Australia: A fundamental change to interpreting development approvals?

One of the fundamental assumptions underpinning the interpretation of development approvals is that ambiguity in an approval should be construed in favour of the approval holder. A recent High Court authority seems to have chartered a course away from this previously settled principle.

The Status Quo

In the 1970 New South Wales Supreme Court decision of Ryde Municipal Council v Royal Ryde Homes & Anor,¹Else-Mitchell J commented, in interpreting a town planning consent with ambiguous conditions, that:

'I therefore think it sound to say that the legal qualities a consent possesses, or which flow from a consent are so important that care should be taken to ensure that consents are framed in clear terms and conditions are specified with certainty. Any lack of clarity or certainty is the responsibility of the council and it must take the consequences of any failure to specify accurately or in detail what is consented to as well as any conditions to which a consent is subject.'²

The principle that a development approval is interpreted in favour of the approval holder was adopted in the Queensland Court of Appeal decision of Matijesevic v Logan City Council³ in which Connolly J (with whom Matthews J agreed) opined:

'Planning decisions are apt to have considerable effects on the value of property and in my judgement it would accord with principle, where planning approvals are ambiguous, to construe them in the way which places the least burden on the land owner.'

The idea that in a case of ambiguity development approvals are construed in the way most favourable to (or placing the least burden on) the landowner is a principle that has 'been applied many times'⁴including as recently as July of this year in the Planning and Environment Court⁵and applied, or at least not challenged, by the Court of Appeal in February.⁶

Indeed, the principle is taken as given in textbooks.⁷

Sunland Group Ltd v Gold Coast City Council

On 10 November 2021, the High Court delivered its decision in Sunland Group Ltd & Anor v Gold Coast City Council⁸(Sunland). The case concerned whether infrastructure charges were payable by Sunland for a preliminary approval with ambiguity in the scope of the conditions, issued some time ago. Justice Steward's judgment in favour of the Council was largely adopted and supplemented by joint reasons from Kiefel CJ, Keane and Gleeson JJ. Justice Gordon delivered separate reasons, but agreed with the orders proposed by the majority.

It is a paragraph from her Honour Gordon J that is of particular interest. At paragraph [21] her Honour commented on the (seemingly conventional) submission from Sunland that ambiguity ought to be construed in favour of the approval holder, as follows:

'Before turning to the proper construction of s 6.1.31(2)(c) of the IPA, it is necessary to notice but reject the approach to construction contended for by Sunland. Sunland's contention that the existence of ambiguity in the instrument does not itself result in invalidity and that, where possible, ambiguity should be resolved against the Council as the drafter of the Preliminary Approval is contrary to principle and precedent. The instrument is to be construed and its validity assessed in accordance with the principles in King Gee Clothing Co Pty Ltd v The Commonwealth and Cann's Pty Ltd v The Commonwealth and not by recourse to the principles directed at saving bargains between consensual parties. Where there is an exercise of power for the imposition of a charge, the very nature of the power usually necessitates certainty in the imposition of the charge.'

Her Honour's reasoning appears to construe the Ryde and Matijesevic principle as an application of the contra proferentem rule (that ambiguity in contract be construed against the drafter), rather than a principle of planning law in its own right. Her Honour rejects that approach in favour of the general principles of interpretation and construction, as propounded by Dixon J in King Gee and Cann's.⁹

While not as direct, it is notable that Steward J in his judgment also opined that 'In that respect, and contrary to the submissions of the appellants, Conditions 13 to 16 are not to be construed like any other contract, but rather in accordance with the rules of construction governing the interpretation of Acts of Parliament and subordinate instruments.'¹⁰

Adoption?

Despite being less than a month old, her Honour's comments have gained traction in the Planning and Environment Court. In the reasons in Noosa Council v Cordwell Resources Pty Ltd & Ors,¹¹delivered on 1 December 2021, his Honour Judge Long SC noted, in relation to the interpretation of a condition relating to a transport management plan, that:

'It is further contended [by the Respondent] that in the construction of conditions of planning approvals:

(a) any ambiguity in the approved condition should be construed in a manner that places the least burden on the landowner, and ambiguity in a development condition should be construed against the imposing authority; and

(b) any lack of certainty "is the responsibility of the applicant who formulated the conditions and, as such, the applicant should bear the consequences".

It is unnecessary to dwell upon the decisions which are relied upon for these broadly stated propositions or to consider the extent to which any of those decisions represent any more than conclusions which sought to find and provide a sense of certainty of application of the provisions in issue. This is because the High Court has, very recently, determined that the conditions of a development approval are not to be construed by reference to principles applicable to the construction of contracts "but rather in accordance with the rules of construction governing the interpretation of Acts of Parliament and subordinate instruments". In another judgment, there is also an indication that an approach to construction upon the premise that "ambiguity should be resolved against the Council, as the drafter of the [approval], is contrary to principle and precedent".

The approach of the Applicant, in argument, was to correctly seek to engage relevant principles of statutory interpretation as they have been particularly applied to the construction of planning schemes, such as is set out in Zappala Family Co Pty Ltd v Brisbane City Council. The same principles which apply to statutory construction are applicable, with allowance for a common-sense approach in reading the documents in a practical way, as a whole and as intending to achieve a balance between outcomes. Whilst bearing in mind the need to consider context and purpose from the outset, "the correct approach to statutory interpretation must begin and end with the text itself".'

Watch this space

This new approach to the interpretation of development approvals would, at first blush, seem to benefit local governments and other issuers of approvals who are no longer handicapped by a presumption that approvals are construed to have the least burden on the land owner. However a question remains, that if heavier reliance is placed upon administrative law authorities like King Gee,¹² Cann's Pty Ltd¹³ and Television Corporation,¹⁴is there a greater risk that ambiguous approvals or conditions could be challenged as being an invalid exercise of power?

In a jurisdiction awash with new authority and principles stemming from the introduction of the Planning Act 2016(Qld), a change in arguably one of the most stable and enduring principles of the jurisdiction was certainly not expected. How trial judges grapple with the new approach is certainly something to watch.

Footnotes

¹Ryde Municipal Council v Royal Ryde Homes & Anor (1970) 19 LGRA 321.

² Ryde Municipal Council v Royal Ryde Homes & Anor (1970) 19 LGRA 321, 324.

³ Matijesevic v Logan City Council [1984] 1 Qd R 599.

⁴ Transpacific Industries Group v Ipswich City Council [2013] QPELR 70, [14].

⁵ Gold Coast Motorsport Training Centre Pty Ltd v Gold Coast City Council [2021] QPEC 33.

⁶ Bucknell & Anor v Townsville City Council & Anor [2021] QCA 26. Both the First Respondent Council and the Second Respondent in that matter submitted the well-established principle, as was recorded by her Honour Philippides JA at [44] and [45], but her Honour held there was no ambiguity in that case at [59].

⁷ Alan Fogg et al, Planning & Development Queensland, (Thomson Reuters (Professional) Australia: Sydney), (online) [PA.CH7.PT1.80.1]:'Where a planning approval is ambiguous, it should be construed in a manner which places the least burden on the landowner.' (last updated 22.07.2021).

⁸ Sunland Group Ltd v Gold Coast City Council [2021] HCA 35.

⁹ King Gee Clothing Co Pty Ltd v The Commonwealth (1945) 71 CLR 184; Cann's Pty Ltd v The Commonwealth (1946) 71 CLR 210.

¹⁰ Sunland Group Ltd v Gold Coast City Council [2021] HCA 35, [58].

¹¹ Noosa Council v Cordwell Resources Pty Ltd & Ors [2021] QPEC 67.

¹² King Gee Clothing Co Pty Ltd v The Commonwealth (1945) 71 CLR 184.

¹³ Cann's Pty Ltd v The Commonwealth (1946) 71 CLR 210.

¹⁴ Television Corporation Ltd v The Commonwealth (1963) 109 CLR 59.

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