Interpreting development approvals

Take note of the High Court of Australia’s decision in Sunland Group Ltd v Gold Coast City Council¹

Relevant highlights and facts

Litigation involving Sunland Group Ltd (Sunland) and Gold Coast City Council (Council) concerned whether infrastructure charges were payable by Sunland pursuant to a preliminary approval granted by the Council.

The outcome of the appeal from an infrastructure charging perspective is not the focus of this article.

One of the grounds upon which the validity of the conditions was challenged was ambiguity in the scope of the infrastructure charging conditions imposed.

While not a central issue in the earlier hearing of the matter in the Planning and Environment Court or before the Court of Appeal, two members of the High Court gave specific consideration to Sunland’s submission that any ambiguity in the conditions of a development approval ought to be construed in favour of the approval holder.

In existing case law, a fundamental principle developed in Queensland planning law that the interpretation of development approvals was to approached in this way analogous to that which governs the interpretation of contractual arrangements between parties.

The relevant Queensland case law largely took its lead from the New South Wales Supreme Court decision of Ryde Municipal Council v Royal Ryde Homes & Anor² which enunciated the principle that:

…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.

Relevant aspect of decision

The reasons for judgment delivered by her Honour Justice Gordon and his Honour Justice Steward of the High Court suggest a different approach is open.

In this respect, Gordon J’s reasons for judgment state:

…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.

The High Court cases referred to are administrative law decisions involving judicial review of the exercise of statutory power alleged to be invalid for uncertainty. In those cases, the High Court held that an instrument (i.e. document) produced as a consequence of the exercise of a statutory power may not be invalid just because it has some uncertainty in its language or terms. However, the instrument must at least specify objective criteria and standards from which the obligations can be ascertained without subjective estimation.

In his reasons for judgment, his Honour Justice Steward also made the observation that the relevant conditions …are notto be construed like any other contract but rather in accordance with the rules of construction governing the interpretation of Acts of Parliament and subordinate internments.

While the other presiding members of the High Court delivered separate reasons, their reasons did not extend to the relevant principles of interpretation.

Implications

The High Court’s decision has already received judicial attention in Queensland’s Planning and Environment Court. In Noosa Council v Cordwell Resources Pty Ltd & Ors³, acknowledgment was made of recent reasons for judgment in the Sunland case by Justices Gordon and Steward, with his Honour Judge Long also stating:

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’.

Against this backdrop, Council officers responsible for drafting development approvals and enforcing development approvals should consider the question of how the approval will be interpreted by a Court carefully.

The High Court’s comments do not obviate the importance of conditions being carefully drafted with sufficient precision so that the approval holder can clearly understand their obligations.

However, they may assist councils (including those who frequently handle compliance investigations with respect to historical development approvals) to the extent that they indicate that local governments are no longer bound by a presumption that ambiguity in the wording of development conditions is to be construed in favour of landowners. Even if the wording of a particular condition has some ambiguity, it may be enforceable as a consequence of reading the conditions package as a whole and the application of the broader principles of interpretation discussed in this article.

If your council needs assistance in interpreting a development approval, please email Michael Cerruto or Terry Law, or call us now on (07) 3243 0000.

¹ [2021] HCA 35.
² (1970) 19 LGRA 321.
³ [2021] QPEC 67.