On 14 March 2018, the High Court of Australia overturned the decision of the Court of Appeal in Tighe & Anor v Pike & Ors [2016] QCA 353.

The High Court’s decision confirms a subsequent owner of land created by the reconfiguration of a larger parcel must comply with a condition of the development approval for the reconfiguration that should have been, but was not, satisfied by the original owner prior to completing the reconfiguration.

The case considers section 245 Sustainable Planning Act 2009 (Qld) (SPA) (repealed) in detail, which provides development approvals (including conditions) attach to the land and bind the owner, owner’s successors in title and any occupier of the land. Section 245 of the SPA has been substantially reproduced as section 73 in the Planning Act 2016 (Qld).

It reinforces the importance of undertaking thorough due diligence of a property prior to purchase.

Facts

The Tighes owned lot 1 and the Pikes owned lot 2. Both lots were the product of a reconfiguration of one lot into two.

It was a condition of the development approval authorising the reconfiguration that an easement benefiting lot 2 to allow both access and the connection of services and utilities over lot 1 be registered prior to Council signing the survey plan for the reconfiguration (Condition 2).

The original approval holder did not comply with the requirement in that they registered an easement for access only. The result was there was no easement permitting the connection of services and utilities and the Pikes could not build a dwelling house on their land.

The original proceeding was an application to the Planning and Environment Court (PEC) for enforcement orders to compel the Tighes to comply with Condition 2, in which the Pikes were successful.

Court of Appeal

The Court of Appeal unanimously allowed the Tighes’ appeal and overturned the PEC’s decision.

The Court held the PEC’s power to make enforcement orders arose only if the PEC was satisfied the Tighes had committed a development offence and as they were not parties to the development approval, Condition 2 did not impose any obligations on them. In fact, the original approval holder, not the Tighes, had committed a development offence.

The decision was based on a finding that once the reconfiguration was completed and lots 1 and 2 were created, the development approval was spent. The Court of Appeal interpreted section 245 of the SPA to mean the conditions of the development approval for the reconfiguration of the original lot bound only the owner of and any successors in title to, that original lot. The language of Condition 2 was such that it did not impose a continuing and freestanding requirement severed from the simultaneous creation of the reconfigured lots.

Read the complete reasons for judgment here.

High Court of Australia

The High Court unanimously allowed the Pikes’ appeal and overturned the Court of Appeal’s decision. The matter will be remitted back to the PEC for the making of orders to compel the Tighes to comply with Condition 2.

The High Court accepted a submission by the Pikes that the Court of Appeal erred in concluding Condition 2 imposed a requirement only as a condition of completing the reconfiguration which was to be complied with simultaneously with that event, and in concluding that section 245 of the SPA was not capable of being engaged after the reconfiguration was completed.

It rejected the Court of Appeal’s interpretation of section 245 of the SPA and noted it had ‘glossed’ the language of the section. It held section 245(1) of the SPA expressly gives the conditions of a development approval the character of personal obligations capable of enduring in their effect beyond the completion of the development authorised by the approval.

The effect of section 245 is that the development approval attaches to all the land the subject of the development application for the approval. The Pikes and Tighes are the successors in title to the owners of the land in the original lot the subject of the development application.

The High Court dismissed any suggestion that successors in title may be exposed to a penalty merely by acquiring land which happens to be bound by terms of a development approval, such that a successor in title could be said to have failed to comply with an approval by doing nothing. In this case, the High Court noted there had been lengthy correspondence between the parties prior to the Pikes instituting the original proceeding and the Tighes had ample opportunity to provide an easement in compliance with Condition 2. The Court was satisfied there had been a failure to comply with Condition 2, not just bare non-compliance.

Read the complete reasons for judgment here.

Things to remember

Development approvals, including conditions, run with the land and bind successors in title.

It is important to undertake the necessary searches to determine whether land is affected by an existing development approval, and if so, whether there has been compliance with approval conditions. This includes obtaining a planning and development certificate from the relevant local government. Otherwise, purchasers are at risk of committing development offences in the future.