Development consents are required to be framed in clear terms, for the obvious purpose of ensuring that the beneficiary of a consent, successors in title to the land enjoying the benefit of the consent, and the public at large are aware of what has precisely been approved by that consent.  Complex problems of interpretation often arise in circumstances where the terms of a consent are ambiguous or uncertain.  In the recent NSW Court of Appeal decision of Cheetham v Goulburn Motorcycle Club Inc. [2017] NSWCA 83 the Court of Appeal was required to adjudicate on competing interpretations of an approval granted by Goulburn Mulwaree Council for a motor racing venue near Goulburn.  In doing so, the Court traversed the relevant principles of construction that apply in such circumstances, including the need to resort to documents referenced in the consent, where necessary.

Cheetham v Goulburn Motorcycle Club Inc. [2016] NSWLEC 80 (decision at First Instance)

On 18 August 2015, the Council granted development consent for “the construction and operation of a motorcycle facility” on the land.  A series of conditions formed part of the consent.  However, none of the conditions imposed a participant limit, expressly imposed spectator limits or expressly imposed total attendance limits for the proposed development.  There was also no expressly imposed limit on the number of motorcycles permitted to be ridden on any day at the proposed development.

Two objectors commenced proceedings against the Club seeking declarations from the Court that, amongst other things, the consent was invalid on the grounds that the consent related to unlawful use.  Specifically, the Applicants contended that, properly characterised, the consent granted approval for a use consistent with “recreation facility (major)”, being a prohibited use under the Goulburn Mulwaree Local Environmental Plan 2009 (LEP).  That use is defined in the following terms:

recreation facility (major) means a building or place used for large-scale sporting or recreation activities that are attended by large numbers of people whether regularly or periodically, and includes theme parks, sports stadiums, showgrounds, racecourses and motor racing tracks.

The Club contended that the use was consistent with “recreation facility (outdoor)” under the LEP, which was a permissible use.  Relevantly:

recreation facility (outdoor) means a building or place (other than a recreation area) used predominantly for outdoor recreation, whether or not operated for the purposes of gain, including a golf course, golf driving range, mini-golf centre, tennis court, paint-ball centre, lawn bowling green, outdoor swimming pool, equestrian centre, skate board ramp, go-kart track, rifle range, water-ski centre or any other building or place of a like character used for outdoor recreation (including any ancillary buildings), but does not include an entertainment facility or a recreation facility (major).

The immediate challenge for both parties arose out of the terms of the consent, or lack thereof, as to whether the overall use was characterised as “major” or “minor” in the circumstances.  At stake was the Club’s ability to continue using its land for a motorcycle facility.

The Court embarked upon a consideration of the conditions of consent, specifically conditions 1 and 2. Condition 1, in substance, listed various documents defining the scope of the proposed development.  However, there was no indication in the referenced documents as to which part or parts of the documents were Intended to form part of the consent.

After reviewing the documents referenced at Condition 2, amongst other considerations, the Court found that “it was not unreasonable for the Council to conclude that the Club’s activities could not fall within the description of the events attended by large numbers of people” (at [63], and that “[I]t was certainly open to the Council to conclude that there was a functional maximum number of spectators limited by the proposed facilities.” (at [65]).

Justice Moore ultimately determined:

[83] I have concluded that the Council, through its merit development assessment and determination process, determined that the Club’s proposed facility might properly be classified as a “recreation facility (outdoor)” on the basis of the factual material before it.  Proper consideration of the proposed facility, when tested against the definition of “recreation facility (major)”, discloses no factual features that would have required the Council to determine its characterisation as falling within that definition.

The Applicants’ summons was dismissed, with costs reserved.

Cheetham v Goulburn Motorcycle Club Inc. [2017] NSWCA 83

The Applicants appealed the judgment at first instance, which the Court of Appel ultimately upheld.  In summary, the Court of Appeal found that the trial judge did not undertake the correct exercise he had set for himself “of determining whether the development properly characterised was a prohibited development, but rather addressed the different question, namely whether the decision of the Council was afflicted by any legal error.”  The trial judge then stated that no ground had been advanced based on “Wednesbury unreasonableness”, noting that “this was the only possible basis” for challenge to the Council’s August 2015 decision.  The Court of Appeal said:

[43] … “Wednesbury unreasonableness” is a description of a legal error committed by an administrative body; it is irrelevant in circumstances where the reviewing court is required to find the facts constituting a precondition to the exercise of a function by an administrative body.

Principles of interpretation

The Court of Appeal then undertook the task of determining whether the development consent, properly characterised, was a prohibited development (being the test which, it found, should have been addressed by the trial judge in the first instance).  In doing so, the Court of Appeal outlined some preliminary observations on the relevant principles of statutory interpretation (generally omitting citations):

  • the ordinary principles of interpretation apply to a development consent as they do to other statutory instruments.
  • one primarily looks at the document constituting the approval, and construes it.
  • the terms of another document may be incorporated in a development approval either expressly or by necessary implication.
  • the mere approval of an application does not necessarily have the effect of incorporating all the matters stated in the application.

The Court observed that difficulties can arise where “a development consent refers to or specifically incorporates other documents in the conditions of consent”.  The Court cited Meagher JA in Allandale Blue Metal Pty Ltd v Roads and Maritime Services [2013] NSWCA 103:

The extrinsic evidence to which reference legitimately may be made when construing a public document, such as a development consent, is more limited. Reference may be made to documents other than the consent itself if those documents, or parts of them, are incorporated into the consent expressly or by necessary implication.

Development consent

The Court of Appeal observed that condition 1 of the development consent simply incorporated thirteen documents without identifying which part or parts of those documents, if any, were intended to constitute actual conditions of consent.  In reviewing the documents referenced at condition 1, the Court found that many of the documents and many of the comments set out in the respective documents were not intended to operate as conditions of consent.  For example, comments relating to the number of likely attendees at intra-club or inter-club events held at the property were “statements of intention” only, which could not be construed as conditions.

The Court then distinguished a different category of documents referenced at Condition 1 which, in the Court’s view, were necessary to consult to properly understand that nature of the consent, including the “Site Plan” and other plans listed in condition 1:

[27] … It is impossible to understand the nature and scope of the development approved by the Council without referring to the Site Plan.  If there is any doubt about the scale of the activities permitted by the Consent, that doubt cannot be resolved without consulting the Site Plan showing the works to be undertaken on the Land…

The Court found that the Site Plan, and thus the consent:

  • did not authorise motorcycle activities on the land that would attract “members of the public in large numbers.”
  • permitted the construction of only one building on the land that might cater for the needs of participants or spectators attending the facility.
  • did not incorporate the permanent structures that are “characteristic of theme parks, sports stadiums, showgrounds or racecourses that attract members of the public in large numbers.”
  • set aside two apparently small areas for spectators.
  • provided limited provision for parking.

Overall, the Court noted that the “facilities to be provided as contemplated by the Consent are ill-adapted to the purpose of attracting large numbers of members of the public to events on the Land.”  For these reasons, the Court of Appeal (McColl JA and Sackville AJA) concluded, that the consent did not permit the land to be developed for the prohibited use of “recreation facility (major)”.

The appeal was dismissed, with the appellants to pay the Respondents’ costs.

Dissenting viewpoint

Justice Basten took a different view from the majority, for the reasons set out in the judgment, finding that the appeal should have been upheld, with a declaration that the development consent represented a “prohibited use”.  The split decision is arguably indicative of the challenges faced by judges in having to characterise development consents based on “extrinsic evidence to which reference legitimately may be made when construing a public document”, requiring finely balanced considerations, about which opinions may legitimately differ.

The Court of Appeal’s reference (at [21]) to the cautionary comments of Justice Else-Mitchell J in Ryde Municipal Council v The Royal Ryde Homes (1970) 19 LGRA 321 at 323-324 was suitably apt:

… Serious inconvenience, ambiguity and confusion could arise if, in all instances, general statements of fact and assertions of intention in an application form, as well as every other statement made in support of an application, were to be regarded as terms or conditions of a development consent, and problems would inevitably arise as to the real scope and tenor of any such consent.