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

Zhengtang Precinct Loft Pty Ltd appealed to the Supreme Court of South Australia (Court of Appeal) against a decision of the Environment, Resources and Development Court. The dispute concerned the interpretation of a Land Management Agreement (LMA) entered into between Zhengtang and the Corporation of the City of Adelaide, which governed the development of land owned by Zhengtang. Zhengtang proposed to construct a residential apartment tower of 53 metres in height as part of Stage 2 of a larger development, but the Council contended that this height contravened the LMA.

The primary legal issue before the Court of Appeal was whether the LMA imposed a maximum height restriction on the proposed development that Zhengtang's building would exceed. Specifically, the court had to determine the proper construction of a clause within the LMA that referred to maximum building heights, considering both the ordinary meaning of the words and the broader textual, contextual, and purposive considerations. The court also considered whether to permit Zhengtang to raise two additional grounds of appeal that had not been fully argued in the court below.

The Court of Appeal rejected Zhengtang's primary argument, finding that the LMA clearly imposed a maximum height limit. The court reasoned that the ordinary meaning of "maximum" is a level not to be exceeded, and a requirement to comply with a maximum height signifies a restriction. The court found that interpreting the provision as a target or minimum height would render other references within the clause, such as a 20 per cent tolerance, meaningless and would effectively remove any meaningful limit on building height. The court allowed Zhengtang to raise two additional grounds of appeal, finding merit in one of them, and accordingly allowed the appeal on that ground. The matter was remitted to the ERD Court for it to consider whether to exercise its discretion not to enforce the maximum height provision in the LMA.