Zweck v Town of Gawler - [2015] SASCFC 172

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
ZWECK v TOWN OF GAWLER
[2015] SASCFC 172
Judgment of The Full Court
(The Honourable Chief Justice Kourakis, The Honourable Justice Blue and The Honourable Justice Nicholson)
25 November 2015
ENVIRONMENT AND PLANNING - ENVIRONMENTAL PLANNING - DEVELOPMENT CONTROL - CONTROL OF PARTICULAR MATTERS - SUBDIVISION - PRINCIPLES GOVERNING CONSENT OR APPROVAL - CONSIDERATION OF DEVELOPMENT PLAN
ENVIRONMENT AND PLANNING - ENVIRONMENTAL PLANNING - DEVELOPMENT CONTROL - CONSENTS, APPROVALS AND PERMITS
Appeal against dismissal by Environment Court of appeal against refusal of development plan consent for land division.
The appellant sought development approval to divide 32 hectares of rural land into 3 allotments including two 4 hectare allotments. The land is the subject of a land management agreement under section 57 of the Development Act 1993 (SA) between the Council and the appellant’s predecessors in title which contains clause 2.4 precluding any division of the land or any application for development authorisation to divide the land.
The Development Assessment Panel considered that the application was for a hypothetical development because it was precluded by the land management agreement and declined to consider and determine it.
On the appellant’s appeal to the Environment Court, the Judge held that the Court did not have jurisdiction to entertain a collateral challenge to the validity of clause 2.4 of the land management agreement and in any event a discretion should be exercised against entertaining such a challenge. The Judge held that in any event clause 2.4 of the land management agreement was valid. The Judge held that, while the proposed development was not hypothetical, the Panel rightly declined to consider it because this may have made it complicit in a potential breach of the agreement and arguably of the Development Act.
Held:
1.      The Environment Court had power to determine whether clause 2.4 of the agreement was valid at (at [69] per Blue J (Nicholson J agreeing); [13] per Kourakis CJ).
2.      The Environment Court had no discretion to decline to determine that question (at [74] per Blue J (Nicholson J agreeing); [13] per Kourakis CJ).
3. The first limb of clause 2.4 precluding division related to the “development of land” within the meaning of section 57(2) and was valid (at [94] per Blue J (Kourakis CJ and Nicholson J agreeing)).
4.      The second limb of clause 2.4 preventing lodgement of an application for development authorisation was invalid (at [99] per Blue J (Kourakis CJ and Nicholson J agreeing)).
5.      The proposed development was not hypothetical so as to entitle the Environment Court to decline to consider it (at [106] per Blue J (Nicholson J agreeing); [16] per Kourakis CJ).
6.      Appeal allowed. Application remitted to the Development Assessment Panel for consideration and determination (at [108]) per Blue J (Kourakis CJ and Nicholson J agreeing)).
Development Act 1993 (SA), s4, s32, s35, s57, s86, s88; Environment, Resources and Development Court Act 1993 (SA), s4, s5, s7; Taxation Administration Act 1992 (SA), s92, referred to.
Director of Housing v Sudi (2011) 33 VR 559; Hackney Hotel Pty Ltd v Town of St Peters (1983) 51 LGRA 293; Jacobs v One Steel Manufacturing Pty Ltd (2006) 93 SASR 568; Jolly v District Council of Yankalilla [2006] SASC 53; Minister for Immigration and Multicultural Affairs v Bardwaj (2002) 209 CLR 597; Thorpe v Corporation of the City of Charles Sturt [1999] SASC 10, discussed.
Lakshmanan v City of Norwood (2010) 174 LGERA 428; Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476; PMT Partners Pty Ltd v Australian National Parks and Wildlife Service (1995) 131 ALR 377; Re Dingjan; Ex parte Wagner (1995) 183 CLR 323, considered.

ZWECK v TOWN OF GAWLER
[2015] SASCFC 172
Full Court: Kourakis CJ, Blue and Nicholson JJ

KOURAKIS CJ: I gratefully adopt the relevant facts and the history of the litigation as set out in the judgment of Blue J.
I agree with conclusions and reasons of Blue J as to the validity of the first limb of clause 2.4 of the Land Management Agreement (the LMA) and the invalidity of the second limb.
I would hold that the Environment, Resources and Development Court (the ERD Court) had jurisdiction to determine the validity of clause 2.4 of the LMA for the following reasons.
The relevant authorities which may approve development applications pursuant to s 34 of the Development Act 1993 (SA) (the Act) are administrative bodies and as such have no power or function other than that which is conferred on them. The authority conferred on them by the Act is limited to determining whether or not the development warrants approval when assessed in accordance with ss 33 and 35 of the Act.
Section 39 of the Act stipulates the requirements for a development application. It prescribes its form and the information it may include but there is no reference to the status of the applicant. There is no statutory requirement that the applicant for development approval must be the owner of, or a person holding another interest in, the land or have some other standing for the making of a development application. Section 33 of the Act prescribes the way in which the application must be assessed, again without reference to the status of the applicant. There is no statutory provision for an inquiry into the applicant’s interest in the land or whether or not the applicant is bound contractually or otherwise not to undertake the development. There is no reference to the applicant’s financial capacity to undertake the development. The prospect of the development proceeding is not a relevant matter.
The Act does not confer on relevant authorities an express power to dismiss vexatious applications.
Speaking generally then, a relevant authority must simply proceed to assess the application against the relevant Development Plan or other statutory instrument.
The ERD Court is constituted as a court by s 4 of the Environment, Resources and Development Court Act 1993 (SA) (the ERD Court Act) and is a court of record.[1] It has the jurisdiction conferred on it by that ERD Court Act or any other Act.[2] The relevant conferral of jurisdiction on the Court in this case is that conferred by s 86(1)(a) of the Act, in particular, s 86(1)(a)(i), which provides for an appeal against a refusal to grant an authorisation.
[1] Environment Resources and Development Court Act 1993 (SA) s 5.
[2] Environment Resources and Development Court Act 1993 (SA) s 7.
In exercising its s 86(1)(a) jurisdiction, the Court proceeds on an appeal by way of a re-hearing either:
·on the material before the relevant authority, interfering if it is persuaded that the Court below has made an error of fact or law; or,
·after exercising its judicial discretion, to hear the matter afresh and allow further evidence to be adduced, where it may come to a different conclusion.
The “standing” of a party or the prospects that the development will proceed, not being matters which concern the relevant authority, cannot logically be relevant on a review of that decision.
The ERD Court acts judicially on the hearing of an appeal pursuant to s 86(1)(a) of the Act for the reasons given by Blue J. Were that not so its decisions could, arguably, be impeached in other proceedings, for example, on an enforcement application brought pursuant to s 85 of the Act for undertaking a development without a valid approval.
A conferral of jurisdiction on a court carries with it an obligation to exercise that jurisdiction when it is properly invoked. A court cannot choose not to hear a controversy falling within its jurisdiction. The ERD Court must therefore exercise its jurisdiction to hear an appeal against a refusal to grant an authorisation unless the appeal is an abuse of process. Even though this Court in Hackney Hotel Pty Ltd v Corporation of the Town of St Peters[3] made references to the principle that courts will not give hypothetical opinions in the sense of an opinion on a question which is not the subject of an existing legal controversy that principle is not directly applicable in planning appeals because there will almost always be a justiciable controversy, namely whether the decision of the relevant authority is correct or should be reviewed in the light of further evidence. The hypotheticality principle should, in light of the constitution of the ERD Court as a court, be treated as an example of the power inherent in all courts to prevent abuses of process. That inherent power is well adapted to consider questions of a kind encompassed by the hypotheticality principle.
[3] (1983) 32 SASR 145; (1984) 36 SASR 265.
All courts are necessarily authorised and bound to determine the extent of their jurisdiction. The respondent’s contention that the second limb of clause 2.4 deprived the ERD Court of jurisdiction to hear the appeal necessarily required the ERD Court to determine the validity of that limb. The issue raised by the respondent was not a collateral one. It went directly to the jurisdiction of the ERD Court which the respondent had called into question. The ERD Court was bound to determine it.
Indeed the respondent’s characterisation of the question as one of jurisdiction is, in any event, mistaken. A person may make a legally binding agreement not to litigate but that agreement does not deny the Court which would otherwise have jurisdiction over the subject matter of the controversy its authority to decide it. The ERD Court, acting under s 86(1)(a) of the Act, has no general jurisdiction to enjoin a party from breaching a contractual agreement not to bring such an appeal. Such an injunction can only be sought in a court of general jurisdiction. The better approach is to treat the contention, that the ERD Court was denied jurisdiction by the second limb of clause 2.4, as a contention that the appeal was an abuse of process.
The determination of the validity of the first limb of clause 2.4 was necessary as a step in determining the hypotheticality or abuse of process point and for the purposes of applying s 57(12) of the Act in the assessment of the merits of the development application.
The respondent carried the onus of establishing that the appeal was an abuse of process. It did not satisfy that onus because there was a real controversy between the parties as to whether the development should have been approved. The determination of that controversy was inherently likely to inform any subsequent consideration by the Council of its power to waive reliance on clause 2.4 and the exercise of the discretion which might arise should the Council bring an application to enforce the LMA pursuant to s 85 of the Act. For the same reasons, the application was not hypothetical in the sense that that term was used in Hackney Hotel Pty Ltd v Corporation of the Town of St Peters.
BLUE J:
Peter Zweck appeals against the dismissal by the Environment, Resources and Development Court of his appeal against a decision by the Corporation of the Town of Gawler declining to consider and determine his application for development plan consent for a land division.
Mr Zweck and Jarna Millen own 32.55 hectares of land at Uleybury that is zoned Rural. They applied for development approval to divide the land into two 4 hectare allotments and a residual 24.55 hectare allotment. The land is the subject of a land management agreement under section 57 of the Development Act 1993 (SA) (the Act) by clause 2.4 of which the current owners’ predecessors in title agreed not to divide, or apply for development authorisation to divide, the land.
The Council’s Development Assessment Panel resolved that the development application involved a hypothetical development[4] because it was precluded by the land management agreement and declined to consider and determine the application.
[4] Hackney Hotel Pty Ltd v Town of St Peters (1983) 51 LGRA 243.
Mr Zweck on appeal to the Environment Court contended that clause 2.4 was unenforceable as ultra vires section 57(2) of the Act and the proposed development was not therefore hypothetical. The Council contended that Mr Zweck was collaterally challenging the validity of the land management agreement and the Environment Court had no jurisdiction to entertain such a challenge or in the alternative ought to decline to do so in the exercise of a discretion.
The Judge of the Environment Court held that the Court had no jurisdiction to entertain a challenge to the validity of the land management agreement; alternatively the Court had a discretion to decline to entertain it and should do so; alternatively the land management agreement was valid and the Panel was correct to refuse to deal with the application.
The appeal raises the following issues:
1.Did the Environment Court have jurisdiction or power to determine whether clause 2.4 is ultra vires section 57(2) of the Act?
2.If so, did the Environment Court have a discretion not to determine that question and if so did the Judge properly exercise that discretion?
3.Is clause 2.4 unenforceable as ultra vires section 57(2) of the Act?
4.Did the application relate to a hypothetical development such that the Panel was entitled to decline to consider and determine it or the Environment Court was entitled to decline to determine on appeal the merits?
Background
In 2005, the Tivers owned 62 hectares of land at Uleybury situated within the Corporation of the Town of Gawler (the Council). The land was comprised in eight certificates of title. The land was bordered on the north by a four hectare property owned by the Smiths and another four hectare property owned by the Hilliards.
In December 2005, Noel Tiver lodged with the Council two development applications to redivide the 70 hectares referred to in the previous paragraph (the Gawler land) from 10 allotments to 19 allotments. Mr Tiver also lodged with the City of Playford a development application to redivide land owned by the Tivers to the east of the Gawler land (the Playford land).
The first development application lodged with the Council sought to create a two hectare allotment to be retained by the Smiths (Lot 3), a two hectare allotment to be retained by the Hilliards (Lot 2) and a two hectare allotment to be retained by the Tivers (Lot 1). It sought to create a 31 hectare allotment at the northern end to be owned by the Tivers and to incorporate also the balance of the land owned by the Smiths and Hilliards not retained in Lots 3 and 2 (Lot 7).[5] It sought to create a 32.55 hectare allotment at the southern end owned by the Tivers (Lot 105).
[5] Lot 7 was also to incorporate 11 hectares situated within the City of Playford and therefore totaled 42 hectares altogether.
The second development application lodged with the Council sought to divide Lot 7 into 13 lots generally of approximately 2 hectares each to be the subject of community titles.[6]
[6] A fourteenth lot would comprise the 11 hectares situated within the City of Playford.
Division of land into allotments less than four hectares was a non-complying use. Both development applications were therefore for non-complying developments.
The Tivers’ planning consultant told the Council that, by amalgamating five certificates of title into Lot 105, the proposed division would “deliver an opportunity for the vast majority of the arable land to continue to be used for the traditional broad acre agricultural purposes of cropping and grazing”.
In June 2006, it was agreed between the Tivers and the Council that the Council would approve the development applications in return for the Tivers entering into a land management agreement under section 57 of the Act agreeing amongst other things not to divide Lot 105 in future.
In October 2006, the Tivers and the Council entered into a land management agreement (the Agreement). The Smiths, the Hilliards and the City of Playford were also parties but their rights and obligations are not relevant.
Clause 2.4 of the Agreement provided:
The Owner shall not cause suffer or permit the division of that portion of the Land described as Allotment 105 in the Plan Of Division, (Annexure “A”) nor cause suffer or permit the making of any application seeking the division of the said allotment.
Clause 5.1 provided that the Agreement could be varied but only by supplementary deed signed by the Council and the Owner. Clause 5.2 provided that the Council could waive compliance by the Owner but only by writing signed by the Council. Clause 10.1 provided that, if any provision is found to be invalid, it is to be severed.
In October 2006, the Council granted development approval in respect of both development applications.
In 2006, the Tivers contracted to sell Lot 105 (the Land) to Mr Zweck and Ms Millen. In July 2007 a new certificate of title was issued showing Mr Zweck and Ms Millen as the registered proprietors of the Land and containing an endorsement noting the Agreement against the title.
In March 2013, Mr Zweck lodged with the Council a development application (490/D011/13) to divide the Land into three allotments comprising two lots each of four hectares and a residual lot of 24.55 hectares (the Development Application).
In August 2013, Mr Zweck and Ms Millen wrote to the Council requesting that the Council agree to vary clause 2.4 of the Agreement to permit the proposed division. In September 2013, the Council members resolved not to agree to the requested variation.
In September 2014, the Council’s Development Assessment Panel considered the Development Application. The Panel resolved:
1. That development application 490/D011/13 involves a hypothetical development, there being no reasonable prospect that a development approval, if granted, could be implemented;
2. To decline to consider and determine the application.
In September 2014, the Council wrote to Mr Zweck informing him that the Development Application had been refused.
In October 2014, Mr Zweck filed in the Environment Court an appeal against the refusal on the principal ground that clause 2.4 of the Agreement was invalid and the Development Application was not therefore hypothetical.
The regime for land management agreements
Section 57 of the Act creates a framework for entry by a council and landowner into an agreement relating to the development, management, preservation or conservation of land. It creates the same framework for entry by the Minister and a landowner into such an agreement but that aspect can be ignored for the purposes of this appeal.
Section 57 relevantly provides in relation to agreements between a council and landowner:
57—Land management agreements
…
(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)   … 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 … 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).
…
(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.
…
(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.
...

Section 57 prescribes several requirements for a land management agreement to be binding on the parties and in particular upon a landowner. The requirements include that the agreement be entered into by or on behalf of a council, the agreement be entered into by or on behalf of the landowner, all other persons with a legal interest in the land consent to the landowner’s entry into the agreement, the agreement be registered in accordance with the regulations, a note of the agreement be entered against the relevant instrument of title, and the agreement relate to the development, management, preservation or conservation of land within the area of the council.
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.[7] By virtue of subsection 57(5), the agreement is enforceable not only against the original landowner party but also against that party’s successors in title.
[7] Jolly v District Council of Yankalilla [2006] SASC 53; (2006) 143 LGERA 428 at [37] per Perry J (with whom Sulan and Layton JJ agreed).
Reasons for judgement
The Judge held that on a section 86(1)(a) appeal the Environment Court does not have jurisdiction to consider the validity of a land management agreement.
The Judge considered that the question of jurisdiction was to be determined by the principles applying to collateral challenge to administrative acts.[8]
[8] [2015] SAERDC 16 at [4]-[19].
The Judge considered that, absent express legislative power, a collateral challenge to an administrative act is not available upon the exercise by a court of administrative power as opposed to judicial power.[9] The Judge referred to the decision of the Victorian Court of Appeal in Director of Housing v Sudi[10] in the following terms:
In Sudi the Court held that the Victorian Civil and Administrative Tribunal did not have any implied power to undertake a collateral review of the validity of a decision of the Director of Housing to apply, pursuant to the Residential Tenancies Act, for a possession order.
Warren CJ accepted that administrative decisions can generally be collaterally challenged but observed that the power to entertain a challenge will normally only arise in situations where a court is ‘dealing with an issue properly arising as an element in a justiciable controversy of which the court was seized’.[11]
The Judge accepted the following submissions by the Council:
Shortly stated the Council submitted that, in a planning appeal, the Court is conducting a hearing de novo and does not exercise judicial power, but rather exercises administrative power. As such, so it was submitted, there is no justiciable controversy to which a collateral challenge may be directed.
…
In the Council’s submission, in a planning appeal, this Court does not make binding pronouncements other than by way of an order to grant consent or confirm a refusal and as such does not engage in the exercise of judicial power.[12]
[9] At [13]-[17] and [19].
[10] [2011] VSCA 266, (2011) 33 VR 559.
[11] [2015] SAERDC 16 at [13]-[14].
[12] [2015] SAERDC 16 at [15] and [17].
The Judge considered that, on an appeal under section 86(1) of the Act, the Environment Court exercises administrative rather than judicial power relying upon an obiter dictum by Debelle J in Thorpe v Corporation of the City of Charles Sturt.[13]
[13] [1999] SASC 10.
The Judge concluded:
I am satisfied, having regard to the observations of the various judges in Sudi and of Debelle J in Thorpe, and absent any express power (there is no such power) in either the Act or the Environment, Resources and Development Court Act 1993, empowering the Court to undertake a collateral review, that on the determination of an appeal under s 86 of the Act, this Court does not have jurisdiction to consider a collateral challenge.[14]
[14] At [19].
The Judge held that, if the Court did have jurisdiction, he had a discretion whether to entertain the challenge. The Judge considered that the decision of this Court in Jacobs v One Steel Manufacturing Pty Ltd[15] established the existence of such a discretion.[16] The Judge considered that the discretion should be exercised against entertaining the challenge.[17]
[15] [2006] SASC 32, (2006) 93 SASR 568.
[16] At [6] and [20]-[21].
[17] At [22]-[23].
The Judge held that the Agreement was valid. The Judge addressed Mr Zweck’s principal argument that clause 2.4 operates as a prohibition on a particular form of development when section 57 permits only regulation of development in the following terms:
... The operative words in s 57 are that ‘A Council may enter into an agreement relating to the development, management, preservation or conservation of land ...’. I agree with the respondent’s submission that the expression ‘relating to’ is extremely wide. I see no warrant, in the terms of s 57(2), to read down the width of the expression in any material way.
As such, I am not persuaded that the prohibition or prevention of a single form of development i.e. the land division of a specified allotment, in and of itself, can be said not to be related to either the management or conservation or, for that matter, the development of land. On the contrary, one can readily understand how a restriction on the division of an allotment into smaller allotments, thereby retaining it in its more broad acre form, could be seen, at the very least, as managing or conserving the land.[18]
[18] At [27]. (Emphasis in original)
The Judge held that nevertheless the development application was not hypothetical because if development approval were granted the Council might reconsider the request to vary clause 2.4.[19] However, the Judge held that clause 2.4 prevented an application for land division being made and the Panel was correct to refuse to deal with the application which may have made it complicit in a potential breach of the Agreement and arguably the Act.[20]
[19] At [35].
[20] At [36]-[39].
Jurisdiction to determine validity
Mr Zweck contends that the Environment Court had jurisdiction to consider and determine whether clause 2.4 of the Agreement was valid and the Judge erred in holding otherwise.
The reasoning of the Judge essentially involved three propositions. First, Mr Zweck’s contention that clause 2.4 was invalid comprised or was equivalent to a collateral challenge to an administrative act. Second, absent express legislative power, a collateral challenge to an administrative act is not available upon the exercise by a court or tribunal of administrative power as opposed to judicial power. Third, on an appeal under section 86(1) of the Act, the Environment Court exercises administrative rather than judicial power.
The third proposition is incorrect. It may be assumed that a refusal of development authorisation by a relevant authority upheld on appeal by the Environment Court or a refusal of development authorisation by the Environment Court on appeal against its grant by a relevant authority does not preclude a fresh application for development authorisation and does not give rise to res judicata precluding such a fresh application. However, this is because on its proper construction the Act permits successive applications for development authorisation and hence the requirement of finality for res judicata is absent; it is not because the Environment Court does not exercise judicial power.
Subsection 88(2) of the Act governs the nature of an appeal to the Environment Court under section 86(1) against a grant or refusal to grant development authorisation. Section 88(2)(a) and (b) provide:
(2)The following provisions apply in connection with the exercise of the Court's jurisdiction in any proceedings under this Act:
(a) subject to paragraph (b), the Court should only seek to deal with and resolve those issues in dispute between the parties and should not, unless the Court considers it to be necessary or appropriate to do so, consider any aspect of the decision, assessment, consent, approval, direction, act, order or determination that is not being challenged;
(b) if—
(i)a person who has applied for a development authorisation is appealing against a refusal to grant the authorisation; or
(ii)a third party is appealing against a decision to grant a development authorisation,
the Court may (if the Court thinks fit) proceed to consider the matter de novo (adopting such processes and procedures as it thinks fit and taking into account any material that was before the relevant authority when it refused to grant the authorisation and such other evidence or material as the Court thinks fit);
Subsection 88(2) proceeds on the basis that prima facie the appeal is to proceed by a consideration of alleged errors by the relevant authority in making the decision unless the Environment Court exercises its discretion to consider the matter de novo. The jurisdiction exercised by the Environment Court may be compared with the jurisdiction exercised by this Court on a taxation appeal under section 92 of the Taxation Administration Act 1996 (SA) which is a hearing de novo but is an exercise of judicial power. In Lakshmanan v City of Norwood,[21] Kourakis J as he was then (with whom White J agreed) said:
...The Environment Court, in hearing merits appeals, exercises judicial power...[22]
[21] [2010] SASCFC 15, (2010) 174 LGERA 428.
[22] At [71].
The second proposition is not correct as expressed: as observed by Warren CJ in the Victorian Court of Appeal in Director of Housing v Sudi,[23] the High Court in Minister for Immigration and Multicultural Affairs v Bhardwaj[24] held that the Immigration Review Tribunal could entertain a collateral challenge to a previous decision although the legislation did not expressly give it power to do so. In addition, it was held by the Victorian Court of Appeal in Director of Housing v Sudi[25] that the question whether a tribunal exercising administrative power has power to entertain a collateral challenge to an administrative act depends on the intention evinced by the legislation without necessarily requiring an express provision conferring such power. However, it is not necessary to further consider the second proposition because the appeal can be decided by determination of the first proposition.
[23] (2011) 33 VR 559 at [30].
[24] [2002] HCA 11, (2002) 209 CLR 597 at [51]-[53] per Gaudron and Gummow JJ (with whom McHugh J agreed). See also Plaintiff S157/2002 v The Commonwealth [2003] HCA 2; (2003) 211 CLR 476 at [76] per Gaudron, McHugh, Gummow, Kirby and Hayne JJ.
[25] (2011) 33 VR 559 at [31]-[45] Warren CJ and [61]-[63] per Maxwell P.
Mr Zweck’s contention that clause 2.4 was invalid was not a collateral challenge to an administrative act. It was a denial that he was bound by the promise contained in the Agreement not to divide Lot 105 and not to apply for development approval for such a division. It was in response to the assertion by the Council that his development application was hypothetical and should not be considered on its merits because, even if development approval were granted, he would be precluded by the Agreement from undertaking the division.
As noted above, land management agreements made under section 57 of the Act must comply with several requirements in order to be binding upon the landowner party to the agreement and his or her successors in title. If the existence, enforceability or effect of an agreement is relevant to a section 86(1)(f) appeal, the Environment Court has power to determine it as part of its jurisdiction to determine the appeal. No question of collateral challenge to an administrative act arises.
Sections 4 and 5 of the Environment, Resources and Development Court Act 1993 (SA) establish the Environment Court as a court of record. Section 7(1) relevantly provides that “the Court will have the jurisdiction … conferred on it by or under this or any other Act”.
Sections 86(1)(a) and 88(1) of the Act confer jurisdiction on the Environment Court to hear and determine an appeal by an applicant for development authorisation against a decision by a relevant authority to refuse or otherwise in relation to the authorisation. This conferral of jurisdiction necessarily confers upon the Court the power to determine any issue of fact, mixed law and fact or law that must be decided to determine the appeal. This is confirmed by section 88(2)(a) which provides:
(a)subject to paragraph (b), the Court should only seek to deal with and resolve those issues in dispute between the parties and should not, unless the Court considers it to be necessary or appropriate to do so, consider any aspect of the decision, assessment, consent, approval, direction, act, order or determination that is not being challenged[26]
and paragraph (b) which empowers the Court in its discretion to proceed to consider the matter de novo.
[26] (Emphasis added)
In Hackney Hotel Pty Ltd v Town of St Peters,[27] Wells J held that the predecessor of the Environment Court, the Planning Appeal Board, in exercising jurisdiction under the predecessor to the Act was entitled to dismiss an appeal against refusal of development authorisation without proceeding to consider the merits in circumstances in which the prospect of implementation of any development authorisation was remote.[28] This Court upheld this principle on appeal.[29] The hypotheticality principle has been upheld by this Court in relation to the Environment Court exercising jurisdiction under the Act.[30]
[27] (1983) 51 LGRA 243.
[28] At 248-249.
[29] Hackney Hotel Pty Ltd v Town of St Peters (1984) 53 LGRA 293 at 298 per Zelling J (with whom King CJ and White J agreed).
[30] Jolly v District Council of Yankalilla (2006) LGERA 428 at [49] per Perry J (with whom Sulan and Layton JJ agreed).
When the Council invoked the hypotheticality principle on the appeal to the Judge, the Council was necessarily relying upon the existence, enforceability and effect of the Agreement. Mr Zweck’s response in the Environment Court to the Council’s invocation of the hypotheticality principle was that clause 2.4 of the Agreement was invalid. The Court had power to determine the issues in dispute which included the enforceability of clause 2.4 of the Agreement which in turn depended on whether it related to the development, management, preservation or conservation of land.
Mr Zweck did not contend in the Environment Court, and does not contend on appeal, that it was ultra vires for the Development Assessment Panel to invoke the hypotheticality principle.[31] The parties proceeded in the Environment Court and in this Court on the assumption that in principle it could be so invoked but the issue was whether the Development Assessment Panel was correct to invoke it on the merits, namely whether clause 2.4 of the Agreement was invalid, and whether the Environment Court had jurisdiction to decide that question. It is unnecessary to consider whether it was ultra vires for the Development Assessment Panel to invoke the hypotheticality principle. The appeal can be decided on the assumption, without deciding, that the hypotheticality principle (whatever its juridical foundation) can be invoked at first instance.
[31] This is perhaps not surprising because, once the matter reached the Environment Court, the parties may have regarded that question as superseded by the question whether the Environment Court itself should invoke the hypotheticality principle.
The Council contends that on a section 86 appeal the Environment Court has power to determine issues of fact but has no power to determine issues of law (such as the validity of clause 2.4 of the Agreement). This contention must be rejected. There are numerous provisions of the Act and of the Development Regulations 2008 (SA) (leaving alone provisions of Development Plans made under the Act) that impact whether development authorisation should be granted. It is frequently necessary for the Environment Court to construe those provisions to determine whether development authorisation should be granted. It would be impossible for the Environment Court to exercise its jurisdiction or perform its function without determining issues of law. Whether an issue is one of fact, mixed fact and law or law involves a spectrum that depends on the positions adopted by the parties on the appeal. Even assuming, without deciding, that determinations by the Environment Court on section 86 appeals do not give rise to res judicata or issue estoppel and hence are not binding on the parties in other litigation, nevertheless the Environment Court has power to determine disputed issues of fact and law arising on an appeal. Ironically for the Council’s argument, the Judge’s decision that the Environment Court lacked power to determine the validity of clause 2.4 of the Agreement was itself an exercise of the power to determine an issue of law.
There is no warrant for a distinction between different types of issues of law for the purposes of the Environment Court’s power of determination. A contention that an agreement is not enforceable because it does not relate to the “development, management, preservation or conservation of land” is no different in principle to a contention that the agreement is unenforceable for want of authority from a party to enter into it, or on any other ground.
In Jolly v District Council of Yankalilla,[32] this Court considered a challenge to the validity of a land management agreement on the ground that the Council in that case was the landowner. This Court held that Mr Jolly was not entitled to raise the point on appeal because he had not raised it in the Environment Court and the principal party to the land management agreement was not a party to the appeal.[33] This Court considered that there was power to determine the validity of the land management agreement.[34] This Court observed that on the remission of the appeal to the Environment Court, it would be open to Mr Jolly to renew his argument that the land management agreement was not a valid agreement for the purposes of the Act.[35] The Council in that case did not argue that the Environment Court lacked power to determine the validity of the land management agreement and the case is therefore not authoritative on the existence of such power. However, this Court did not entertain any doubt as to the existence of such power.
[32] (2006) 143 LGERA 428.
[33] At [65]-[66] per Perry J (with whom Sulan and Layton JJ agreed).
[34] At [67]-[68] per Perry J (with whom Sulan and Layton JJ agreed).
[35] At [86] per Perry J (with whom Sulan and Layton JJ agreed).
The Environment Court had power to determine the validity of clause 2.4 of the Agreement. The Judge erred in holding that the Court lacked such power.
Existence of discretion to decline to determine validity
Mr Zweck contends that the Environment Court had no discretion to decline to determine whether clause 2.4 of the Agreement was valid and the Judge erred in holding otherwise.
In Jacobs v One Steel Manufacturing Pty Ltd,[36] Mr Jacobs sought an order that rule 28(7)(d) of the Workers Compensation Tribunal Rules 2001 (SA) not apply to restrict the quantum of counsel fees recoverable after the fifth day of trial. Mr Jacobs contended that the rule was ultra vires the rule making power contained in the Workers Rehabilitation and Compensation Act 1986 (SA). This Court held that the Tribunal had power to determine the validity of the rule. Besanko J (with whom Duggan J agreed) said:
In my opinion, a collateral attack on the validity of the relevant rules in the sense I have described is permissible. That conclusion follows from the acceptance of two propositions. First, as I have said, the relevant rules are a form of delegated or subordinate legislation. They are the product of a legislative act, not an administrative decision. Secondly, there is clear authority that, at least when the challenge is on the ground of simple or narrow ultra vires, a person prosecuted for the breach of a by-law or regulation may raise as a defence in the criminal court the invalidity of the by-law or regulation …
In my opinion, this case is sufficiently analogous to such a case that the same principle should be applied here.[37]
[36] [2006] SASC 32, (2006) 93 SASR 568.
[37] At [83]-[84].

Besanko J went on after reaching this conclusion to consider obiter whether a general principle exists to determine whether a collateral challenge is permissible in the case of all legislative and administrative acts and concluded that no such general principle had yet emerged.[38] Besanko J referred to seven factors identified by academic commentators that might be relevant in deciding whether a collateral challenge was permissible.[39] Besanko J postulated that:
It may be that, leaving aside cases where a statutory provision provides a clear answer, the common law will develop to the point whereby a court or tribunal in which a collateral challenge is raised has a discretion to entertain the collateral challenge, or to decline to do so and invite the party raising the challenge to institute judicial review proceedings in the court with jurisdiction to entertain such proceedings. … The discretion would be exercised by reference to the factors identified in [93] above.[40]
Besanko J concluded this discussion by saying:
At all events, the formulation of a general principle (if there is to be one) as to when the validity of government action, whether it be legislative or administrative in character, may be challenged collaterally must be reserved for the High Court.[41]
[38] At [91].
[39] At [93].
[40] At [95].
[41] At [96].
The common law has not since 2006 developed in the manner postulated by Besanko J in the paragraph extracted at [72] above. In Director of Housing v Sudi,[42] the Victorian Court of Appeal held that the question whether a tribunal has power to entertain a collateral challenge to an administrative act depends on the intention evinced by the legislation in question and proceeded on the basis that such a tribunal either has or does not have power to entertain the challenge: it is not a matter of a free ranging discretion to be exercised by the Tribunal in the individual circumstances of the case.
[42] (2011) 33 VR 559 at [30].
In any event, the present case does not involve a challenge to an administrative act or to delegated legislation. It involves the question of law whether clause 2.4 of the Agreement relates to “the development, management, preservation or conservation of land” within the meaning of section 57(2) of the Act. The Council contended in the Environment Court that clause 2.4 of the Agreement rendered Mr Zweck’s development application and appeal hypothetical. The Environment Court did not have a discretion not to consider Mr Zweck’s riposte that clause 2.4 was invalid. The Environment Court was obliged to determine this issue of law in order to determine the appeal.
Validity of clause 2.4
Mr Zweck contends that clause 2.4 of the Agreement does not relate to “the development, management, preservation or conservation of land” within the meaning of section 57(2) of the Act and accordingly is invalid and unenforceable.
Mr Zweck contends that the first limb of clause 2.4 does not relate to “the development…of land” because development is an active concept and clause 2.4 in negative in that it prevents development.
Mr Zweck contends that the second limb does not relate to “the development … of land” because it does not relate to the substantive development of land but rather to the adjectival subject of applications for development authorisation.
First limb: positive or negative relationship to development
The first limb of clause 2.4 provides:
The Owner shall not cause suffer or permit the division of that portion of the Land described as Allotment 105 in the Plan of Division
Mr Zweck contends that this limb does not relate to “the development … of land” within the meaning of section 57(2) of the Act because development is an active concept and clause 2.4 has a negative effect of preventing development rather than promoting or facilitating it or because it prohibits rather than regulates development by way of division of the land.
It is common ground that under the Act one species of development is the division of an allotment.[43]
[43] Development Act 1993 (SA) s 4(1).
Section 57(2) requires that the agreement is one:
... relating to the development, management, preservation or conservation of land...
The words “relating to” require that there be a connection or relationship between the two subject matters (in this case the agreement and development etc of land).[44] The degree of connection required depends on the text, context and evident purpose of the provision in accordance with normal principles of statutory interpretation.[45] Subject to the text, context and evident purpose of the provision, the words are broad and the connection ordinarily may be either direct or indirect.[46]
[44] Re Dingjan; Ex parte Wagner(1995) 183 CLR 323 at 363 per Gaudron (with whom Mason CJ and Deane J agreed); PMT Partners Pty Ltd v Australian National Parks and Wildlife Service (1995) 184 CLR 301 at 313 per Brennan CJ, Gaudron and McHugh JJ and 327-328 per Toohey and Gummow JJ.
[45] PMT Partners Pty Ltd v Australian National Parks and Wildlife Service (1995) 184 CLR 301 at 313 per Brennan CJ, Gaudron and McHugh JJ and 327-328 per Toohey and Gummow JJ.
[46] Re Dingjan; Ex parte Wagner(1995) 183 CLR 323 at 363 per Gaudron (with whom Mason CJ and Deane J agreed); PMT Partners Pty Ltd v Australian National Parks and Wildlife Service (1995) 184 CLR 301 at 327-328 per Toohey and Gummow JJ.
If an agreement prohibits development, there is a direct and clear relationship between the agreement and development. There is no reason to read subsection 57(2) as requiring that the agreement promote or facilitate development and there are several reasons not to read it in that way. Section 57 must be considered in the context of the Act as a whole, which proceeds on the basis that in its absence development would be unconstrained: the Act operates to prohibit or control, as the case may be, development in the interests of the community as a whole. Thus, section 32 prohibits any development unless it is approved under the Act. Section 35(3) provides for Development Plans to specify development that is non-complying in which event the development is prohibited unless both the Development Assessment Commission and the Council (and in some cases also the Minister) concur in permitting it and no appeal lies to the Environment Court against refusal of development authorisation. The Planning Strategy under section 22 and Development Plans under section 23 must relate to development but this does not entail that they cannot prohibit development.
Subsection 57(2) itself provides that an agreement may relate to the “preservation or conservation” of land. These concepts are usually the antithesis of development and their inclusion negates any implication that an agreement entered into under this subsection must promote or facilitate development and cannot prohibit it.
Subsection 57(2a) provides:
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.
This subsection provides some constraint on the terms of a land management agreement relating to the development of land but it is a soft constraint in two respects. First, it only creates a general principle, and not a requirement, that an agreement should not be used as a substitute to amending a Development Plan. Secondly, it only requires that regard be had to that principle and to the appropriate Development Plan. The subsection clearly contemplates that a land management agreement may when considered by the Minister or council to be appropriate prevent a particular form of development notwithstanding the provisions of the relevant Development Plan.
Subsection 57(12) provides:
The existence of an agreement under this section may be taken into account when assessing an application for a development authorisation under this Act.
It is common ground that, although it uses the word “may”, this subsection renders the existence of a land management agreement a mandatory consideration when assessing a development application when the agreement is relevant to the development the subject of the application. The obvious case in which the agreement will be relevant will be when it precludes a particular type of development. Mr Zweck contends that the purpose of this subsection is to enable a land management agreement affecting neighbouring land to be taken into account in assessing a development application for the applicant’s land. That contention should be rejected: it involves a very remote connection between the agreement and the development application that cannot have been the primary purpose of including the subsection and would involve the tail wagging the dog.
The evident purpose of section 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.
Mr Zweck contends that it is contrary to the overall scheme and objects of the 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. 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 subsection 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.[47] 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 section 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.
[47] 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.
The distinction sought to be drawn by Mr Zweck between promoting or facilitating development and preventing development is likely to be illusory in the case of most, if not all, land management agreements. For example, the Agreement did facilitate the development of land in that it enabled the Tivers to divide the northern portion of the land the subject of the Agreement into 15 allotments of approximately 2 hectares each being a non-complying development that would not otherwise have been permitted. In return, the Tivers agreed not to divide the southern portion of the land the subject of the Agreement (Lot 105).
The first limb of clause 2.4 relates to the development of land within the meaning of subsection 57(2) and is valid.
Second limb: development applications
The second limb of clause 2.4 provides:
The Owner shall not … cause suffer or permit the making of any application seeking the division of the said allotment.
Mr Zweck contends that this limb does not relate to “the development … of land” because it does not relate to the substantive development of land but rather to the adjectival subject of applications for development authorisation.
This limb does not relate directly to the development of the land but only indirectly in that it relates to an application for development authorisation to develop the land. Whether an indirect connection of this type is sufficient for the second limb of the clause to relate to development is a matter of construction of the provision having regard to its text, context and evident purpose.[48]
[48] See [82] above.
The evident purpose of section 57 is to enable a land management agreement to preclude, control or otherwise affect the development of land but not to preclude the making of an application for development approval in respect of the land. The text of subsection 57(2) does not suggest that a land management agreement can govern the entitlement of a landowner to make an application for development approval. Subsection 57(12) on its proper construction is inconsistent with the Council’s contention because it 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 and hence is not a barrier to an application for development authorisation.
The second limb of clause 2.4 does not relate to the development of land within the meaning of subsection 57(2) and is invalid.
Severance
It is common ground on appeal that, if the second limb of clause 2.4 is invalid, it can and should be severed from the balance of clause 2.4. This is the manifest intention of the Agreement as a whole as well as the effect of clause 10.1 of the Agreement.
Consequence
The Judge held that the Panel was correct to refuse to deal with Mr Zweck’s development application because dealing with it may have made it complicit in a breach of the second limb of clause 2.4 of the Agreement and arguably of the Act.
The invalidity of the second limb of clause 2.4 removes the premise for the Judge’s conclusion.
Hypothetical development
The Council filed a notice of contention contending that the Development Assessment Panel was justified in determining that the proposed development was hypothetical and was lawfully entitled to decline to consider it on its planning merits.[49]
[49] This contention assumes that the hypotheticality principle applies to the original consideration of an application for development authorisation and not just to an appeal against a determination on such an application. It is unnecessary to examine the validity of that assumption.
This alternative contention is premised on the Judge’s decision that clause 2.4 in its entirety is valid being upheld on appeal. On that premise, the Council contends that the Judge erred in finding that the proposed development was not hypothetical within the meaning of the principle recognised in Hackney Hotel Pty Ltd v Town of St Peters.[50]
[50] (1983) 51 LGRA 243.
The Council concedes that, if the first limb of clause 2.4 is valid but the second limb is invalid, it cannot be said that the proposed development is hypothetical. That concession is rightly made. If Mr Zweck’s application is considered on its merits, while the existence of the first limb of clause 2.4 is a material factor required to be taken into account, for the reasons given above it is not in itself decisive.
If development authorisation were granted, for the reasons given above, either it would override clause 2.4 pro tanto or the grant would be a relevant factor to be considered by the Environment Court in enforcement proceedings brought under section 85 of the Act. If the latter applies, it cannot be said in advance that the Environment Court would not exercise its discretion against enforcement. Accordingly, the proposed development is not hypothetical to the degree required by the hypotheticality principle.
Conclusion
The Judge had power and an obligation to determine whether clause 2.4 was valid as relating to the development of land within the meaning of section 57(2) of the Act. The Judge ought to have determined that the first limb was valid but the second limb was invalid.
The appeal should be allowed and the development application remitted to the Development Assessment Panel to consider and determine the application.
NICHOLSON J. I agree with the orders proposed by Blue J for the reasons his Honour has given.
I prefer to express no view at this stage on the extent to which or manner by which the so called hypotheticality principle might apply in planning appeals, as discussed by Kourakis CJ. I agree with Blue J that this appeal can be determined on the assumption that the hypotheticality principle is available to be invoked at first instance.