Issue 2: Validity of Condition 98
46As its terms make clear, Condition 98 obliges the Academy to dedicate to the Council, free of cost, that part of the Site that is identified as the proposed local road. That requirement relevantly engages the provisions of both ss 94 and 94B of the EPA Act. Section 94(1) provides:
"(1) If a consent authority is satisfied that development for which development consent is sought will or is likely to require the provision of or increase the demand for public amenities and public services within the area, the consent authority may grant the development consent subject to a condition requiring:
(a) the dedication of land free of cost, or
(b) the payment of a monetary contribution,
or both."
47Section 94B(1) relevantly provides:
"(1) A consent authority may impose a condition under section 94 ... only if it is of a kind allowed by, and is determined in accordance with, a contributions plan (subject to any direction of the Minister under this Division)."
The Council does not contend that there is any direction given by the Minister relevant to the determination of the present issue.
48It is now well settled that s 94, coupled with the requirement for a contributions plan made in accordance with s 94AE, provides the sole source of statutory power to impose a condition of development consent either requiring the payment of a monetary contribution or requiring the dedication of land. That statement of principle was first articulated by a judge of this Court in Fitch v Shoalhaven City Council [1987] 67 LGRA 165. It was further articulated in the judgments of the Court of Appeal in Fairfield City Council v N & S Olivieri Pty Ltd [2003] NSWCA 41. In that case Spigelman CJ said at [22]:
"22. The qualifications and restrictions found in s 94, notably the 'reasonableness' restriction in s 94(2) and the public requirements for the promulgation of a contributions plan, do lead to the conclusion that s 94 is the exclusive power for conditions of the character specifically identified in s 94 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."
49In Maitland City Council v Anambah Homes Pty Ltd [2005] NSWCA 455; 64 NSWLR 695, Spigelman CJ provided a rationale for the decision expressed in Olivieri. At [15] he said:
"15. The conclusion that s 94 constitutes an exclusive power for the imposition of a condition requiring the dedication of land, as I pointed out in Fairfield City Council v N & S Olivieri Pty Ltd [citation omitted], is based on the application of a principle of statutory interpretation, expressed by Dixon J in one formulation in Anthony Horden & Sons Ltd v Amalgamated Clothing & Allied Trades Union of Australia (1932) 47 CLR 1 at [7], subsequently frequently applied, in the following way:
' ... When the Legislature explicitly gives a power by a particular provision which prescribes the mode in which it shall be exercised and the conditions and restrictions which must be observed, it excludes the operation and general expressions in the same instrument which might otherwise have been relied upon for the same power."
Observations to similar effect were made in that case by Tobias JA at [132] and [150]. The latter observation was made in the context of excluding a power of the kind presently sought to be exercised in reliance upon the more general power to impose conditions contained in s 80A of the EPA Act.
50In essence, the Academy identifies the absence of any need for the new road created by the development of the Site for a school, together with the absence of any identified requirement in the Contributions Plan for a monetary contribution or dedication of land, consequent upon the development for the purpose of an educational establishment. In those circumstances it contends that neither the provisions of s 94(1) nor the requirement imposed by s 94B(1) were satisfied with the consequence that Condition 98 was not validly imposed.
51Further, the Academy points to the fact that, at the time at which the Consent was granted, the DCP did not contain any provision requiring the dedication of new roads identified in Section 3 of that Plan.
52The Council accepts that s 94, applied in accordance with the principles I have discussed, is the sole source of power to compel, by condition, an applicant for development consent to dedicate land for a public purpose free of cost. However, it contends that such a constraint upon the imposition of a condition does not apply where dedication is volunteered by an applicant for consent. In the present case, the Council contends that upon the proper analysis of the Academy's development application and supporting material, it volunteered the dedication of the new local street.
53As I have earlier recorded, the development application for the Site was lodged with the Council in December 2010. Not only was the application accompanied by architectural drawings, it was also accompanied by a Statement of Environmental Effects (the SEE). In the course of its submissions, the Council has referred to a number of passages in the latter document from which it contends that, properly understood, the Academy should be seen as intending the dedication of the new local street as an aspect of its application for development consent.
54The Council's reliance upon the terms of the SEE accompanying the development application is predicated upon a number of references within the document to the provision of the local road on the northern section of the Site in accordance with the DCP. For example, the following appears beneath an excerpt from the DCP layout plan enlarged to show the Site and its immediate environs:
"Excerpt from North Kellyville Precinct Indicative Layout Plan (Figure 2), showing, inter alia, a 'Road' running along and within the northern section of the site. This road is designated 'Local Street' in the DCP, and is to serve the site as well as properties to the west, including the Moran development site. Foxall Road is designated 'Collector Street'."
55The SEE also seeks to identify the manner in which the school development as proposed met the requirements of the DCP, in the form that the DCP then took. When addressing Section 2 of the DCP, the author of the SEE at p 50 states that the proposal "allows for all future roads, cycleways, roadside plantings and water quality measures as envisaged by the Indicative Layout Plan". Reference is made to the "future provision for a new Local Street running along the northern section of the site."
56On the same page of the SEE, Section 3 of the DCP is addressed. Against that reference, the statement is made that roadworks are proposed "in accordance with the road hierarchy and concept road designs" as outlined in the DCP. Further, in the conclusion to the SEE the following statement is made by the author:
"A common roads and drainage strategy is proposed for both the Moran aged care development site and [for the Site] in order that the two properties can be developed in a coordinated manner that will give effect to the local road system set out in the Indicative Layout Plan of the North Kellyville DCP."
57A number of other statements to similar effect are identified by the Council. For reasons that will shortly become apparent, it is unnecessary to refer to all of these statements. It is sufficient to note for present purposes that no statement is made, in terms, that the land required for the new local street across the northern section of the Site was to be dedicated, free of costs, to the Council.
58The Council also relies upon notations on the architectural drawings in support of the inference to be drawn that dedication of the new local street was intended by the development application. In particular, it relies upon the following:
(i) the identification of that road, conformably with the DCP, as "Future New Road";
(ii) the notation against the 'adjusted' northern boundary with the words "proposed boundary after Local Road built"; and
(iii) reference to the proposed future pedestrian and emergency vehicle entry to the Site from the "Future New Road".
The Council submits that the only inference to be drawn from statements of this kind is that the road would be provided by the Academy to the Council as a public road.
59Having considered the statements to which the Council has drawn attention in the various documents to which it has referred, I cannot conclude that there is expressed a clear intention on the part of the Academy to dedicate the road free of cost to the Council. There can be no doubt that the Academy indicated its intention not only to provide for the road, in the sense that no development for or associated with the school was intended within the area identified for that road, but also that it would construct the road in order that it be available for public road use when title to it was acquired by the Council as a roads authority. So much is made manifest not only by the statements made, read as a whole, but also by dint of the fact that plans submitted to the Council included engineering drawings for road construction. Statements to the effect that "provision" would be made for the new road identified in the DCP must be considered in the context of a control plan that did not identify an obligation to dedicate new roads identified in that plan free of cost. Whether such obligation could be imposed would depend upon the nature and effect of the development being determined.
60Although I have not been persuaded that, properly considered, the development application and accompanying documents initially lodged with the Council manifested an intention to dedicate the new northern road to the Council, on the most charitable view of the Council's contention, it might be said that the statements upon which reliance is made created uncertainty as to the Academy's intention in this regard. Importantly, any such uncertainty was removed by events that occurred prior to the determination of the development application by the JRPP on 10 November 2011.
61The Academy's development application was first considered by the JRPP on 1 September 2011. A report recommending conditional approval of the application was prepared by the Development Assessment Coordinator of the Council for consideration by the Panel. In that report reference is made to the construction of the new local street along the northern boundary being undertaken as part of the development. Under the heading "Civil Works" the report states:
"The reconstruction of Samantha Riley Drive along the site's frontage to the same is included under Section 3.5.3 of Council's Contribution Plan 13. The reconstruction of Foxall Road and the construction of the new 'local road' located wholly within the subject site adjacent to its northern boundary is not included under Section 3.5.3 of Council's Contribution Plan 13 and therefore it is the responsibility of the developer to provide for the construction (or reconstruction) of these roads as per Section 3 of the DCP and Section 3 of Council's Contribution Plan 13.
Notwithstanding the above, the reconstruction of Foxall Road and the construction of the new "local road" are necessary infrastructure upgrades required to be provided as part of the subject development in any case in order to provide for the additional vehicular and pedestrian traffic generated by the same.
The new "local road" is located wholly within the subject site adjacent to its northern boundary and therefore the developer is responsible for the full width construction of this road."
The report also attached proposed conditions of development consent, including Condition 98.
62On 1 September 2011 the JRPP deferred consideration of the Academy's development application. It identified a number of matters that required further attention, including the provision of further pedestrian and traffic management information. The request for the latter topic to be addressed resulted in the preparation and submission of the Traffic and Pedestrian Management Plan identified in Condition 48A of the Consent to which I have earlier referred.
63Following the decision of the JRPP to defer consideration of the development application, the report that had been prepared for the Panel, including the proposed conditions of consent, together with the Panel's further requirements were notified to the Academy and its consultants. By letter dated 21 October 2011, the architects retained by the Academy wrote to the Council stating that while the Academy was prepared to construct the road, it was not prepared to dedicate the proposed local road to the Council, free of cost. The letter indicated that upon completion of construction no objection would be raised to the acquisition of the local road. The architect's letter further stated that pending acquisition the Academy was prepared to negotiate to provide an easement across the road so as to accommodate development on the Moran Site.
64A further response was provided to the Council on behalf of the Academy. It reiterated that dedication of the constructed road was not intended. The response continued:
"[T]he application does not require access or use of the public road for the development and hence there is no nexus between the public road and the development. Any need for a road is satisfied by its construction as proposed in the application - dedication as a public road has nothing to do with the development. If it is necessary to provide easements of access and drainage for the Moran Development, that can be negotiated with Moran. If it is necessary to provide a drainage easement to Moran and Council, that too can be provided, so long as the easements are extinguished immediately before acquisition of the land by Council. As well, the imposition of the condition is unreasonable. The land required to be dedicated free of cost is the applicant's land, but there is no s. 94 plan to support the condition. The dedication requirement is therefore contrary to s. 94 and is not supported by s. 80A(1) because it extends beyond the carrying out of works authorized by s 80A(1)(f) and is not authorized to be imposed by s 80A(h) [sic]. There is therefore no legal authority for the condition."
65A further report was prepared by the Council's Development Assessment Coordinator for the meeting of the JRPP held on 10 November 2011. That report included reference to the Traffic and Pedestrian Management Plan which had been received and recommended its incorporation as a condition of development consent. The report also made clear that the Academy opposed the dedication of the proposed new local street free of cost by referring to and quoting extensively from the response received by the Council from the Academy or those acting on its behalf. Notwithstanding those responses, the author of the report to the JRPP recommended the imposition of Condition 98.
66I mention these matters in some detail because the development application relevant to be considered must be that which was propounded at the time at which it was determined. Whatever uncertainty may have existed as to Academy's intention for the new local street prior to September of 2011, by 10 November it was abundantly clear that dedication free of cost did not form part of the Academy's development application. The report to the meeting of the JRPP on 10 November, accurately stating the Academy's position in this regard, left no doubt as to the understanding that the JRPP must have had at the time of making its decision.
67The Council accepts that the time at which the application and its detail is to be understood is at the time of determination of the development application. However, it submits that the position articulated in the responses made by the Academy between September and November 2011 manifested a proposed amendment to the development application to which the Council had not consented in accordance with cl 55 of the Environmental Planning and Assessment Regulation 2000.
68I do not accept that submission. I have earlier determined that the development application as initially submitted did not manifest an intention to dedicate the area of the new local street and, to the extent that its position was ambiguous, the statements made by or on behalf of the Academy in the latter part of 2011 did no more than clarify its position. Those statements did not have the affect of amending the development application.
69It follows that the Council has not made good its submission that the Academy volunteered to dedicate the new local street free of cost to the Council. The facts simply do not support that conclusion. However, even if, contrary to my findings, dedication of the new local street was an element of the development application, that circumstance would not enliven the power to impose Condition 98.
70The power to impose a condition of development consent is found in s 80A of the EPA Act. As cases such as Olivieri and Anambah make clear, the power to impose a condition requiring dedication of land is constrained by s 80A(1)(h) to one "authorised to be imposed" (relevantly) by s 94. The fact that dedication of land may be volunteered does not authorise the imposition of a condition requiring dedication if that obligation cannot be sustained by reference to s 94, as qualified by s 94B(1).
71In Sanctuary Investments Pty Ltd v Baulkham Hills Shire Council [2006] NSWLEC 733; 153 LGERA 355, Jagot J was required to consider the interrelationship between the provisions of the EPA Act relating to voluntary planning agreements and those relating to the imposition of conditions requiring the payment of a monetary contribution. The applicant in that case had proposed the payment of a substantial sum towards acquisition of land in an adjoining local government area. The land to be acquired was intended as an offset area to compensate for the loss of a threatened ecological community on the land proposed to be developed. The applicant proposed that a condition of development consent be imposed upon it under s 80A(1)(a) in order to secure payment of its intended monetary contribution. In the alternative, it proposed to enter into a voluntary planning agreement to give effect to its intended contribution towards acquisition of the off-set site.
72The development application by Sanctuary was refused on merit grounds. However, in the course of giving her judgment, Jagot J made the following observations at [45]:
"Given the applicants' offer, the question of the extent of power available under s 80A does not arise. Nevertheless, it is appropriate that I record that I do not accept the applicants' arguments about the capacity to impose such a condition absent the offer to enter into a planning agreement ... . Absent the provisions relating to planning agreements, s 94 was the exclusive source of power for a consent authority to impose conditions requiring the payment of money [Olivieri, Anambah and Fitch are cited in support of that proposition]. The applicants' offer is to pay a monetary contribution, albeit to another council. The fact that the condition is not one authorised by a Contributions Plan and that the money will be expended outside the area of Baulkham Hills Shire Council does not mean that the condition is free from the constraints imposed by the scheme of s 94, and able to be imposed under s 80A(1). Contrary to the applicants' submission, s 80A(1)(a) is not a source of residual power to impose conditions requiring payment of money outside the scheme of s 94 ... .
The scheme is also not ousted by the applicants' agreement to the condition. The provisions relating to planning agreements turn on the developer's agreement, but agreement cannot give the consent authority power it does not have under the statute."
73Her Honour's observations are, with respect, apt to be applied to the present case. The Council did not contend that the statements made on behalf of the Academy in the SEE supporting the development application and the other documents to which it referred should be construed as an offer to enter into a voluntary planning agreement in accordance with s 93F of the EPA Act. In the absence of such an agreement the imposition of Condition 98 cannot be sustained on the basis that it was impliedly accepted by the terms in which its development application was submitted to the Council. It can only be sustained if sanctioned by s 94.
74As I understood its submission, the Council sought to rely upon the decision of Sheahan J in Conquest Constructions (NSW) Pty Ltd v Sutherland Shire Council [2011] NSWLEC 52; 184 LGERA 1 in support of its contention that an aspect of a development application proposing dedication of land may, by dint of that fact, be the subject of a condition of development consent. In that case, his Honour upheld the validity of a development control plan in which a new public laneway was identified as passing through land being developed by the applicant. The development control plan contained no provision stating the manner in which the laneway was to be created when land on which it was to be located was the subject of a development application. Conquest proposed its creation as a component of its development application. By proposing the laneway, Conquest derived planning benefits for its proposed development. Dedication of the area of the laneway was not mandated by a condition of development consent.
75I do not find the decision in Conquest to be of any assistance to the Council in the present matter. The decision in that matter turned upon the provisions of the EPA Act pertaining to the making of a development control plan. It did not involve any determination as to the power to impose a condition requiring the dedication of land that was not founded upon s 94 of the EPA Act. Unsurprisingly, having regard to the issues agitated in that case, no reference was made to the observations of Jagot J in Sanctuary Investments Pty Ltd v Baulkam Hills Shire Council. As I have already indicated, the observations there made and which I have cited are those pertinent to the present matter.
76In order to engage the power to impose Condition 98 of the Consent, it is necessary that the dedication of land was required because the school proposed by the Academy would, or was likely, to increase the need for the new local street (s 94(1)) and that a Condition to that effect was of a kind "allowed by and determined in accordance with" a Contributions Plan. On the evidence before me, neither requirement was met.
77In order to fulfil the requirement of s 94(1) it is necessary that there be a nexus between the development proposed and the contribution or dedication required. Relevantly, that nexus requires that there be identified a need or likely need for the new local street consequent upon development of the Site for a school, taking account of the conditions that circumscribe the manner in which that development may be carried out. The requirement is appropriately summarised in the Control Plan when it states that "the works and facilities [in this case, land dedication] to be provided must be a direct consequence of the development on which the contributions are levied."
78When reporting to the Council upon the Academy's present application for modification of the Consent, the Council's Development Assessment Coordinator stated that it would be "preposterous to suggest that the road will not service the school". That statement appears to be supported by the observation that "(p)arents, students, teachers and bus services will utilise the section of [the new local road] regardless of whether there is a formal pedestrian or vehicular access from the school to this road."
79The rationale for the Assessment Coordinators statement would appear to overlook the detail of the development to which the consent relates and the conditions circumscribing use. The Traffic and Pedestrian Management Plan identified in Condition 48A limited all access to and egress from the Site to Foxall Road. Moreover, it was not suggested that the parking provision made on site together with the set-down/pick-up facilities, all accessed from Foxall Road, were inadequate such that on-street parking would be required. Bus bays are also provided in Foxall Road with student or pedestrian access also confined to that road.
80The position advanced by the Council overlooks the fact that the possibility of community benefit as well as benefit to those resorting to the school is not sufficient, of itself, to engage the provisions of s 94(1). The need for something more than "benefit" was recognised by Tobias JA (Mason P and Young CJ in Eq agreeing) in Lake Macquarie City Council v Hammersmith Management Pty Ltd [2003] NSWCA 313; 132 LGERA 225 where, addressing s 94(1), his Honour said at [41]:
"41. Although I accept that it is necessary for the statutory phrase to be read in context, I cannot accede to the proposition that the word 'require', especially when used in conjunction with the expression 'increase the demand for', means no more than 'will benefit from'. Both statutory phrases - 'require the provision of' and 'increase the demand for' - require the decision-maker to focus on the particular development and to then ask what types of public amenities or public services that development will or is likely to require the provision of or increase the demand for. The Council's approach concentrates on the identification of a particular public amenity or public service and then asks whether the particular development is capable of benefiting from it. This, in my opinion, shifts the emphasis from what was intended by the drafter of the provision.
42. I therefore have no difficulty in attributing the concept of 'need' to the word 'require' in the first limb as well as to the expression 'increase the demand for' in the second limb of the statutory phrase."
81I have earlier recounted, more than once, those details of the development for which consent was obtained, indicating that implementation of the Consent did not give rise to any need to dedicate the new local street as a public road. The use of the Site for school purposes in the manner proposed by the consent quarantined that use from any need for that road. That those resorting to the Site may have derived some benefit from the existence of the road, as a public road, is not to the point. The requirement to engage s 94(1) of the EPA Act in order to sustain the imposition of Condition 98 is not satisfied.
82A number of provisions of the Contributions Plan have earlier been identified by me. Those provisions are relevant to the requirement that any contribution or dedication of land be of a kind allowed by and determined in accordance with a Contributions Plan. To those provisions earlier referenced I would add the provisions of Section 3 or Part C identifying specific facilities and their nexus to contemplated development. Importantly, cl 3.1 is headed "Residential Development Nexus" and sets out supporting information "for the demographic assumptions pertaining to the future resident population of North Kellyville". The Section adds support to the earlier provisions indicating that the purpose of the Contributions Plan is to identify monetary contributions or land dedication engendered by residential development.
83However, the critical provision for present purposes is cl 2.5 that I have earlier quoted (at [17]). That clause makes clear that the levying of contributions is to be made when determining "a development application for residential development". The development application lodged by the Academy was not an application of that kind. No other provision of the Contributions Plan identifies an entitlement on the part of the Council to levy a contribution or seek dedication for development of land for the purpose of a school. Moreover, the Plan provides no formula for calculating contributions to be made by a school.
84It follows that the imposition of Condition 98 cannot be sustained by reference to s 94B(1). Even if I was incorrect in determining, as I have, that the relevant nexus required by s 94(1) has not been demonstrated, the absence of a Contributions Plan providing for the dedication sought by the Council is fatal to the lawful imposition of Condition 98.