Posted on September 22, 2025 by Stuart Simington 4

Deferred commencement conditions – Does the consent authority have to be satisfied ?

Painters Lane Developments sought declaratory relief that the deferred commencement conditions in a development consent for a 20-storey mixed-use development in Gosford had been satisfied and the consent had not lapsed.

The deferred commencement condition 1.1(b) required:

“Written permission and deed of agreement to enter the site and construct the sewer location is to be obtained from the owners of No. 333-337 Mann Street.”

Painters Lane argued that condition 1.1(b) was satisfied when a “Deed of Undertaking” was provided to Council on 18 March 2021.

Council argued that the Deed was legally deficient (void for uncertainty, no consideration, no binding successors) and Council needed to be “satisfied” with the documentation before the condition was met.

Key Issue

The most important issue was whether s 4.16(3) of the Environmental Planning and Assessment Act 1979 required Council to reach a state of satisfaction before the deferred commencement condition could be satisfied. Section 4.16(3) provides:

“A development consent may be granted subject to a condition that the consent is not to operate until the applicant satisfies the consent authority, in accordance with the regulations, as to any matter specified in the condition.”

Council contended that this provision mandated a two-step process:

1. Applicant provides evidence
2. Council must be “satisfied” as to the “matter specified in the condition”

Council argued the issue was covered by the earlier case of Dennes v Port Macquarie-Hastings Council [2018] NSWLEC 95, where a deferred commencement condition requiring a plan to be submitted “for approval” and “determined to be satisfactory” was not satisfied by mere submission of the plan. However, the Court distinguished Dennes, finding that Condition 1.1(b) contained no equivalent requirement for Council approval or satisfaction.

Reasoning

 The Court rather applied established principles from J.K. Williams Staff Pty Limited v Sydney Water Corporation [2021] NSWLEC 23, which emphasized that development consents must be construed “according to [their] written terms, construed in context” and determined “objectively having regard to the context in which the consent was issued.”

Robson J also relied on:

• Canny (The Owners – Strata Plan No. 4983 v Canny) [2018] NSWCA 275 where any lack of clarity is the consent authority’s responsibility—they “must take the consequences of any failure to specify accurately“.
• Sunland Group Limited v Gold Coast City Council [2021] HCA 35: Emphasized the significance of specific drafting choices and that ambiguity should be construed according to ordinary statutory interpretation principles
• Taylor v The Owners – Strata Plan No 11564 [2014] HCA 9: Construction must not displace the statutory scheme
• Esso Australia Pty Ltd v The Australian Workers’ Union [2017] HCA 54: Courts have no authority to reconstruct conditions to “overcome unintended consequences”

Council’s satisfaction was not itself “a matter specified in [Condition 1.1(b)]” under s 4.16(3). The “matter specified” was the obtaining of written permission and a deed of agreement—not Council’s approval of that documentation. This distinguished the case from Dennes, where the condition explicitly specified that the plan “must be determined to be satisfactory” by council, making council satisfaction a specified matter.

Following Taylor and Esso, the Court refused to imply additional requirements not expressed in the condition’s text. The Court emphasized it had “no authority to reconstruct the condition…in order to overcome unintended consequences.”

The Court also considered s 76(4) of the EPA Regulation 2021, which provides that if an applicant produces evidence, “the consent authority must notify the applicant whether it is satisfied about the relevant matters.” However, this was viewed as a procedural requirement, not a substantive barrier to satisfaction of the condition.

The Court applied Canny in finding that drafting deficiencies are the consent authority’s responsibility. If Council intended to require its own satisfaction as a condition precedent, it should have drafted the condition accordingly.

The Court noted that s 4.16(3) does not “necessarily trump the wording of Condition 1.1(b),” particularly given Canny’s emphasis that consent authorities must bear the consequences of unclear drafting.

The Court was satisfied that the Deed satisfied the requirements of the condition 1.1(b) despite its “ineloquent” drafting.

Implications

The case provides important clarification on the operation of s 4.16(3) EPA Act, establishing that:

• The section operates through the specific “matters specified” in each condition, not as a blanket requirement for consent authority to be satisfied.
• Express drafting requirements for approval/satisfaction will be enforced, but such requirements will not be implied.
• The distinction between objective evidence requirements and subjective satisfaction requirements is crucial in deferred commencement conditions.
• Consent authorities must draft deferred commencement conditions precisely if they wish to retain discretionary approval rights.

You can read the full decision here.

If you have any questions regarding this article, please leave a comment below or contact Stuart Simington on 02 8235 9704.