Anambah Homes Pty Limited v Maitland City Council

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

41296 of 2004 Anambah Homes Pty Limited v Maitland City Council

JUDGMENT 1 Her Honour: I handed down the first part of my judgment in Anambah Homes Pty Limited v Maitland City Council [2004] NSWLEC 615 ("Anambah No 1") on 13 December 2004. In that judgment I held that condition 36 of the Stage 18 Consent granted by the Council to the Applicant was invalid but left open the question of: Whether, if one or more of the conditions 34, 35 and 36 of the Development Consent were declared or found to be invalid and/or were severed from the Development Consent pursuant to the power of modification contained in s 96 of the EP&A Act, the development thus constituted by the modified development consent would be substantially the same development as that for which the Development Consent was originally granted.

I referred to this as question 5 in Anambah No 1 . I will deal with question 5 in relation to condition 36 in this judgment. Depending on how I answer this question it may be necessary for me to further consider conditions 34 and 35 of the Stage 18 Consent.

Question 5: The Severability of Condition 36 The Parties' Submissions 2 The Council submitted that, applying Greek Australian Finance Corporation Pty Limited v Sydney City Council (1974) 29 LGRA 130 ("Greek Australian Finance Corporation") and Kriticos v Parramatta City Council (1971) 21 LGRA 404 which was affirmed in Parramatta City Council v Kriticos [1970] 1 NSWR 327 ("Kriticos"), condition 36 is not severable as it is an essential aspect of the development consent granted by the Council. In this regard the Council took the Court to the Maitland City Council Aberglass/North Rutherford Development Control Plan No 9 ("the DCP"), the Council's 1996 Bicycle Plan ("the Bicycle Plan"), and the Minutes from the Council's Approval and Regulatory Committee Meeting held on 20 June 2000 ("the Council Minutes") to demonstrate why condition 36 was an important aspect of the development consent granted by the Council.

3 The Applicant argued that condition 36 is severable from the Stage 18 Consent. In this regard the Applicant argued that the Council Minutes and subsequent correspondence make it clear that Lot 1825, which is zoned Residential 2(a) under the Maitland Local Environmental Plan 1993 ("the LEP") but which is marked on the DCP as being "open space", could be purchased for value by the Council using the s 94 contributions paid by the developer which included a component for open space or recreation. The Applicant argued that if its challenge is successful and the condition is declared invalid and severable it will still be open to the Council to either purchase Lot 1825 by agreement, using the s 94 funds it has collected for that purpose, or to amend the LEP and rezone the land as open space and compulsorily acquire the land using the s 94 funds. The Applicant argued that as the dedication of Lot 1825 as open space could have been and still can be achieved by other means, condition 36 is severable from the Stage 18 Consent.

Finding 4 Condition 36 provides that: Lot 1825 shall be dedicated to the public as a reserve with the endorsement of the linen plan for precinct 18.

5 In Greek Australian Finance Corporation Holland J held that a condition of development consent requiring a monetary contribution to be paid to the council towards the provision of public car parking was invalid. His Honour then considered whether the condition in question was severable so that the consent should be declared to be valid and the void condition excised. His Honour concluded at p 144 that: In my opinion, the correct view to take in the present case is that the condition objected to was a fundamental element of the approval which the council gave, and that in dealing with the application the council proceeded on a false basis, either as to its powers to impose the condition, or as to its expectation that the applicant would voluntarily pay the contribution required. I think it is clear that the council has never considered or approved the application simply on the basis that no car-parking space was to be provided and no contribution in lieu thereof was to be made by the applicant. On this view the condition in question cannot, in my opinion, be struck out as severable and its invalidity renders the whole approval invalid. To borrow the language of Lord Morris in Kingsway Investments (Kent) Ltd v. Kent County Council [1971] A.C. 72, at p. 102, the condition was part "of the structure of the permission so that if the condition is hewn away the permission falls with it". See also Kriticos v. Parramatta City Council [(1971) 21 L.G.R.A. 404, at pp. 408-409.

6 In Kriticos the Court of Appeal applied Davies J in Kingsway Investments (Kent) Ltd v Kent County Council [1969] 2 QB 332 ("Kingsway") where his Honour said: But if … the invalid condition relates not to the development itself but to matters preparatory or introductory to the permission in its final form then the condition can be severed. 7 After the hearing in this matter I also asked the parties to make further written submissions, if they chose, in relation to the decision of Talbot J in Wechsler v Auburn Council (1997) 130 LGERA 134 ("Wechsler"). In that case Talbot J applied s 32 of the Interpretation Act 1987 to maintain the validity of the remainder of a development consent after deletion of a particular condition. His Honour distinguished the approach taken by Stein J in Randwick Municipal Council v Pacific-Seven Pty Limited (1989) 69 LGRA 13 ("Pacific-Seven"), who applied Kingsway to find that as a condition was fundamental to the decision to grant consent it could not be severed, because it did not appear that Stein J in Pacific-Seven had been referred to s 32 of the Interpretation Act 1987. Section 32 of the Interpretation Act 1987 provides that: (1) An instrument shall be construed as operating to the full extent of, but so as not to exceed, the power conferred by the Act under which it is made. (2) If any provision of an instrument, or the application of any such provision to any person, subject-matter or circumstance, would, but for this section, be construed as being in excess of the power conferred by the Act under which it is made: (a) it shall be a valid provision to the extent to which it is not in excess of that power, and (b) the remainder of the instrument, and the application of the provision to other persons, subject-matters or circumstances, shall not be affected. (3) This section applies to an instrument in addition to, and without limiting the effect of, any provision of the instrument or of the Act under which it is made. 8 Talbot J in Wechsler relied on Sloane v McDonald Industries (Sales) Pty Ltd (1989) 17 NSWLR 86 and Coleman v Gray (1994) 55 FCR 412 where Cole and Gummow JJ respectively held that the reasoning followed by Dixon J in Bank of New South Wales v Commonwealth (1948) 76 CLR 1 ("Bank of NSW") applied to provisions such as s 32 of the Interpretation Act 1987. In Bank of NSW Dixon J held at [84] and [85] that severability provisions cannot operate to conserve otherwise invalid instruments if it: … sufficiently appear[s] that the invalid provision forms part of an inseparable context …once it appears that the rejection of the invalid part would mean that the otherwise unobjectionable provision would operate differently upon the persons, matters or things falling under it or in some other way would produce a different result. 9 Talbot J held in Wechsler at p 137 that the comments made by Dixon J in Bank of NSW applied to s 32 of the Interpretation Act 1987 so that: The test so understood is that if severance results in the balance operating in a manner which is different to that in which the whole would have operated, then severance cannot be affected. Such a test is to be distinguished from the test derived from authorities analysed by Stein J in Pacific-Seven, namely, whether the condition under challenge relates to matters fundamental to the development or goes to the root of the planning permission itself. Although the answer to some factual situations could be the same, the application of the different tests will not always bring about the same result. 10 The Council argued that the correct test was that propounded in Greek Australian Finance Corporation. However, the Council noted that in the circumstances of this case the result will be the same regardless of whether the test applied is that propounded in Greek Australian Finance Corporation and Kingsway as applied in Kriticos or that propounded by Talbot J in Wechsler, as condition 36 is not severable on either of these tests. 11 The Applicant argued that for the purpose of these proceedings it did not matter which is the correct test as, in any event, condition 36 is severable on both of these tests. 12 Wechsler has been considered subsequently in this Court in MLC Properties v Camden Council (1997) 96 LGERA ("MLC Properties") and Hutchison 3G Australia Pty Limited v Waverley Council (2002) 123 LGERA 75 ("Hutchison 3G"). In MLC Properties Lloyd J held that although there was "some force" in a submission made that Wechsler was wrongly decided as s 32 of the Interpretation Act 1987 did not apply to a development consent, he was: not prepared to depart from the findings of Talbot J in Wechsler, namely, that a notice of determination issued in the prescribed form under s92(1) of the Environmental Planning and Assessment Act is an instrument as defined in s3 of the Interpretation Act.

Further, Lloyd J in MLC Properties followed the test for severability adopted by Talbot J in Wechsler , holding that he was "not sufficiently persuaded that the approach of Talbot J was so obviously wrong that I should depart from it."

13 In Hutchison 3G Cowdroy J noted at [36] that the tests applied by Talbot J in Wechsler and Stein J in Pacific-Seven: … are divergent. The approach in Wechsler inquires whether the consent is able to operate in the same way as it would have without the invalid condition. The test applied by Stein J in Pacific-Seven inquires whether the condition sought to be severed is fundamental to the consent.

However, Cowdroy J did not ultimately decide between these two tests in Hutchison 3G as he found that the impugned condition was severable under either test. 14 The evidence shows that the Stage 18 Consent grants consent for the subdivision of the final stage of a large residential development, consisting of seven housing precincts, being carried out by the Applicant. Residue Lot 1825 is to be created on registration of the plan of subdivision. As set out above condition 36 requires that Lot 1825, which is identified as "open space" in the DCP, be dedicated to the public as a reserve. The DCP sets out the form of subdivision, including open space, for the whole of the Aberglasslyn/North Rutherford urban release area. Residue Lot 1825 is the only area of public open space identified by the DCP within the subdivision area approved by the Stage 18 Consent. It is part of a wider corridor of public open space identified in the DCP adjacent to the urban release area. The importance of having this land reserved for public open space is clear and I am satisfied that the Council granted the Stage 18 Consent on the basis that this would occur. However, this does not resolve the question of whether the Council envisaged, as the Applicant argued, that it would acquire the land for value rather than requiring its dedication free of cost in a manner which I have held to be invalid.

15 The development application lodged by the Applicant did not propose that Lot 1825 be used as open space or as a reserve or that Lot 1825 be dedicated to the Council for that purpose. The development consent was granted on 27 June 2000. The Council Minutes dated 20 June 2000 note that: In conjunction with the previous stages of the subdivision, the developer has paid contributions in accordance with the Council's adopted Section 94 Contributions Plan, including a component for open space/recreation. These contributions will be used to purchase the land identified under the Development Control Plan as "Open Space". In relation to the subdivisions currently before the Council this area is shown as Lot 1825 in Precinct 18. … …

The proposed development is in accordance with the zoning of the land and the future development of this area of North Rutherford as a residential estate as indicated under DCP No. 9. The proposed development is therefore considered to be in the public interest in providing residential land in serviced and established areas at minimal cost to the community. …

There are no financial implications should Council resolve to determine the development applications in their submitted form. … … In summary, the proposed subdivision is considered to comply with the objectives of the 2(a) Residential Zone under the Maitland Local Environmental Plan 1993 and the [DCP] … and is recommended for development consent.

16 In my view, the Applicant's submission is correct and the Council Minutes make it clear that the development consent was granted on the basis that the Council would acquire Lot 1825 for value, using the s 94 contributions provided by the Applicant. In Anambah No 1 I held that condition 36 does require the dedication of Lot 1825 to the Council for free and is accordingly invalid as the applicable contributions plan, the Maitland City Council s 94 Contributions Plan dated September 1995, did not provide for this. Thus the condition does not reflect the intention of Council at the time the consent was granted, namely, that Lot 1825 was to be acquired for value. 17 Question 5 was worded so that the question posed was whether, if condition 36 was severed, the development was substantially the same development. I answer that question in the positive as I am satisfied that: (a) If the test adopted by Talbot J in Wechsler is the correct test that test is met by condition 36 as, at the time the consent was granted, the intention of Council was that Lot 1825 was to be acquired for value. The deletion of condition 36 does not therefore result " in the balance operating in a manner which is different to that in which the whole would have operated" as it is still open to the Council to acquire Lot 1825 for value either by negotiation or by re-zoning the land appropriately and exercising its compulsory acquisition powers. (b) If the test adopted by Stein J in Pacific-Seven is correct that test is also met by condition 36 as if, at the time the consent was granted, the intention of Council was that Lot 1825 was to be acquired for value, condition 36 cannot be regarded as relating to matters fundamental to the development or going to the root of the planning permission itself. It is accordingly unnecessary for me to decide between these two tests as, in any event, I am satisfied that condition 36 is severable and that the development consent can stand once this invalid condition is deleted. 18 I have held that condition 36 of the Stage 18 Consent is both invalid and severable as a consequence of my finding that s 101 of the Environmental Planning and Assessment Act 1979 ("the EP&A Act") did not prevent a challenge due to manifest jurisdictional error. The issue then arises whether conditions 34 and 35 of the Stage 18 Consent are valid or not and, if they are not, whether they are severable. It was not argued before me as the focus of argument was condition 36 if I found condition 36 could be challenged as I have, whether s 101 of the EP&A Act bars the Applicant from challenging conditions 34 and 35. I am not certain whether my finding that, despite s 101, the Applicant is not barred from challenging the validity of condition 36 of the Stage 18 Consent also allows the Applicant to challenge conditions 34 and 35 of the Stage 18 Consent. On the assumption that it does and the Applicant can now challenge conditions 34 and 35 of the Stage 18 Consent I will consider this question.

Question 3: The Validity of Conditions 34 and 35 Background 19 Conditions 34 and 35 provide that: 34. 2m wide shared pedestrian/cycleways are to be constructed in accordance with Austroads "Guide to traffic engineering practice, part 14 (Bicycles), 1999" along the proposed pathways between lots 1816 and 1815, 1802 and 1803. From there to Denton Park Drive at the eastern side of lot 1825, across Denton Park Drive, including a cycle refuge to clause 6.7.2.3(b) and fig 6.34. Then along the eastern alignment of the length of lot 1825 in a southerly direction to abut lot 1490 on DP1005639 at the South eastern corner of lot 1825. A second similarly constructed cycleway shall be constructed to intersect with Adam Avenue at the location of the frontage of lot 1825 and to intersect with the first cycleway and then to continue and abut to the boundary of lot 1490 on DP1005639.

35. Where cycleways intersect with public roads, the cycleway shall be detailed in accordance with Council's standard drawing SD73.

20 As set out in Anambah No 1 question 3 which I was asked to determine is as follows: 3. Whether conditions 34 and 35 are invalid having regard to the provisions of: (i) s 94 of the EPA Act; (ii) the Respondent's Contributions Plan 1995;

Particulars (a) the contributions determined by condition 16 of the Development Consent are conditions relating to citywide cycleways; (b) the works required to be carried out pursuant to conditions 34 and 35 are in respect of local cycleways relevant to the land contained in the development consent.

The Parties' Submissions 21 The Applicant argued that conditions 34 and 35 of the Stage 18 Consent were invalid as they required the provision of a material public benefit, being the cycleway, in circumstances where the contributions required by condition 16 already included a component for the provision of the cycleway. Condition 16 provides as follows: The payment of a monetary contribution in accordance with Council's policy adopted on the 1st September, 1995 for the Provision of Recreational Open Space, Recreational Facilities and Community Facilities for land within the Maitland Local Government Area as follows:

City Wide 1. Community Amenities & Services $31,512 2. Recreation & Open Space $12,240 3. Cycleway $ 2,880 6. Urban Roads $ 1,224 8. Administration $ 3,528 West Sector 1. Recreation & Open Space $13,728 Total $65,112

22 The Applicant argued that s 94(5)(b) of the EP&A Act only allows the imposition of a condition requiring "the provision of a material public benefit (other than the dedication of land or the payment of a monetary contribution)" where the provision of that benefit is "in part or full satisfaction of a condition imposed in accordance with subsection (1)". Accordingly, the Applicant argued that conditions 34 and 35 could only be valid where the cost of providing the cycleway was to be deducted from the amount provided in condition 16 and this was clearly not possible as the cost of the cycleway would greatly exceed the sum of $2,880.

23 Further, the Applicant argued that s 80A(1)(f) of the EP&A Act was not broad enough to allow the imposition of conditions such as 34 and 35 independently of s 94 of the EP&A Act. Section 80A(1)(f) provides that: A condition of development consent may be imposed if … it requires the carrying out of works (whether or not being works on land to which the application relates) relating to any matter referred to in section 79C (1) applicable to the development the subject of the consent.

24 The Applicant argued that the reasoning of the Court of Appeal in Fairfield City Council v N & S Olivieri P/L [2003] NSWCA 41 ("Olivieri") where the Court held that conditions requiring the expenditure of money by the developer could be imposed under s 80A(1)(f) did not apply to conditions 34 and 35. In Olivieri there was no relevant contributions plan covering the works required by the relevant condition. In this case the Maitland City Council s 94 Contributions Plan made provision for the payment of developer contributions towards the cost of the cycleway, as part of the Maitland cycleway strategy, and condition 16 required the Applicant to pay a contribution pursuant to the plan.

25 The Council argued that the reasoning adopted by the Court of Appeal in Olivieri applied to conditions 34 and 35 and, accordingly, conditions 34 and 35 could be imposed under s 80A(1)(f) of the EP&A Act despite a condition being imposed under s 94 of the EP&A Act.

Finding 26 In Olivieri one condition of the relevant development consent required the dedication of part of the relevant land as a public road. That land was paid for by the council and transferred to the council. The other part of the road was to be located on an adjoining lot already owned by the council. The contested condition of the development consent required the applicant to construct a road on this portion of the land. The applicant in Olivieri argued that it was not open to the council to impose any condition requiring the construction of the road in the absence of an approved contributions plan because of s 94(7) of the then EP&A Act (now contained in s 94(11) of the current EP&A Act) which provided that "… a council may impose a condition referred to in this section only if it is of the kind allowed by, and is determined in accordance with a contributions plan approved…" under the EP&A Act. The council argued that, provided the condition was imposed for a planning purpose, had a relevant nexus to the development and was reasonable in the circumstances, it was entitled to impose a condition requiring a developer to undertake work off site. 27 Cripps AJA, with whom the other judges agreed, considered that s 94 of the EP&A Act related to provisions which required the dedication of land or the payment of money and was exclusive in that regard. In other words, no condition requiring the dedication of land or the payment of money could be imposed other than in accordance with s 94 of then EP&A Act. However the Court rejected the argument that s 94 should be considered to be the exclusive source of the power to require the carrying out of works not the subject of the requisite development application. 28 Spigelman CJ held at [22] to [26] that: The qualifications and restrictions found in s94, notably the `reasonableness' restriction in s94(2) and the public requirements for the promulgation of a contributions plan, do lead to the conclusion that s94 is the exclusive power for conditions of the character specifically identified in s94 i.e. dedication of land or monetary contributions. To go beyond these express conditions and extend the exclusive nature of the power to conditions which may, in some way, be the commercial equivalent of a dedication of land, or the payment of a contribution, in my opinion, goes too far.

S91(3)(f), in terms, permits a condition for the "carrying out of works". The works must be related to matters referred to in s90(1). Although s90 contained a wide range of relevant considerations, this restriction, as Cripps AJA points out, is a significant restriction. No doubt, if a particular work, required to be carried out pursuant to such a condition, can be characterised primarily as the provision of a public amenity, then its connection with the development may not be regarded to be sufficiently close. However, that arises by reason of the proper construction of s91(3)(f), not by reason of the exclusion from the scope of s91(3)(f) of conditions falling within, or capable of falling within, s94.

There is, in my opinion, no warrant for reading down the reference to "works" in s91(3)(f) by giving the exclusive operation of s94 extended scope … …Where the Parliament has been as specific as this, this Court should be slow to read down the general words used by a process of implication.

An obligation to carry out works will, no doubt, usually be commercially equivalent to a 'monetary contribution' which enables a council to carry out the works itself. These may be circumstances where, as a matter of statutory construction, the court will conclude that what cannot be done directly, cannot be done indirectly .

29 Accordingly, the Court of Appeal held in Olivieri that a condition of consent requiring the construction of a road was validly imposed under the predecessor to s 80A(1)(f) of the EP&A Act. Olivieri is authority that a Council may impose a condition requiring work to be done for planning purposes related to a development on or off the land the subject of the development, in accordance with s 91(3)(f) of the EP&A Act as it then was. Section 80A(1)(f) of the current EP&A Act is in substantially the same terms as the repealed s 91(1)(f).

30 In Olivieri there was no s 94 contributions plan prepared. No condition requiring the payment of a monetary contribution towards the road was imposed. In this case the Maitland City Council s 94 Contributions Plan makes provision for the payment of developer contributions towards the cost of the cycleway and condition 16 has been imposed requiring the developer to pay a contribution of $2,880 for the cycleway in accordance with this plan. The facts of this case are different to those in Olivieri in that here there is a contributions plan which includes provision for the payment of money for cycleways generally. The Applicant submitted that given this, conditions 34 and 35 which require the developer to do works related to the provision of the cycleway, both on land the subject of the development consent and beyond that land, is in effect "double dipping".

31 Spigelman J in Olivieri held at [27] that: The general provisions of s 90(1), as they then existed, and to which a condition for the carrying out of works under s 91(3)(f) may attach are, in the words I have previously quoted from Nintendo above, "concerned with the adjustment of the competing rights, claims or obligations of persons in a particular relationship or area of activity". A valid condition with respect to s 90(1) considerations is, accordingly, unlikely to be characterised as a condition for the dedication of land free of cost or the payment of a monetary contribution "for the provision, extension or augmentation of … public amenities and public services" referred to in s 94(2)(b). The conditions imposed here cannot, in my opinion, be so characterised. 32 Cripps AJA held at [77]-[79] that: In my opinion s 94 only restrains the power of councils to impose conditions requiring the dedication of land free of cost or a monetary contribution. In my opinion it has no application to a condition requiring a developer to undertake work at its own expense (although, of course, such a condition to be attached would have to be relevantly connected to the development and not unreasonable in the relevant sense). In the present case I am prepared to assume that although the Council expressed no opinion about the matter it nonetheless held the view that the carriageway it required Olivieri to construct would, in due course, be used by members of the public and be of benefit to those users. The learned trial judge gave no reason why ss 91(3)(a) or 91(3)(f) were not, in the circumstance of the case, sources of power entitling the Council to impose condition 14. It appears to have been assumed by His Honour that if it be established that compliance with a condition imposed by Council would otherwise have the consequence that the public would benefit from it then such a condition cannot be imposed otherwise than pursuant to s 94. But that, in my opinion, that [sic] is not what the legislation says. The limitations on council's power to impose conditions relevantly connected to the development and reasonable in all the circumstances is limited by operation of s 94 to those conditions where the Council requires as a condition of consent dedication of land free of cost or a monetary contribution or both. 33 Based on this reasoning, conditions imposed pursuant to s 80A(1)(f) of the current EP&A Act are clearly permissible provided they are for planning purposes, are connected to the development application and are reasonable in the circumstances. The cycleway can be regarded as a public amenity connected to the development and I consider it is a matter about which conditions such as 34 and 35 may be imposed. 34 An issue of double dipping could arise, which would go to the issue of reasonableness at least, in the event that the Council obtained payment pursuant to a condition imposed under s 94 of the EP&A Act for works which it also required to be done pursuant to a condition requiring works to be done imposed under s 80A(1)(f) of the EP&A Act. It is not clear that is the case here and, if it was, I do not consider the monetary figure required by condition 16 renders conditions 34 and 35 unreasonable. I consider that conditions 34 and 35 are valid.

35 As I have not heard argument on costs I will reserve this question. Summary of Findings 36 In Anambah No 1 I held that s 101 of the EP&A Act does not bar the Applicant from challenging condition 36 of the Stage 18 Consent and that condition 36 of the Stage 18 Consent was invalid. I have now held that condition 36 of the Stage 18 Consent is severable from that consent and that the remainder of the Stage 18 Consent remains valid. Further I have now held that, assuming that s 101 of the EP&A Act does not bar the Applicant from challenging conditions 34 and 35 of the Stage 18 Consent, conditions 34 and 35 are valid.

Orders 37 The Court makes the following declarations and orders: 1. The question of costs is reserved.

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