Supreme Court ruling on validity of Land Management Agreement

The Full Court of the Supreme Court considered a range of issues about Land Management Agreements (LMA) in the recent case of Zweck v Town of Gawler [2015] SASCFC 172.
A landowner had applied to the Council for development approval for land division.  The Council refused to assess the application due to a clause in a LMA that was registered over the land which read:
The Owner shall not cause suffer or permit the division of… Allotment 105… nor cause suffer or permit the making of any application seeking the division of the said allotment.
The landowner appealed this decision of the Council to the ERD Court claiming, amongst other things, that the clause of the LMA was invalid.
The Judge of the ERD Court dismissed the appeal, finding that the ERD Court did not have jurisdiction to entertain a challenge to the LMA in the course of a planning appeal and that, even if it did, the Court had a discretion to decline to entertain the challenge and should do so.  Further the Judge found that the LMA was valid and that the LMA defeated the application.
The Full Court overturned this decision. On appeal, it found that the ERD Court did possess the jurisdiction to determine the validity of the LMA.  The Full Court said the ERD Court has the power to determine any issues of fact or law that need to be decided to determine a planning appeal.  When the Council contended that the application was hypothetical (due to the LMA), it was necessarily relying upon the existence, enforceability and effect of the LMA.  This meant that the enforceability of the LMA was an issue in dispute, and thus the ERD Court had jurisdiction and indeed an obligation to decide the issue.
The Full Court went on to rule the second part of the clause (which prohibited an application being made) to be invalid.
However, the Full Court ruled that the first part of the clause (preventing the division of land) was valid based on section 57(2) of the Development Act 1993 which states:
A council may enter into an agreement relating to the development, management, preservation or conservation of land within the area of the council with the owner of the land. (my emphasis)
The Full Court said that the phrase “relating to” requires a connection or relationship between the two subject matters, in the context of s57 the words “relating to” are broad and the connection ordinarily may be either direct or indirect.  The Full Court found an agreement prohibiting development had a direct and clear relationship between the agreement and the development prohibited.  However, the Full Court added that whilst the clause was valid, it did not have the “automatic effect” that any application contrary to the clause must be denied.
The case shows that the ERD Court has the jurisdiction to determine the enforceability of LMAs in certain situations.  LMAs may “prohibit” certain forms of development but an LMA cannot deny a person their entitlement as a landowner to make an application for development approval.  Further it will then be a matter for the planning authority to determine the weight to be given to the clause but the planning authority is not bound to refuse the application because of the clause ‘prohibiting’ that development.
For any further information please contact George Manos or James Levinson on 8212 9777.