How to interpret conditions of consents – a new case considers headings and parts

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[co-author: Stephanie Willis]*
 

The recent decision of Justice Robson in Hitchcock v Reed [2022] NSWLEC 81 provides important lessons on how to interpret conditions of development consent, particularly headings, in the context of physical commencement.

A key aspect of the test of physical commencement is that the works relied upon to establish physical commencement must “relate to” the development consent – that is, the works must have been carried out in accordance with the conditions of consent.

In construing the conditions of consent in this case, Robson J considered headings within the document such as ‘Conditions which must be satisfied prior to the demolition of any building or construction’, ‘Conditions which must be satisfied prior to the issue of any construction certificate’ and ‘Conditions which must be satisfied prior to the commencement of any development work’.

These commonly used headings in parts of a consent typically provide markers as to what things must be completed before specific steps in the development process, such as demolition or issue of a construction certificate. The judgment confirms that such headings “form part of the consent”.

Robson J confirmed, that a consent is an (environmental planning) instrument and should be interpreted according to sections 3 and 35 of the Interpretation Act.

This reasoning is based on the meaning of ‘instrument’, which includes an environmental planning instrument made under an Act, and includes an instrument made under any such instrument. Accordingly, a development consent is an instrument made under an instrument.

As a result, the Interpretation Act applies, so that headings to parts, divisions or subdivisions are taken to be part of the instrument.

Case Summary Hitchcock v Reed

Facts

Ms Hitchcock brought proceedings in Class 4 of the Land and Environment Court seeking an injunction restraining her neighbour, Ms Reed, from acting on a development consent, which Ms Hitchcock claimed had lapsed.

The development consent authorised development for the purpose of substantial alterations and additions to a dwelling house and associated landscape works on a property at Watson’s Bay.

Ms Reed relied on works carried out in relation to the demolition of two dormer windows and the construction of a new dormer window (Dormer Works) to establish physical commencement.

Ms Hitchcock alleged that the Dormer Works were unlawful as they had not been carried out in compliance with a number of conditions of consent. The specific conditions were in Part B, Part C and Part D of the consent, and were required to be satisfied respectively prior to the demolition of any building or construction, prior to the issue of any construction certificate, or prior to the commencement of any development work.

The dispute in the proceedings concerned whether these conditions were required to be satisfied before the Dormer Works were carried out.

Decision

Pursuant to s 4.53 of Environmental Planning and Assessment Act 1979, a development consent must be “physically commenced” before the lapsing date otherwise the development consent will lapse.

Justice Robson found that the Respondent was required to, but did not, comply with specific conditions of consent, before carrying out the Dormer Works.

His Honour found that accordingly the Dormer Works did not “relate to” the development consent and could not be relied on to establish physical commencement.

His Honour made orders declaring that the development consent had lapsed, restraining the Respondent from taking further action in reliance on the consent, and ordering the Respondent to pay the Applicant’s costs.

Key Findings

Justice Robson found that the relevant approach to interpreting conditions of consent is to consider the conditions “both individually and collectively” and to ask “what a reasonable reader would understand the words to mean when reading the condition in the context of the other conditions and of the consent as a whole”.

His Honour primarily relied on two aspects of the consent, namely:

  • Condition B.1, which His Honour found to be a “prescriptive” condition requiring all conditions in Part C and D of the consent to be satisfied before any demolition work; and
  • the headings to Parts B, C and D, which set out when the conditions under each Part had to be satisfied, with Part B being prior to the demolition of any building or construction, Part C being prior to the issue of any construction certificate and Part D being prior to the commencement of any development work.

Justice Robson held that the headings to each “Part” formed part of the consent pursuant to sections 3 and 35 of the Interpretation Act 1987. This does not apply to subheadings to individual conditions, although His Honour found these to be relevant to interpreting the conditions.

Ultimately, his Honour found that certain conditions in Part B had to be satisfied prior to the demolition of any building or construction which included the demolition carried out as part of the Dormer Works; certain conditions in Part C had to be satisfied before the issue of “any” construction certificate which included the construction certificate that was issued for the Dormer Works; and certain conditions in Part D had to be satisfied before the commencement of any development work which included the Dormer Works.

Notably, His Honour rejected the Respondent’s arguments that since the Dormer Works were minor compared to the substantial works the subject of the consent, the phases “any building and construction” and “any demolition work” in the conditions should be interpreted as only including more substantial works.

However, Justice Robson did uphold the Respondent’s argument in relation to one of the conditions of consent, Condition C.4, which His Honour found did not need to be satisfied prior to the Dormer Works. Although Condition C.4 was captured by the “prescription” in Condition B.1 and fell under the Part C heading “Conditions which must be satisfied prior to the issue of any construction certificate”, His Honour found that Condition C.4 contained express words that only required this condition to be satisfied before the issue of a construction certificate relating to “infrastructure works”. His Honour found that the Dormer Works were not “infrastructure works” and, as such, this condition did not need to be satisfied before these works were carried out

Lessons

Headings are now commonly used in parts or divisions of conditions of consent to denote matters that must be satisfied before a particular action, such as commencement of works or issue of a construction certificate. Such divisions and headings assist in making it clear what matters must be completed prior to each stage of implementation, and are a useful way to structure consents.

This judgment confirms that such headings contribute to the meaning and interpretation of the conditions, by virtue of conditions of consent being an ‘instrument’, and accordingly, by the application of the Interpretation Act.

Under the Interpretation Act, whilst headings to ‘chapters, parts, divisions or subdivisions’ are taken to be part of the instrument, there are exceptions. Notable exceptions, commonly seen in conditions of consent, include (in most circumstances) endnotes and sub-headings to individual conditions (which Justice Robson found do not form part of the consent but are relevant to interpretating the relevant condition).

Note that the words in the heading are not decisive and may be overridden by express words in the specific condition of consent.

*Associate, Planning, Environment and Government

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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