includes a contravention or threatened contravention of a land management agreement.

8. On 5 July 2022, Zhengtang filed a second appeal with the ERD Court, this time appealing against the enforcement notice pursuant to s 213(8) of the PDI Act.  The appeal sought orders for the withdrawal or quashing of the enforcement notice.

9. The only issue on the appeal to the ERD Court was the proper construction of the maximum height provision of the LMA and, in particular, whether – as the Council argued – the LMA restricted the height of development on the Land to a maximum of 25 metres (with a 20 per cent tolerance) as shown on the Concept Plan; or whether – as Zhengtang argued – it required or permitted development on the Land to achieve a maximum height of 53 metres in accordance with the Development Plan in force at the time.

10. On 17 February 2023, the ERD Court dismissed Zhengtang’s appeal, rejecting its contentions regarding the interpretation of the LMA.  Having accepted that the LMA restricted the height of any development on the Land to a maximum of 25 metres (with a 20 per cent tolerance), the Court declined to set aside the Council’s enforcement notice. 

11. On 14 March 2023, Zhengtang filed an appeal to this Court.  Before addressing the matters raised on this appeal in any detail, it is convenient to commence by summarising the legislative and planning context in which the issues fall to be considered.

    The legislative framework and planning context

12. Both the Development Act and its successor, the PDI Act, contain provisions in relation to land management agreements, or LMAs.

    The Development Act

13. The LMA between Zhengtang and the Council was entered into under the now repealed Development Act. 

14. The objects of the Development Act were set out in s 3. They involved providing for ‘proper, orderly and efficient planning and development in the State’, including through the creation of Development Plans in order to, relevantly, ‘enhance the proper conservation, use, development and management of land and buildings’.

15. The Act included a regime for giving effect to LMAs. In Part 5 (‘Land management agreements’) of the Act, s 57 addressed the power to enter into agreements, the terms and registration of agreements, the force and validity of agreements, and the effect of agreements on subsequent owners of the land to which they relate. In particular, s 57 relevantly provided:

    57—Land management agreements

    (1)The Minister may enter into an agreement relating to the development, management, preservation or conservation of land with the owner of the land.

    (1a)   …

    (1b)   … 

    (2)A council may enter into an agreement relating to the development, management, preservation or conservation of land within the area of the council with the owner of the land.

    (2a)The Minister or a council must, in considering whether to enter into an agreement under this section which relates to the development of land and, if such an agreement is to be entered into, in considering the terms of the agreement, have regard to—

    (a)     the provisions of the appropriate Development Plan and to any relevant development authorisation under this Act; and

    (b)     the principle that the entering into of an agreement under this section by the Minister or a council should not be used as a substitute to proceeding with an amendment to a Development Plan under this Act.

    (2b)Agreements entered into under this section after the commencement of this subsection must be registered in accordance with the regulations (and any such agreement will have no force or effect unless or until it is so registered).

    (2c)A register must be kept available for public inspection (without charge) in accordance with the regulations.

    (2d)   …

    (2e)   …

    (3)The Minister, a greenway authority or a council has power to carry out on private land any work for which provision is made by agreement under this section.

    (3a)   …

    (3b)   …

    (4)An owner of land must not enter into an agreement under this section unless all other persons with a legal interest in the land consent.

    (5)The Registrar-General must, on an application of a party to an agreement made for the purposes of this section, note the agreement against the relevant instrument of title or, in the case of land not under the provisions of the Real Property Act 1886, against the land.

    (6)An agreement under this section has no force or effect under this Act until a note is made under subsection (5).

    (7)Where a note has been entered under subsection (5), the agreement is binding on the current owner of the land whether or not the owner was the person with whom the agreement was made and notwithstanding the provisions of the Real Property Act 1886.

    (8)The Registrar-General must, if satisfied on the application of the Minister, the greenway authority, the council or the owner of the land that an agreement in relation to which a note has been made under this section has been rescinded or amended, enter a note of the rescission or amendment against the instrument of title, or against the land.

    …

    (12)The existence of an agreement under this section may be taken into account when assessing an application for a development authorisation under this Act.

    (13)   …

16. Section 57A made similar provision for LMAs between a ‘designated authority’ (the Minister or a council) and a person applying for development authorisation under the Act.

17. Part 11 of the Development Act contained provisions relating to ‘Enforcement, disputes and appeals’. Section 83 of the Development Act provided that a breach of the Act included a contravention, or threated contravention, of an LMA. Section 84 then provided that if a relevant authority (which was defined to include a council) had reason to believe on reasonable grounds that a person had breached the Act, it may, inter alia, issue a notice directing them to refrain from the act or course of action that constitutes the breach (s 84(2)(a)).  The person receiving an enforcement notice under this section was entitled to appeal against it to the ERD Court (s 84(9)). 

18. Section 85 permitted an application to the ERD Court to remedy or restrain a breach of the Act. Section 86 addressed other applications that may be made to the ERD Court, including by a person served with an enforcement notice under s 84 (s 86(1)(d)(ii)).

19. Section 88 addressed the ERD Court’s powers in determining any matters brought before it, and included power to affirm, vary or quash any notice that had been issued (s 88(1)(b)).

    The PDI Act

20. The PDI Act was assented to in April 2017, with its provisions coming into operation in a staged manner over the following five years.  It contains a very similar regime for giving effect to LMAs.

21. In s 12(1) of the PDI Act, its primary object is described as involving the creation of ‘an effective, efficient and enabling planning system, linked with other laws, that … promotes and facilitates development, and the integrated delivery and management of infrastructure and public spaces and facilities, consistent with planning principles and policies’.  In association with this primary object, the scheme established by the PDI Act is intended, inter alia, to be ‘based on policies, processes and practices that are designed to be simple and easily understood and that provide consistency in interpretation’ (s 12(2)(a)) and to ‘promote certainty for people and bodies proposing to undertake development while at the same time providing scope for innovation’.

22. The scheme established by the PDI Act introduced the Planning and Design Code (the Code), which replaced numerous Development Plans in place under the Development Act.  The Code carries the force of a legislative instrument under the Legislation Interpretation Act 2021 (SA) and the Legislative Instruments Act 1978 (SA).

23. Turning to the provisions of the PDI Act relating to LMAs, pursuant to cl 32(2) of the Schedule 8 transitional provisions, an LMA in force immediately before the designated day (31 July 2020) is taken to be in force under the corresponding provision of the PDI Act, and has the same force and effect as it had immediately before the designated day.

24. In Part 14 (‘Land management agreements’) of the PDI Act, ss 192 and 193 provide for LMAs in substantially the same terms as ss 57 and 57A of the Development Act. Further, in Part 18 (‘Enforcement’), ss 212, 213 and 214 mirror the enforcement provisions in ss 83, 84 and 85 of the Development Act.

25. Part 16 (‘Disputes, reviews and appeals’) of the PDI Act provides for applications and proceedings before the ERD Court. Sections 201 and 202 address the applications or proceedings that may be brought, and s 205 addresses the ERD Court’s powers in determining matters brought before it. The latter is in relevantly equivalent terms to s 88 of the Development Act.

26. The appeal to the ERD Court in the present case was brought by Zhengtang under s 213(8) of the PDI Act.[6] Section 205(1)(b) of the PDI Act confers jurisdiction on the ERD Court to hear and determine an appeal against a ‘notice’, including an enforcement notice issued by an authority such as the Council.  This conferral of jurisdiction necessarily conferred upon the ERD Court the power to determine any issue of fact, mixed law and fact, or law, that must be decided in order to determine the appeal.  The conferral of jurisdiction under s 205(1) includes a broad discretion to ‘if appropriate in the circumstances of the proceedings – make any determination or declaration, or grant any other remedy or relief, as the Court thinks fit’.[7]

    [6] Being the equivalent of s 84(9) of the Development Act.

    [7]     PDI Act, s 205(1)(e).

    The Development Plans

27. Given some of the construction arguments pursued by Zhengtang, it is relevant to summarise the history of the Development Plans that have applied to the Balfours site.

28. The LMA was entered into on 7 November 2014.  At that date, the Adelaide (City) Development Plan that was gazetted on 25 October 2012 (the 2012 Development Plan) was in force.  The 2012 Development Plan had a standardised maximum height of 53 metres across nearly all of the Balfours site, including the Land.  This height provision remained in place as at 17 September 2020, being the date on which Zhengtang lodged its DA seeking development plan consent for the Stage 2 development.

29. The 2012 Development Plan was preceded by earlier Adelaide (City) Development Plans.

30. The Development Plan gazetted on 24 February 2005, and consolidated on 10 March 2005, provided, with some exceptions, for a 14 metre maximum height across the area which encompassed the Balfours site.

31. The Development Plan gazetted on 17 November 2005, and consolidated on 24 November 2005, included new height, scale and siting provisions for an area referred to as the Balfours Policy Area (which covered the area bordered by Franklin, Morphett, Elizabeth and Waymouth Streets).  As depicted in the accompanying Balfours Policy Area Concept Plan, it included varying maximum heights across the Balfours Policy Area.  For the southern, northern and eastern boundaries, and hence including the land fronting Franklin Street, it provided for a four metre setback from the road at a height of 14 metres, intended to create a visual break in the vertical presence of buildings.  There was then a 21 metre maximum height for the land on those boundaries, including the Land.  For the western Elizabeth Street boundary, there was a setback with a maximum height of 17 metres, and then a maximum height of 27 metres.  A maximum building height of 52 metres applied to the two building sites in the central part of the Balfours Policy Area.  The objectives of the podium effect created by these maximum heights included complementing the (lower) building heights in the immediately surrounding areas, as well as providing a visual break in the vertical presence of buildings, and limiting the visual presence or visibility of the tall buildings in the centre of the Balfours site from the main footpaths around the Balfours Policy Area.  The differing building heights were also intended to split the tall buildings to provide greater potential for built form articulation, penetration of light and air, and to provide separation for privacy purposes.

32. The Development Plan consolidated as at 12 January 2006 (the 2006 Development Plan) included a similar podium effect for the Balfours Policy Area, but with increased maximum heights.  The Balfours Policy Area Concept Plan accompanying that consolidation provided for a setback from the road of four metres with a maximum height of 18 metres, and then a maximum height of 25 metres, for the buildings fronting Franklin Street (and hence including any building on the Land).  For the western Elizabeth Street boundary, there was a setback with a maximum height of 21 metres, and then a maximum height of 31 metres.  A maximum height of 58 metres applied to the two building sites in the central part of the Balfours Policy Area.  The rationale for the building heights was explained in similar terms.  Reference was also made to a minimum building height of 50 per cent of the maximum building height, where the latter was greater than 17 metres.

33. It is to be noticed that the Concept Plan attached to Appendix 1 of the LMA contained maximum heights reflecting this version of the Balfours Policy Area Concept Plan.  In particular, the Concept Plan provided maximum heights of 25 metres (with a setback height of 18 metres) for the buildings fronting Franklin Street, and hence including the Stage 2 development on the Land; a maximum building height of 31 metres (with a setback height of 21 metres) for the buildings fronting Elizabeth Street; and a maximum height of 58 metres for buildings in the central area.

34. A further Development Plan, originally approved for interim operation, was gazetted on 28 March 2012.  The final version of that plan, the 2012 Development Plan referred to above, was gazetted on 25 October 2012.  It deleted the Balfours Policy Area Concept Plan, and instead provided for a standardised 53 metre maximum building height across the whole of the Balfours site.[8]  A substantial portion of the Capital City Zone included the same 53 metre maximum building height.  A concept plan that identified different building heights across the whole of the Capital City Zone was included in the 2012 Development Plan.

    [8]     Except for a small part of the site which fell within a surrounding area with a 43 metre maximum building height.

35. There was a consolidation of the Development Plan on 30 April 2020, which applied the same building heights that were applicable under the 2012 Development Plan. 

36. It was thus the building heights under the 2012 Development Plan which were in force as at 17 September 2020, when Zhengtang applied for development plan consent by lodging its DA. Under s 53(2) of the Development Act, the provisions of a Development Plan that are relevant when considering an application for development plan consent are the provisions of the Development Plan in force at the time the application was made.  

    The appeal

37. As mentioned at the outset of these reasons, Zhengtang’s appeal raises issues in relation to both the construction and status of the LMA.

38. As to the former, Grounds 1 to 4 raise various challenges to the ERD Court’s construction of the maximum height provision in the LMA.

39. As to the latter, Zhengtang seeks leave to add two further grounds (Grounds 1A and 1B) in relation to the status of the LMA in light of SCAP’s decision to grant development plan consent. In proposed Ground 1A, Zhengtang contends that the Court below erred in not considering whether, on the proper construction of s 57(12) of the Development Act (repealed), or the equivalent provision in s 192(18) of the PDI Act, the grant of development plan consent overrode the provision of the LMA dealing with the maximum height of the building.  In proposed Ground 1B,  Zhengtang contends that the ERD Court had, and should have exercised, a discretion not to enforce the LMA.  Whilst success on Ground 1A would result in an order for the withdrawal or quashing of the Council’s enforcement notice, Zhengtang accepts that success on Ground 1B could only result in the matter being remitted to the ERD Court for it to consider how its discretion ought to be exercised. 

1. In considering whether to grant Zhengtang leave to add Grounds 1A and 1B, it is significant that these were not matters raised before the ERD Court.  They were first sought to be raised in the course of the appeal to this Court.

2. It is convenient to commence by addressing the construction of the LMA, before turning to consider the proposed grounds of appeal addressing its status.

   Construction of the LMA

3. A land management agreement takes effect as a contract.  As Blue J explained in Zweck v Town of Gawler:[9]

   The legislature chose the mechanism of an agreement as the relevant vehicle rather than another mechanism such as a sui generis instrument created by the section itself.  This may import the requirements for and incidents of an agreement at common law and under statute or it may be that the section represents a code that prescribes the requirements for an agreement to be enforceable.  This is a question that can be left for another day.

   An agreement entered into in compliance with the requirements of the section is enforceable as a contract.[10] By virtue of s 57(5), the agreement is enforceable not only against the original landowner party but also against that party’s successors in title.

   [9]     Zweck v Town of Galwer (2015) 124 SASR 319 at [43]-[44] (Blue J, Kourakis CJ and Nicholson J agreeing).

   [10]   Jolly v District Council of Yankalilla (2006) 143 LGERA 428 at [37] per Perry J (with whom Sulan and Layton JJ agreed).

4. It follows that the relevant terms of the LMA must be interpreted in accordance with the normal principles governing the construction of contracts.  These principles are well settled.[11]  They require an objective approach, focussed upon what a reasonable person would understand by the language in which the parties have expressed their agreement, having regard to not only the text, but also the surrounding circumstances known to the parties, and the purpose and object of the relevant agreement. 

   [11]   See, for example, Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at [40] (the Court); Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at [35] (French CJ, Hayne, Crennan and Kiefel JJ); Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at [46]-[51] (French CJ, Nettle and Gordon JJ); Victoria v Tatts Group Ltd (2016) 90 ALJR 392 at [51] (the Court).

5. As set out earlier in these reasons, cl 3 of the LMA imposed an obligation on the Owner to develop the Land in accordance with the requirements set out in the Development Criteria in Appendix 1 to the LMA.  The Development Criteria relevantly provided:

   The development of the Land must be undertaken in accordance with the annexed concept plan and without limitation must comply with the following:

   …

   (d)    the maximum building heights as outlined on this concept plan and prescribed in the Adelaide (City) Development Plan are achieved within a twenty percent (20%) tolerance noting the setback requirements and different height levels will result in a building that has a podium along Franklin Street;

   …

6. The opening words of the chapeau required that development of the Land be undertaken ‘in accordance with the annexed concept plan’, and then ‘without limitation’ must comply with various further requirements, including the requirement in paragraph (d) that the maximum building heights outlined in the Concept Plan and in the Development Plan be ‘achieved’ within a 20 per cent tolerance.  The annexed Concept Plan provided for a maximum building height of 25 metres; however, the Development Plan in force at the time (the 2012 Development Plan) provided for a maximum building height for the Balfours site, including the Land, of 53 metres.

7. In construing these provisions of the LMA, the ERD Court held that the relevant textual, contextual and purposive indicators all supported a construction of the LMA which limited the height of the proposed development on the Land to 25 metres (with a 20 per cent tolerance).[12]  It is appropriate to summarise the Court’s reasoning in support of this construction, before addressing the challenges to that reasoning made by Zhengtang on appeal.

   [12] Reasons at [42].

   Reasoning of the ERD Court 

8. The Court commenced with an examination of the textual considerations.  The Judge and Commissioner, in their joint reasons, referred to the requirement in the chapeau to the Development Criteria in Appendix 1 that development of the Land be undertaken in accordance with the Concept Plan, which provided for a maximum building height on the Land of 25 metres.[13]  However, they noted that the chapeau then proceeded to add that ‘without limitation’ the development must comply with the matters listed in paragraphs (a) to (e).

   [13] Reasons at [45].

9. Addressing this second aspect of the chapeau, the Court explained that paragraphs (a) to (d) provided confirmation of, and elaboration upon, obligations already imposed upon the Owner.[14]  Pedestrian walkways were depicted on the Concept Plan, but paragraphs (a) and (c) provided further details about those walkways.  The Concept Plan also made reference to ‘undercroft car and bicycle parking’, but paragraph (b) provided further details of that requirement.  Similarly, the Concept Plan included reference to maximum building heights, with paragraph (d) providing additional clarification and detail about building heights.  Paragraph (e) and the paragraph which followed it permitted further requirements to be imposed by the Council, at its discretion and cost, in relation to public art, and landscaping and beautification of the adjacent public realm.

   [14] Reasons at [46].

10. Construing the words ‘without limitation’ in the chapeau in this context, the Court held that they indicated that the specific requirements in paragraphs (a) to (e) were additional requirements, not intended to constrain or limit the general requirement in the opening words of the chapeau, which required that the proposed development comply with the Concept Plan.[15]  The Court considered this to be the natural meaning of the words, but also drew support from Leon Fink Holdings Pty Ltd v Australian Film Commission[16] and Inghams Enterprises Pty Ltd v Hannigan.[17]  It added that the nature of the specific provisions in paragraphs (a) to (e), being confirmatory of, and an elaboration upon, the general requirement, supported this construction.

    [15] Reasons at [47]-[49].

    [16]   Leon Fink Holdings Pty Ltd v Australian Film Commission (1979) 141 CLR 672 at 678-680 (Mason J), 680-681 (Aickin J).

    [17]   Inghams Enterprises Pty Ltd v Hannigan (2020) 379 ALR 196 at [153] (Meagher JA, Gleeson JA agreeing).

11. The Court rejected Zhengtang’s contention that the words ‘without limitation’ indicated an intention that the specific requirements in paragraphs (a) to (e) would not be limited; and that in the case of inconsistency, the specific requirements of those paragraphs were to prevail over the general requirements of the Concept Plan.[18]  The Court reasoned that Zhengtang’s contended construction involved contorting the natural meaning of the words, adding that, in any event, the specific requirements in paragraphs (a) to (e) were not inconsistent with the Concept Plan.

    [18] Reasons at [50]-[51].

12. Turning to the meaning of paragraph (d), the Court described its wording as ‘awkward and poorly expressed’.[19]  It considered that the commencing reference to ‘maximum building heights’ was indicative of a restriction.  It also accepted that the word ‘and’ was conjunctive, and hence indicated a requirement that the development comply with the restrictions inherent in the maximum building heights for both the Concept Plan and the Development Plan.[20]

    [19] Reasons at [52].

    [20] Reasons at [55].

13. Further, the Court rejected Zhengtang’s contention that paragraph (d) imposed an obligation to meet, in the sense of reach, the specified maximum building heights.  The Court explained that the ordinary meaning of ‘maximum’ was some level or value not to be exceeded; that it was not usually interpreted as imposing some positive requirement that a level or value be met.[21]

    [21] Reasons at [53], [57].

14. The Court referred to Zhengtang’s reliance upon the word ‘achieved’ as supporting its contention that the specified heights must be met, in the sense of reached.[22]  Whilst acknowledging that the use of this word was ‘clumsy’, the Court considered that when paragraph (d) was read as a whole, and in the context of the chapeau, compliance with the maximum building heights was ‘achieved’ when the development did not exceed either the maximum in the Concept Plan or the maximum in the Development Plan.  It considered this construction to be consistent with the ordinary use of the word ‘achieved’ as meaning to accomplish, carry out successfully, or attain a desired end.[23]  The Court added that it was difficult to accept, as would be required on Zhengtang’s construction, that the maximum building height in the Concept Plan (25 metres) would be ‘achieved’ if it were exceeded by more than 100 per cent in order to reach the maximum building height in the Development Plan (53 metres).[24]

    [22] Reasons at [54].

    [23] Reasons at [58].

    [24] Reasons at [59].

15. The Court considered that its construction of paragraph (d) accorded with, and was internally consistent with, the requirement in the chapeau that development of the Land be undertaken in accordance with the Concept Plan.  The two requirements (in the chapeau and in paragraph (d)) would be consistent.  Both could be complied with by not exceeding the lower maximum height.  They would not be consistent, however, if the chapeau required that the development not exceed 25 metres, but paragraph (d) permitted (or, indeed, required) that it reach a height of 53 metres.[25]

    [25] Reasons at [61].

16. The Court rejected the suggestion that the reference to a 20 per cent tolerance worked an absurdity under its construction.  It explained that the maximum building height in the Concept Plan could be varied by any percentage.  Further, the 2012 Development Plan did not include any provision that required that a building which exceeded a maximum building height be declared non-complying.  A development that exceeded the maximum building height in the Development Plan might nevertheless be approved.[26]

    [26] Reasons at [62].

17. The Court also rejected the suggestion that requiring compliance with two maximum building heights gave rise to any inconsistency or absurdity. The Development Criteria simply imposed two different standards, and required that the development comply with both. The Court added that it was to be expected that the Development Plan would change from time to time, and that s 57(2a) of the Development Act required that the Council take into account the Development Plan when deciding to enter into a land management agreement and agreeing its terms. This provided a logical reason for the inclusion of the reference to the Development Plan in paragraph (d).[27]

    [27] Reasons at [64].

18. Zhengtang argued that the Development Criteria, when read as a whole, provided a series of positive obligations, and that this supported a construction of paragraph (d) that required that the development achieve a building height of 53 metres. The Court disagreed.[28] It did not accept that the balance of the Development Criteria were expressed in such positive and absolute terms as to affect the construction of paragraph (d).  The Court explained that the words ‘must comply’ which introduced the various requirements did not necessarily connote a positive obligation, as opposed to a negative restriction.  It referred to paragraphs (a) to (c) as merely explaining, or elaborating upon, existing obligations; and (e) as involving a discretion on the part of the Council without necessarily imposing any positive obligation.

    [28] Reasons at [65]-[66].

19. The Court also rejected Zhengtang’s submission to the effect that the reference to ‘heights’ somehow supported a construction of paragraph (d) which imposed a positive obligation to meet, in the sense of reach, the specified heights.[29]

    [29] Reasons at [67]-[68].

20. The Court concluded its consideration of the textual considerations by reiterating that paragraph (d) referred to two (maximum) heights, but did not mandate that the building on the Land be built to those heights.  Compliance with both the Concept Plan and Development Plan would be achieved if the proposed development did not exceed the lower of the maximum heights specified in the two plans; that is, if the proposed development did not exceed the maximum height of 25 metres specified in the Concept Plan, with a tolerance of 20 per cent.[30]

    [30] Reasons at [69].

21. Turning to the purpose of the LMA,[31] the Court reasoned that it was clear from the text of the LMA as a whole that its objective purpose was to give the Council a degree of control over the proposed development beyond that provided by the planning scheme, including the Development Plan. That control was exercisable by requiring that the proposed development be undertaken in accordance with the Concept Plan.  This purpose was said to be evident from the Owner’s obligations in cl 3 of the LMA, and its requirement that the Land be developed in accordance with the Development Criteria.  And it was consistent with Zhengtang being restricted in how it may develop the Land.

    [31] Reasons at [70]-[71].

22. The Court also considered that there were various contextual indications that supported its construction of the maximum height provision of the LMA.

23. The first was that the provision was part of an LMA that operated as a restriction on the way the Land was to be developed, and took into account the way in which other buildings that formed part of the Balfours site development had been, or were to be, constructed.[32]

    [32] Reasons at [72].

24. The second was that the Concept Plan and LMA, by reason of their registration, provided some assurance for owners of apartments in the other buildings on the Balfours site development as to how the Land would be developed, and hence how it might impact their property.  This included assurance as to the height of the building on the Land, with the Concept Plan providing for buildings in the centre of the Balfours site being higher than the buildings on the perimeter of that site.[33]

    [33] Reasons at [73].

25. The third was that Zhengtang and the Council, as the parties to the LMA, incorporated the Concept Plan into their agreement. The Concept Plan was substantially the same as the concept plan that was part of the 2006 Development Plan, even though, by the date the parties entered into the LMA, the 2012 Development Plan had amended the maximum building heights across the Balfours site to a near uniform 53 metres.  The Court accepted that the inclusion of the concept plan from the 2006 Development Plan within the LMA indicated an objective of restricting development, rather than allowing development to occur in accordance with the near uniform 53 metres permitted under the 2012 Development Plan.[34]

    [34] Reasons at [74]-[75].

26. The Court rejected Zhengtang’s argument to the effect that its construction of paragraph (d) was supported by the parties’ knowledge, at the time they entered into the LMA, that the Development Plan then in force (that is, the 2012 Development Plan) provided for a maximum building height of 53 metres.[35]  In circumstances where paragraph (d) made explicit reference to the maximum building height under the Concept Plan (25 metres), it could not be said that this knowledge supported an objective intention to permit construction up to 53 metres.

    [35] Reasons at [76].

27. Following this consideration of the various textual, contextual and purposive indicators, the Court concluded that, on its proper construction, the LMA restricted the height of any development on the Land to a maximum height of 25 metres (within a 20 per cent tolerance). It followed that Zhengtang’s proposed construction of a building on the Land with a height of 53 metres would contravene the LMA.  As the construction issue was the only challenge made to the Council’s enforcement notice, it also followed that Zhengtang’s appeal challenging that notice failed.

    Submissions before this Court

28. The submissions made by Zhengtang before this Court on the construction issue were essentially the same as those it made before the ERD Court. In particular, Zhengtang argued that the Court below erred in not accepting its construction of paragraph (d) of the Development Criteria as providing for building heights which were in the nature of targets to be met, with the result that its proposal to construct a building with a height of 53 metres was consistent with the LMA.  In making this argument, Zhengtang emphasised the reference in the chapeau of the Development Criteria in Appendix 1 of the LMA to the words ‘without limitation’; the reference in paragraph (d) of the Development Criteria to the maximum building heights being ‘achieved’; and the parties’ knowledge at the time of entry into the LMA that the 2012 Development Plan provided for a maximum height of 53 metres across most of the Balfours site, including the Land.

29. For the reasons which follow, which essentially reflect those given by the ERD Court, none of these arguments are persuasive.

    Consideration

30. Starting with the words in paragraph (d) of the Development Criteria, the ordinary meaning of ‘maximum’ is some level or value not to be exceeded, and the ordinary meaning of a requirement to comply with a maximum height is to require that it not be exceeded.  It is difficult to see how a requirement to comply with a maximum building height requirement could be understood as providing some kind of target height, or as creating some positive obligation to build to that height. 

31. In our view, a consideration of the broader textual, contextual and purposive considerations tends to support this construction of paragraph (d) as a restriction upon height, rather than as creating some permission, or indeed positive obligation, to build up to a specified height. 

32. While paragraph (d) provides for two maximum building heights (the 25 metres in the Concept Plan, and the 53 metres in the Development Plan), a construction which requires that the proposed building not exceed the lower of the two maximum heights is consistent with the ordinary meaning of each maximum height as a height not to be exceeded.  It enables compliance with both the general obligation in the chapeau to comply with the Concept Plan and the two maximum heights specified in paragraph (d). 

33. Although it might be said that, on the Council’s construction, the higher maximum in the Development Plan is redundant, it must be remembered that it was to be expected that the Development Plan might change from time to time.  Even if unlikely, it was possible that the maximum building height for the Land might be reduced under a future Development Plan.[36]  In any event, including a requirement for compliance with the maximum building height specified in the Development Plan was consistent with the Council’s obligation in s 57(2a) to have regard to the Development Plan when considering whether to enter into, and the terms of, any land management agreement.

    [36]   Noting that in 2005 the maximum building height for the Land had been 14 metres, and then 21 metres.

34. On the other hand, if Zhengtang’s construction were adopted, with the reference to a maximum building height construed as a target height, or height to be met, then the net effect would be to require that the building be 53 metres in height.  Permitting (let alone requiring) a building with a height of 53 metres would be to ignore the reference to 25 metres in the Concept Plan, and to render meaningless the reference to a 20 per cent tolerance.  Indeed, it would be to treat it as more akin to a minimum height.  If an equivalent approach were taken to the 53 metres in the Development Plan, then there would be no meaningful limit on building height at all in paragraph (d).  Whilst a development on the Land with a building far exceeding 53 metres in height may well be refused planning consent, a construction of paragraph (d) which places no direct limit upon the building height for the Land seems an unlikely intention to attribute to the parties. 

1. We accept that the word ‘achieved’ may, in some contexts, connote an obligation to reach some level or value.  But when used in combination with a reference to a maximum level or value, we do not think it conveys this meaning.  In this context, ‘achieved’ can quite naturally be understood to mean accomplishing, or being successful in attaining, a desired end.  Put another way, there is no difficulty in understanding an obligation to achieve compliance with a maximum building height as an obligation to ensure that the requirement is successfully met, in the sense of being observed or adhered to.

2. Nor do the words ‘without limitation’ in the chapeau provide any support for Zhengtang’s construction.  As the Court below explained, those words naturally convey that the requirements which follow in paragraphs (a) to (e) are in addition to, rather than in limitation of, the preceding general obligation to comply with the requirements of the Concept Plan.  This fits naturally with the content of the requirements which follow, which it may be accepted are more specific, but essentially confirm and elaborate upon, the requirements under the Concept Plan. 

3. In contending for a different construction of the words ‘without limitation’, Zhengtang emphasises that they appear after the word ‘and’.  From this, Zhengtang argues that it is the specific requirements which follow that apply without limitation, rather than the general requirement to comply with the Concept Plan.  Zhengtang further argues that this construction is supported by the maxim generalia specialibus non derogant, with the general requirement in the chapeau not to limit, or derogate from, the specific requirements in the paragraphs that follow.  In our view, this involves a strained construction of the words ‘without limitation’, particularly having regard to the nature of the requirements set out in paragraphs (a) to (e).  As requirements which are generally confirmatory of, and an elaboration upon, the general requirements of the Concept Plan, the more natural construction is that these specific requirements apply without limiting the general requirement.

4. Zhengtang points to the parties’ knowledge at the time they entered into the LMA that the maximum building height for the Land under the Development Plan was 53 metres; and their likely expectation that this would, if anything, continue to increase over time.  It was suggested that this supports an objective intention, and construction of the LMA, which permitted building up to this height. 

5. We do not find this submission persuasive. If this had been the parties’ intention, then that could have been made plain; and there would have been no need to refer to the maximum height in the Concept Plan. Instead, a reasonable person would understand from the inclusion of the reference in the Development Criteria to the maximum building height in the Concept Plan that this would have some work to do and, indeed, that it imposed a restriction upon the height of any proposed building on the Land. This would be consistent with the LMA reflecting an intention by the Council, with the agreement of Zhengtang, to impose a restriction upon the development on the Land over and above what otherwise existed under the Development Plan in force at the time; and hence consistent with the apparent rationale for this LMA,[37] and indeed LMAs in general.[38]

   [37]   See, for example, cl 3 of the LMA.

   [38]   Zweck v Town of Gawler (2015) 124 SASR 319 at [89] (Blue J).

6. In summary, we are satisfied that the natural ordinary meaning of the terms used in the LMA indicates that the parties agreed to a maximum building height of 25 metres (with a 20 per cent tolerance) for the Land.  A reasonable person would understand paragraph (d) of the Development Criteria in this way.  There is no ambiguity in the terms of the LMA. 

7. No error has been identified in the ERD Court’s construction of the maximum height provision of the LMA.  The grounds of appeal challenging this construction have not been made out. 

8. Zhengtang’s proposed development of the Land would contravene the LMA, and thus provided a proper basis for the Council’s enforcement notice.  It is thus necessary to consider Zhengtang’s proposed challenge to the enforcement notice on the bases either that the LMA was overridden by the Development Plan consent provided by SCAP, or that the ERD Court had a discretion not to enforce the LMA.

   Resolving inconsistency between an LMA and a development authorisation

9. As mentioned at the outset of these reasons, Zhengtang seeks leave to amend its grounds of appeal to rely upon two additional grounds, not raised before the ERD Court, namely: (i) that the Council’s enforcement notice should have been set aside on the basis that the maximum height provision in the LMA was overridden by the grant of planning consent in Zhengtang’s favour (Ground 1A); or, in the alternative, (ii) that the ERD Court had, and ought to have exercised, a discretion not to enforce the LMA (Ground 1B).

10. It is convenient to commence by addressing the merit of these grounds before returning to the question of whether Zhengtang should be granted leave to rely upon them.

11. Broadly speaking, both grounds concern the correct approach to be taken when there is an inconsistency between an LMA and a later grant of development authorisation under the Development Act, or the PDI Act.  They address two possibilities in the event of inconsistency: first, that the development authorisation operates to invalidate or override the LMA to the extent of the inconsistency; and secondly, that in proceedings to enforce the LMA, the ERD Court may, in the exercise of its discretion, determine not to enforce an LMA to the extent of the inconsistency.

12. Both of these possibilities were raised in some obiter observations by Blue J in Zweck v Town of Gawler.[39]  In that case, the appellant’s land was subject to an LMA between the appellant and respondent council which included provisions prohibiting any division, or application for division, of the land.  The appellant applied to the council for development approval to divide the land.  The primary issues on appeal related to the validity of the LMA, and the ERD Court’s jurisdiction to entertain a challenge to its validity. No inconsistency had crystallised because there was no grant of development approval.  However, in the course of his reasons, Blue J addressed the potential for inconsistency between an LMA and a development approval or authorisation.

    [39]   Zweck v Town of Gawler (2015) 124 SASR 319.

13. His Honour commenced the relevant section of his reasons by referring to s 57(2a) of the Development Act (which requires that the Minister or a council have regard to the provisions of the appropriate Development Plan when entering into an LMA), and s 57(12) of that Act (which requires that an LMA be taken into account when assessing an application for development authorisation). His Honour added that ‘[t]he evident purpose of s 57 is to enable the Minister or a council to constrain future development by entering into a voluntary agreement with the landowner to that effect.’[40]

    [40]   Zweck v Town of Gawler (2015) 124 SASR 319 at [89] (Blue J).

14. In addressing a submission to the effect that it would be contrary to the overall scheme and objects of the Development Act that a council could preclude future development on land in perpetuity regardless of the changing provisions of the relevant Development Plan and changing circumstances more generally, Blue J did not accept that LMAs would operate in this way.  In contemplating two possibilities for resolving inconsistency which might result in the terms of an LMA yielding to a subsequent development authorisation, his Honour explained:[41]

    This contention fails to have regard to the existence and effect of subsection 57(12). That subsection proceeds on the basis that the mere fact that a land management agreement precludes the landowner from undertaking a particular development is not an absolute barrier to the grant of development authorisation for that development. It is a factor required by the relevant authority to be taken into account but is not decisive. This reflects a balance struck by the legislature between freedom to contract between councils and landowners concerning land use on the one hand and the interests of the community that there not be an absolute clog in perpetuity on land use on the other hand.

    On an application for development authorisation for a land use precluded by a land management agreement, the relevant authority is required to weigh the existence and effect of the land management agreement against other factors impacting the desirability of the grant of development approval. In particular, a relevant authority would take into account changes in circumstances since the entry into the land management agreement including any change in the underlying rationale for the preclusion contained in it and any change in the relevant Development Plan.

    If development authorisation is granted notwithstanding a provision of a land management agreement precluding that development, the consequence depends on the proper construction of section 57. It may well be a necessary implication of s 57(12) that the grant of development authorisation overrides the provision of the land management agreement pro tanto while the provision continues to have future operation in respect of any other development to which it applies.[42] Alternatively, it may be the statutory intention that the conflict between the development authorisation and land management agreement is to be resolved on an application to the Environment Court under s 85 for enforcement of the land management agreement in which event the Council concedes the Environment Court would have a discretion to be exercised judicially not to enforce the land management agreement because of the existence of the development authorisation. It is not necessary for the disposition of this appeal to determine whether on its proper construction the Act provides for the former or the latter. In either event there is a mechanism to resolve a potential conflict between a land management agreement and a subsequent development authorisation and a land management agreement will not be a permanent clog on development regardless of future circumstances.

    [41]   Zweck v Town of Gawler (2015) 124 SASR 319 at [90]-[92] (Blue J).

    [42] In other words, the conflict between the development authorisation and the land management agreement is to be resolved in the same manner as a conflict between Commonwealth and State legislation under section 109 of the Constitution.

15. In other words, Blue J contemplated two possibilities for resolving any inconsistency between an LMA and a later development authorisation, being the possibilities reflected in Zhengtang’s two additional grounds of appeal.

16. In the initial oral hearing of the appeal in this matter, the parties both made submissions in relation to the two possibilities for resolving inconsistency contemplated by Blue J.  However, it is fair to say that the parties did not address the matter in great detail and, in particular, did not provide the Court with much assistance in relation to the broader legislative and planning context and background which might inform the Court’s determination of how such inconsistencies might be resolved.  Subsequent to that hearing, the Court invited the Attorney-General to intervene in order to address these matters.  The Attorney-General took up this invitation, and was granted leave to intervene.  The Court then received an additional round of written and oral submissions from the parties and the Attorney-General.

17. The Attorney-General did not make any submissions in relation to the outcome of the appeal.  He was careful to confine his submissions to the existence and nature of the mechanisms for resolving inconsistency contemplated by the proposed additional grounds of appeal.  His submissions were to the effect that, properly construed, the Development Act and the PDI Act do not operate to permit a development approval to automatically invalidate or override an LMA to the extent of any inconsistency with a subsequent development authorisation; however, they do confer a discretion upon the ERD Court to decline to enforce an LMA to the extent of any such inconsistency.

18. In its submissions, Zhengtang maintained its support for the first of these mechanisms for resolving inconsistency, but also supported the second mechanism, and adopted and supported the Attorney-General’s submissions in favour of that mechanism.  The Council formally opposed the existence of both mechanisms, but contended that even if the Court were to be persuaded that one of these mechanisms existed, it should not grant Zhengtang permission to amend its grounds of appeal to rely upon it.

    The statutory and planning context

19. Determination of the existence and nature of any mechanism for resolving inconsistency between an LMA and a later development authorisation involves construing the relevant provisions of the Development Act and the PDI Act. 

20. As Blue J explained in Zweck v Town of Gawler, the issue is one that focusses upon the proper construction of s 57 of the Development Act, and in particular any implication that might be drawn from the terms of s 57(12) of that Act. Since the introduction of the PDI Act, the focus is upon the equivalent provisions in s 192 of the PDI Act, noting that s 192(18) of that Act is in the same terms as s 57(12) of the Development Act.  Like any issue involving the construction of legislation, it must be considered having regard to the text, context and purpose of the relevant legislative provisions.

21. The key provisions from the Development Act, and PDI Act have been set out earlier in these reasons.  However, it is appropriate to mention some broader context, and to identify the legislative link between LMAs and a planning authorisation (having regard to the relevant Development Plan or the Code), before returning to the issue of what implication, if any, may be discerned from the legislation as to the resolution of any inconsistency between an LMA and a planning authorisation.

22. When the Development Act commenced operation in 1994, s 57 relevantly provided that the Minister or a council may enter into an LMA ‘relating to the management, preservation or conservation of land with the owner of the land’. Further, s 57(12) provided that an existing LMA may be taken into account when assessing an application for development authorisation. There was thus a statutory connection, or link, between a pre-existing LMA and a subsequent application for development authorisation from the commencement of this legislation.

23. In 2001, s 57 was amended to include ‘development’ as an additional matter to which an LMA may relate.[43]  At the same time, s 57(2a) was introduced.  As set out earlier in these reasons, this subsection provided that the Minister or council must, when entering into an LMA ‘which relates to the development of land’,[44] or when considering the terms of such an LMA, have regard to the appropriate Development Plan, and to any relevant development authorisation. These amendments reinforced the link between LMAs relating to the development of land, and the relevant planning policy in effect at the time of their creation.

    [43]   Development (System Improvement Program) Amendment Act 2000 (SA), ss 24(a) and (b).

    [44]   That is, it applies to LMAs which relate to the development of land, and not those relating to the management, preservation or conservation of land.

24. Section 57A was inserted into the Development Act in 2005.[45]  It relevantly provided that a designated authority[46] may enter into an LMA with a person who is applying for development authorisation under the Act relating to ‘any matter that the person applying for the development authorisation and the designated authority agree is relevant to the proposed development (including a matter that is not necessarily relevant to the assessment of the development under this Act).’[47] It also provided, in s 57A(3), that the parties proposing to enter into an LMA must have regard to the provisions of the appropriate Development Plan. In other words, it included a link between an LMA entered into under s 57A and the relevant planning policy which was equivalent to the link contained in s 57(2a) for LMAs entered into under s 57. However, s 57A did not include an equivalent of s 57(12).

    [45]   Development (Miscellaneous) Amendment Act 2005 (SA).

    [46] Defined in s 57A(21) to include the Minister or a council.

    [47]   Development Act, s 57A(2).

25. Turning to the relevant provisions of the PDI Act, as set out earlier, s 192 of the PDI Act is in equivalent terms to s 57 of the Development Act. In particular, ss 192(1) and (18) of the PDI Act are in relevantly identical terms to ss 57(1), (2) and (12) of the Development Act; and save for the references to the Code instead of a Development Plan, s 192(4) of the PDI Act is in relevantly identical terms to s 57(2a). Further, s 193 of the PDI Act is in substantially similar terms to s 57A of the Development Act.

26. Under both the Development Act and the PDI Act, an LMA is enforceable as a contract, and must be registered in accordance with the applicable regulations.[48]  An LMA has no force and effect until it is noted against the relevant instrument of title, but is then enforceable against any successors in title.[49]

    [48]   Development Act, s 57(2b); PDI Act, s 192(5).

    [49]   Development Act, ss 57(5), (6); PDI Act, ss 192(12), (13).

27. As the Attorney-General pointed out in his submissions, the schemes for development assessment under the Development Act and PDI Act, whilst very similar, do differ in one potentially relevant respect.  Under the Development Act, a council was a relevant authority for development authorisation purposes[50] (but was required to delegate this decision to its assessment panel or staff).[51]  This is no longer the position under the PDI Act.  Under the regime provided for in that Act, a council’s Assessment Manager or relevant Assessment Panel are designated authorities for development authorisation purposes (among other relevant authorities).[52]

    [50]   Development Act, s 34(1)(a).

    [51]   Development Act, s 34(23)-(27).

    [52]   PDI Act, ss 82-87.

28. As a result of this change, a council will no longer be both a party to an LMA and the relevant authority responsible for determining whether to grant planning consent or development authorisation.  This may be contrasted with the previous position, under the Development Act, where a council was often, although not always, both a party to any relevant LMA, and the relevant authority for the purposes of granting planning consent.  Accordingly, in most cases under the PDI Act there no longer exists the likelihood of ‘symmetry’ in decision-making between a signatory to any relevant LMA and the relevant authority responsible for the purposes of granting planning consent.

29. This abandonment of the usual symmetry in decision-making tends to highlight the importance of a mechanism for resolving inconsistency between an LMA and a planning authorisation.  Under the Development Act, when it was often the case that a council was both a party to the LMA and the relevant authority assessing a subsequent application for planning consent, the landowner might reasonably have expected that a council granting development authorisation to an application that was inconsistent with an LMA[53] would also agree to waive the LMA to the extent of the inconsistency.  However, under the PDI Act, there may no longer be the same expectation that the LMA will be waived in the event of inconsistency. 

    [53] Having taken that LMA into account when assessing the development application under s 57(12) of the Development Act.

30. Indeed, that is what occurred here. The relevant authority for planning consent was the State Planning Commission (via its delegate, the State Commission Assessment Panel), whereas the party to the LMA was the Council.  While the relevant authority assessing planning consent was required to take the LMA into account, any expectation of symmetry, or consistency, in decision-making was not available.

    A mechanism for resolving inconsistency

1. Neither the Development Act nor the PDI Act expressly address a situation involving inconsistency between an LMA and a subsequent grant of development authorisation.

2. There are several features of the legislative schemes which tend against a construction that would have a development authorisation automatically override an inconsistent provision within an LMA, but which nevertheless leave room for a construction which would permit the ERD Court to exercise a discretion not to enforce such a provision.

3. The first is that, had Parliament intended that a development authorisation automatically override an LMA to the extent of any inconsistency, then one might have expected Parliament to say so expressly, and in plain terms.

4. Secondly, it is to be acknowledged that the legislative schemes, by making the provisions of the relevant Development Plan or Code a relevant consideration when entering into an LMA,[54] and by making the existence of an LMA a relevant consideration when assessing an application for development authorisation,[55] establish a link between an LMA and the development authorisation.  However, it is significant that the former only applies to LMAs which relate to the ‘development’ of land, and does not apply to LMAs which relate to the management, preservation or conservation of land. It would be an odd consequence were the legislative schemes in the Development Act and PDI Act to be construed as causing a development authorisation to automatically override any LMA, when it does not even require consideration of the Development Plan or Code when entering into some of those LMAs (that is, LMAs relating to the management, preservation or conservation of land, rather than the development of land).

   [54]   Development Act, s 57(2a); PDI Act, s 192(4).

   [55]   Development Act, s 57(12); PDI Act, s 192(18).

5. It is also significant that these statutory links between LMAs and any development authorisation (and hence the planning policy, including Development Plan or Code, against which a development application is assessed) are expressed in non-mandatory terms; that is, in terms which require consideration of any inconsistency, but which contemplate the possibility that an LMA might be entered into, or a development authorisation given, despite the existence of such inconsistency.[56]  Expressed in this way, the statutory links suggest a more subtle or nuanced relationship between an LMA and a subsequent development authorisation, rather than a relationship in which the latter automatically overrides the former to the extent of any inconsistency.

   [56]   Zweck v Town of Gawler (2015) 124 SASR 319 at [86]-[88] (Blue J).

6. Following on from this, the evident purpose of the legislative recognition of LMAs in s 57 of the Development Act and s 192 of the PDI Act is to enable the Minister or a council to constrain future development by entering into a voluntary agreement with the landowner to that effect.[57]  It is to be expected that this might extend to constraints which are additional to, or differ from, those that exist under the planning policy (reflected in the relevant Development Plan or Code).  If an LMA were to be automatically overridden by any development authorisation based upon the planning policy in a Development Plan or Code, then this would significantly undermine the intended operation of LMAs. As explained above, there is a particular risk of this occurring under the PDI Act given that the relevant authority for determining development authorisation will not be a party to the relevant LMA.

   [57]   Zweck v Town of Gawler (2015) 124 SASR 319 at [89] (Blue J).

7. In addition to the above, it is significant that the relevant Development Plan or Code may be amended without the agreement of the parties to an LMA.  This may lead to inconsistencies with the LMA which were not present at the time of its creation.  This may in turn result in the favourable assessment of a subsequent development application against the Development Plan or Code.  The role and purpose of an LMA would be significantly undermined if it could be automatically overridden by a decision of a non-party to grant development authorisation in the above circumstances.  Not only would the contractual expectations of the parties to the LMA be disappointed, but also the ability of third parties to obtain assurance from the terms of an LMA noted on the title to the relevant land would be compromised.

8. The Attorney-General also referred the Court to provisions of the Development Act and PDI Act which expressly contemplate that an LMA may be amended or rescinded, and which prescribe the obligations of the Registrar-General in that event. In particular, under s 57(8) of the Development Act, the Registrar-General must, if satisfied on the application of the Minister, the council or the owner of land that an LMA has been rescinded or amended, enter a note of the rescission or amendment against the instrument of title, or against the land. Section 192(15) of the PDI Act is in equivalent terms.  The Attorney-General also noted that an LMA may itself include a mechanism for variation, waiver or the like.  The Attorney-General contends that the existence of these mechanisms for bringing the operation of an LMA (or some of its provisions) to an end, speaks against a subsequent grant of development authorisation automatically overriding an LMA to the extent of any inconsistency.  Whilst perhaps not a matter of great significance, this is a further matter tending against a construction with that consequence.

9. In summary, having regard to the above features of the legislative schemes, we do not consider that the Development Act or PDI Act should be construed as giving rise to any implication that a development authorisation operates automatically to override an LMA to the extent of any inconsistency.  There is no clear textual basis for this construction.  Further, whilst the schemes recognise the link or connection between the provisions of an LMA and the planning policy reflected in the relevant Development Plan or the Code, and may be taken to contemplate some mechanism for resolving inconsistency with a development authorisation against these instruments, the automatic overriding of an LMA to the extent of any inconsistency with a development authorisation does not sit comfortably with the nature and purpose of LMAs.  It is too blunt a solution.  For that reason, we would reject the construction contended for by Zhengtang in its first additional ground of appeal.

10. However, we consider that there is merit in the construction contended for in Zhengtang’s second additional ground of appeal. Construing the relevant provisions of the Development Act and the PDI Act as recognising a discretion on the part of the ERD Court to not enforce a provision or provisions of an LMA in the event of its inconsistency with a subsequent development authorisation would, in our view, enable the resolution of any inconsistency in a manner that is consistent with the nature and purpose of LMAs, and the planning regimes provided for in those Acts.

11. To elaborate, the existence of the express statutory links which we have described (between the terms of an LMA and a subsequent application for planning consent) provides a sufficient basis for the ERD Court to determine, in an appropriate case, that an action to enforce an LMA which is inconsistent with a subsequent grant of authorisation should not succeed. 

12. Whilst the existence of an inconsistency would be a relevant consideration, whether it is ultimately appropriate to enforce the relevant LMA will depend upon the circumstances of the particular case.  Significant among these circumstances will be the apparent rationale for entry into an LMA.  It is reasonable to expect that this rationale will often be able to be ascertained from a consideration of the terms of an LMA, particularly its recitals.

13. In order to illustrate the potential significance of the rationale for an LMA in resolving an inconsistency with a later development authorisation, the Attorney-General hypothesised two LMAs.  He hypothesised that both of these LMAs operated to prohibit sub-division of a parcel of land (as was the situation in Zweck v Town of Gawler).  In the case of the first hypothetical LMA, the rationale for the prohibition of further division was a lack of infrastructure to service any further division of the land.  In the case of the second, the rationale related to the unique circumstances of the land, such as its particular historical or environmental significance to the State.  The subsequent connection or improvement of infrastructure to the land would be a consideration which would be relevant to (and tend to undermine) the rationale for the first LMA, and hence may support a decision not to enforce the LMA to the extent of the inconsistency.  An attempt to enforce this LMA by the relevant Council may be seen as inconsistent with the rationale for its existence.  However, the same change in circumstance would not be relevant to the rationale for the second LMA and so may not provide any basis for declining to enforce that LMA.

14. Whilst a decision not to permit enforcement of an LMA would, on the face of it, be inconsistent with the binding contractual nature of an LMA, it is to be remembered that LMAs are a creature of statute, and in particular a creature of the planning regimes established under the Development Act and PDI Act.  The existence of a mechanism for the resolution of inconsistency which may permit primacy of the planning policy underpinning the relevant Development Plan or Code would, in our view, be consistent with the promotion and facilitation of development, and the consistency and certainty in planning outcomes, sought to be achieved by the planning regimes enacted through the Development Act and PDI Act. 

15. Further, unlike a construction which would permit an LMA (or part of it) to be automatically overridden without any necessary involvement by the parties to the LMA, permitting an inconsistency to be addressed through a discretion on the part of the ERD Court in enforcement proceedings would be more consistent with the contractual nature of an LMA.  It would involve the inconsistency being addressed in court proceedings in which the parties to, and affected by, the LMA could be heard.  The provisions of an inconsistent LMA may in some cases prevail, but in other cases yield to the planning policy reflected in a development authorisation.

16. Whilst the ERD Court might be slow to decline to enforce the provisions of an LMA, one can well imagine circumstances where that would seem to be an appropriate course that would be consistent with the overall purposes of the Development Act or PDI Act, and be an appropriate mechanism for avoiding an LMA becoming ‘a permanent clog on development regardless of future circumstances’.[58]

    [58]   Zweck v Town of Gawler (2015) 124 SASR 319 at [92] (Blue J).

17. For these reasons, we consider there is merit in the second of Zhengtang’s proposed additional grounds of appeal.

    Permission to amend to raise the additional grounds of appeal

18. Zhengtang’s two proposed additional grounds of appeal address matters not raised at first instance.  Before the ERD Court, Zhengtang’s submissions were confined to the construction issue that underpinned its contention to the effect that its proposed development of the Land did not contravene the LMA.  Zhengtang did not advance any alternative submissions to the effect either that its subsequent development authorisation overrode the LMA to the extent of any inconsistency (Ground 1A), or that the ERD Court had, and should exercise, a discretion not to enforce the LMA to the extent of any such inconsistency (Ground 1B).

19. It is necessary to consider whether it is appropriate to give Zhengtang leave to rely upon its proposed additional grounds.  In support of its application for leave, Zhengtang contends that both grounds turn upon questions of law; that they have at least arguable merit; that they are matters which are of significant importance both to the parties and more generally; and that entertaining the grounds will occasion no prejudice to the Council, or at least that any prejudice can be appropriately addressed by orders for costs and, in the case of Ground 1B, confining any relief to an order that the matter be remitted to the ERD Court for it to consider exercising its discretion not to enforce the maximum height provision in the LMA.

20. The Council opposes any grant of leave to rely upon the additional grounds.  It accepts that both grounds raise important and arguable questions of law.  However, it argues that it would suffer prejudice were Zhengtang to be given leave to rely upon the additional grounds.  In particular, the Council argues that had Zhengtang sought to rely upon a discretion not to enforce the LMA before the ERD Court, then it would have led evidence in opposition to the exercise of that discretion.

21. The Attorney-General, quite properly, did not advance any submissions in relation to the application for leave to rely upon the additional grounds.  However, as reflected in our consideration of the merits of these grounds, the Attorney-General’s submissions supported the merit and general importance of the matters sought to be raised.  Indeed, the Attorney-General invited this Court to express its view on the merits of these grounds even if it was not ultimately inclined to grant Zhengtang leave to rely on its additional grounds of appeal.

22. The principles governing leave to rely on grounds of appeal relating to arguments raised for the first time on appeal are well known and not in dispute.  A party is generally bound by the conduct of their case, and will not ordinarily be permitted to raise a new argument on appeal.  That is particularly so where that argument could have been met by calling evidence below.[59]  However, the issue is ultimately one that must be determined by reference to the interests of justice.[60]

    [59]   Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 438 (Latham CJ, Williams and Fullagar JJ); University of Wollongong v Metwally (No 2) (1985) 59 ALJR 481 at 483 (the Court); Water Board v Moustakas (1988) 180 CLR 491 at 497 (Mason CJ, Wilson, Brennan and Dawson JJ).

    [60]   Tohi v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2021) 285 FCR 187 at [13]-[14] (Derrington J), [111] (O’Bryan J, Katzmann J agreeing); MBJY v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2021) 284 FCR 152 at [2] (Allsop CJ).

23. In determining where the interests of justice lie in a particular case, the Court may have regard to a range of considerations.  This may include the nature of the issue sought to be raised, and whether it is confined to a question of law or statutory construction, or whether it is an issue which might have been addressed by evidence or otherwise have affected forensic or strategic decisions made below.  The range of relevant considerations may also include: any explanation for the issue not being raised below (in particular, whether this reflected a considered decision, or mere oversight); the merits and general importance of the issue sought to be raised; and the extent of any prejudice to the respondent or appellant from leave being granted or refused.

24. Returning to the present case, it is unsatisfactory that the matters the subject of Zhengtang’s proposed additional grounds were first raised before this Court.  They are matters which ought to have been raised before the ERD Court.  Whilst Zhengtang might reasonably, but incorrectly, have anticipated that it would succeed on its construction point, it ought to have appreciated the risk that it would not.  It ought also to have appreciated the potential availability of the alternative arguments it now seeks to raise, not least because they were announced as possibilities in the reasons of the Full Court in Zweck v Town of Gawler.[61]

    [61]   Zweck v Town of Gawler (2015) 124 SASR 319 at [90]-[92] (Blue J).

25. It is also unsatisfactory that Zhengtang has not proffered any explanation for its delay in raising its proposed additional grounds.  That said, it seems unlikely that the failure to raise these matters before the ERD Court was the product of any forensic or strategic decision.  It can be assumed it was the result of oversight.

26. Importantly, the proposed additional grounds rely upon questions of law which have merit and are of significant general importance.  We have set out our view of the merits of the proposed grounds.  Both are reasonably arguable, and indeed we have concluded that Ground 1B should succeed.  The general importance of the issues raised to the operation and status of LMAs under both the Development Act and the PDI Act is apparent from our discussion of the merits of the additional grounds.

27. Ground 1A is confined to an issue of law, and would not, in our view, give rise to any prejudice that could not be addressed through the medium of the Court’s discretion as to costs. 

28. Ground 1B is not so confined.  The issue of whether the contended discretion exists is a question of law.  However, the supplementary issue of whether the discretion should have been exercised in Zhengtang’s favour so as to decline to uphold the Council’s attempt to enforce the LMA raises broader issues, and might require hearing evidence.  A resolution of this issue without giving the Council an opportunity to address these broader issues, with the assistance of whatever evidence it might choose to call, would be to inflict prejudice upon the Council.  And it would not be appropriate for this Court to embark upon a contested hearing of the kind necessary to determine whether the discretion not to enforce the LMA should be exercised. 

29. Ordinarily, this potential prejudice to the Council would be sufficient to warrant this Court declining to entertain an issue for the first time on appeal.  However, with some reluctance, we have determined that it is appropriate to permit Zhengtang to rely upon its additional grounds.  In so determining, we are influenced by the general importance of the issues sought to be raised, and our view that there is merit in Ground 1B.  We are also influenced by Zhengtang’s acceptance that, if it were to succeed on Ground 1B, then the appropriate order would be for this Court to allow the appeal, but remit the matter for a further hearing before the ERD Court in order to determine whether it should exercise its discretion to decline to enforce the LMA.  The parties would then be given an opportunity to adduce and test any evidence relevant to that issue before the ERD Court.  Confining the relief granted in this way would substantially address the prejudice to the Council associated with this Court entertaining Ground 1B.  Any remaining prejudice can be adequately addressed through the medium of any costs orders made by this Court and, if appropriate, the ERD Court.

    Disposition of the appeal

30. For the reasons set out, we grant Zhengtang leave to amend its grounds of appeal to include Grounds 1A and 1B.  We allow the appeal on Ground 1B, set aside the orders made by the ERD Court on 17 February 2023, and remit the matter to the ERD Court for further hearing in accordance with these reasons.