Beaini Projects Pty Ltd v Cumberland Council

Land and Environment Court (NSW)|2019-10-21

Judgment

COMMISSIONER: At 108-120 Station Street, Wentworthville, development consent was granted for the demolition of existing structures and the construction of a 12-storey mixed use development accommodating 80 residential units and 6 commercial tenancies over three levels of basement parking. The consent was granted by the Court on 22 November 2018 after an agreement was reached between Beaini Projects Pty Ltd ("Beaini") and Cumberland Council ("the Council") following a conciliation conference held pursuant to s 34 of the Land and Environment Court Act 1979 ("the LEC Act"). The grant of development consent was subject to conditions. Those conditions include a requirement for the construction of a public road over land to be dedicated as a laneway, and for the payment of a monetary contribution. These proceedings are an application by Beaini to the Court to modify the consent by amending a number of the conditions, including by reducing the contribution payable. The application is made pursuant to s 4.55(8) of the Environmental Planning and Assessment Act 1979 ("the EPA Act").
The development consent also includes a Voluntary Planning Agreement ("VPA") which dedicates a 6.6m strip of land to the Council for the public laneway. The application to modify the consent, as amended in the course of the proceedings, seeks to amend the following conditions:

Condition 16, which requires the payment of a contribution pursuant to s 7.11 of the EPA Act, by reducing the contribution amount of $1,075,187 to $377,616.90.
Condition 48, which concerns the design for the construction of the public road along the laneway, by removing the requirement for an easement in favour of the Council and amending the design.
Condition 49, by removing the requirement to obtain owner's consent from an adjoining property to modify the drainage easement required.
Conditions 191 and 192, which concern drainage easements.
Condition 199 concerning the requirements for the laneway construction.

The site and its strategic planning context

The subject site comprises Lot B DP 410947 and is known as 108-120 Station Street, Wentworthville. It has an area of 1918m2 and is rectangular in shape, with a frontage to Station Street of 38.15m and a depth of 50.29m.
The site is burdened by a 3.66m wide right of carriageway along the full length of its northern boundary, which benefits the northern neighbouring site, 86 Station Street. A reciprocal right of carriageway along the southern side of number 86, also 3.66m in width, adjoins and benefits the site. A common bitumen driveway is currently constructed over the two rights of carriageway.
The subject site is located within the Wentworthville town centre and is approximately 300m from the Wentworthville railway station. Adjoining and nearby commercial development is a mix of commercial buildings of varying ages.
The Holroyd Local Environmental Plan 2013 ("HLEP 2013") applies to the site and, as at 5 August 2013, the site was zoned B2 Local Centre, with a maximum building height of 20m pursuant to cl 4.3 and a maximum floor space ratio ("FSR") of 2.2:1 pursuant to cl 4A.
In early 2015, a strategy to identify opportunities for the revitalisation and renewal of the Wentworthville centre was prepared, known as the Wentworthville Centre Planning and Place Making Strategy ("the Wentworthville Strategy"). The Wentworthville Strategy identified an opportunity for an extension to the laneway network in order to better manage vehicular traffic and limit congestion within Station Street and the centre of Wentworthville. The extension to the laneway network is shown in Figure 1. The new lane commences in Station Street along the northern side of 108 Station Street and heads north to connect with an existing lane, and then east to connect to Lane Street at the southern side of 13 Lane Street.
On 7 May 2015, the owners of the site lodged a Planning Proposal, which sought to amend the HLEP 2013 by rezoning a 6.6m wide strip of land along the northern boundary of the site from B2 Local Centre to SP2 Infrastructure, increasing the maximum building height from 20m to 29m for part of the site and 41m for another part of the site, and increasing the maximum FSR from 2.2:1 to 4.5:1.
The Planning Proposal was accompanied by a VPA for the dedication of the 6.6m strip of land to the Council. The intent of the VPA was to provide a public benefit by way of land dedication for a future public road, in the form of the laneway identified in Figure 1. In conjunction with a 1.4m strip of land to be provided on the southern side of the adjoining property at 86 Station Street, the Planning Proposal and VPA for 108 Station Street were consistent with the lane network proposed under the Wentworthville Strategy. On or around 29 March 2017, the VPA was executed by the parties.
On 22 June 2018, Holroyd Local Environmental Plan 2013 (Amendment No 16) was gazetted and came into force. Amendment 16 had the effect of amending the zoning and the building height and FSR development standards of the HLEP 2013 for 108 Station Street in the manner proposed in the Planning Proposal.
On the same date that Amendment 16 came into force, an amendment was made to the Holroyd Development Control Plan 2013 ("HDCP 2013") to insert site specific controls at Part J13 for 108 Station Street. Clause 13.2 of Part J gives a preliminary description of the land as containing two key parts, being (i) the development site and (ii) the laneway. Clause 13.3.1 provides further controls for the laneway. Control C1 provides that "the design, layout and alignment of the new laneway is generally to be in accordance with Figures 31 and 32, subject to a detailed design development in consultation with Council". Control C3 also provides that: "The new laneway is to incorporate the following elements as a minimum requirement: i. A total width of reservation = 6.6m ii. 800mm out of property boundary, both sides to be set aside for services, lights as well as footpath. iii. 2.5m travel lane width x 2"
Notably, nothing in the HDCP 2013 requires a developer of the development site to construct the road pavement along the length of the laneway at its own cost, or to the standard of a public road. The objectives of controls C1 and C3 include the following: "O2. To ensure the safe ingress and egress for vehicles using the laneway. O3. Ensure laneway design integrates with the ground floor uses of 108 Station Street and provide for pedestrian movement."
The HDCP 2013 also provides a number of general controls with respect to roads and access, car parking and stormwater management. These include the following controls with respect to roads and access, in Part A2.1: "C1. Construct and seal all driveways, accesses and car parking areas to Council's requirements. C2. Ensure all public engineering works comply with Council's Specification for Subdivisions and Developments (current version), unless as otherwise approved by Council."
At Part A2.2, the HDCP 2013 requires the following with respect to road geometry: "C1 Ensure that Road layout and geometry accords with approved standards such as the Austroads Guide to Road Design, or the Roads and Maritime Service's Guide to Traffic Engineering and supplements, and Australian Standards."
At Part A2.5, the HDCP 2013 requires the following with respect to concrete footpaths: "C1 For all new development within R3, R4 and business zones, construct a concrete footpath of a minimum 1.2m width and associated works along the street frontage(s)…"
Part A3.5 of the HDCP 2013 deals with internal roadways, driveways and other access, manoeuvring and layout controls. The Council acknowledges that it has limited application given that the laneway is to be dedicated as a public road. Nevertheless, the controls include the following: "C1. The minimum width for internal roadways that access internal parking areas/structures depends on the number of parking spaces and service bays served. Provide minimum widths for two-way traffic as detailed below… … Over 50 spaces or 25 spaces + service bay 6.0m - 8.0m" "C11. Provide the appropriate class of access driveway for each particular parking facility, taking into account: a) the land use category; b) the road frontage type; and c) the size of the parking facility."
The Holroyd City Council Works Specification Subdivisions/Developments ("Engineering Specifications"), requires that for road pavements, there must be a 150mm crushed or ripped sandstone sub-base course, a 150mm crushed rock base course and two 25mm courses of asphaltic concrete.

The development consent

By the decision of the Court in Beaini Projects Pty Ltd v Cumberland Council [2018] NSWLEC 1603, following the conciliation conference the consent was granted for the demolition of existing structures and the construction of a 12 storey mixed use development over 3 levels of basement parking, accommodating 80 residential units, 6 commercial tenancies and 129 parking spaces. The approved plans did not include a detailed design of the new laneway, but the plans showed an 8m wide future lane comprising the northern 6.6m of 108 Station Street (the subject of the VPA and now zoned SP2) and a further 1.4m of the adjacent property at 86 Station Street.
The consent (by conditions 14, 174, and 199) requires the dedication to the Council of the SP2 zoned land, a 4m x 4m splay at the intersection of the laneway with Station Street, and the 6.6m wide road and footpath along the new laneway. The conditions then specify the design work and construction work that is to be carried out on the land to be dedicated for the laneway, and in condition 199 makes it clear that all costs associated with the design and construction of the public road and footpath along the new laneway are to be borne by the developer.
The developer contribution of $1,075,187, contained in condition 16, is calculated from the Holroyd Section 94 Contributions Plan 2013 ("CP 2013"). The Council has reviewed the figure in condition 16 and concedes that the figure is miscalculated, and that the contribution should have been $1,064,108.90.

The statutory framework for a modification application concerning developer contributions

On the granting of a development consent, s 7.11 of the EPA Act gives the consent authority the power to impose a condition requiring the payment of a monetary contribution where it "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". Section 7.13(1) requires that such a condition be imposed "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 CP 2013 is the relevant contributions plan.

The power under s 4.55 of the EPA Act

The application to modify the monetary amount payable in condition 16 is made to the Court pursuant to s 4.55(8) of the EPA Act. Section 4.55(8) allows all of the provisions of s 4.55 to extend to enable the Court to modify a consent granted by it. As such, each of the powers in subss 4.55(1), (1A) and (2) are conferred on the Court. Section 4.55(1A) allows the modification of development consent for a modification of "minimal environmental impact", and is the relevant provision for the purpose of the present application.
The exercise of the power in subs 4.55(1A) requires the consent authority, in this case the Court, to be first satisfied that "the development to which the consent as modified relates is substantially the same development as the development for which the consent was originally granted".
The Council does not contend that it is not substantially the same, and I am satisfied that the proposed modified development is substantially the same as that for which consent is granted.
Upon reaching the satisfaction that "the development to which the consent as modified relates is substantially the same development as the development for which the consent was originally granted" and that the other matters in subs 4.55(1A) are satisfied, subs (3) provides that: (3) In determining an application for modification of a consent under this section, the consent authority must take into consideration such of the matters referred to in section 4.15(1) as are of relevance to the development the subject of the application. The consent authority must also take into consideration the reasons given by the consent authority for the grant of the consent that is sought to be modified.
Section 4.15(1)(a) of the EPA Act requires that the Court consider the provisions of any applicable environmental planning instrument, development control plan, planning agreement, certain draft instruments and regulations. This includes, in (iiia), "any draft planning agreement that a developer has offered to enter into under section 7.4".
On 16 October 2019, following an adjournment of the hearing and prior to the hearing resuming on 21 October 2019, Beaini submitted a formal offer to the Council to enter into a Planning Agreement ("draft VPA") to deliver works associated with the construction of the laneway. Pursuant to s 4.55(1A) and s 4.15(1)(a)(iiia), this is required to be considered on the modification application.
The power to modify a development consent under s 4.55 (formerly s 96) has been described variously as being a broad power that is "beneficial and facultative" (North Sydney Council v Michael Standley & Associates Pty Ltd (1998) 43 NSWLR 468 at [440]). The breadth of this power is described by Talbot J in City West Housing Pty Limited v Council of the City of Sydney [2002] NSWLEC 30 at [20] such that "Apart from the matters referred to in s 79C [now s 4.15], the exercise of the discretion is uncontrolled or fettered by any overriding principle except in the context of s 96 [now s 4.55] itself" (emphasis added).
On the basis of this broad discretion, Talbot J stated (in an appeal concerning a modification to delete a condition) at [21] that: "The Court accepts that it is able to consider whether condition 37 should be retained either on the basis of merit or principle" and "the appropriateness and efficacy of maintaining a condition of consent is an open question on the hearing of a s 96 appeal."
I consider that, for the same reasons, the question on the present application is whether condition 16 should be amended either on the basis of merit or principle. In that context, it is appropriate to consider the contents of the CP 2013 and apply it appropriately to the development the subject of the consent. Section 7.11(5)(b) is also relevant to the exercise of the Court's discretion, and provides as follows: (5) The consent authority may accept- (a) …, or (b) the provision of a material public benefit (other than the dedication of land or the payment of a monetary contribution) in part or full satisfaction of a condition imposed in accordance with subsection (1) or (3).

The power under s 7.13(3)

In addition to the broad power pursuant to the provisions of s 4.55 itself, on appeal the Court is given a broad power to disallow or amend a condition imposed under s 7.11. This power is contained in s 7.13(3) of the EPA Act as follows: (3) A condition under section 7.11 that is of a kind allowed by a contributions plan (or a direction of the Minister under this Division) may be disallowed or amended by the Court on appeal because it is unreasonable in the particular circumstances of that case, even if it was determined in accordance with the relevant contributions plan (or direction). This subsection does not authorise the Court to disallow or amend the contributions plan or direction.
Although the present proceedings are an application to the Court pursuant to s 4.55(8) and are therefore not proceedings "on appeal" within the usual meaning of the word, in Arkibuilt Pty Ltd v Ku-ring-gai Council (2006) 67 NSWLR 529, Jagot J (at [22]) determined that the power under s 7.13(3) extends to "any proceedings which the EPA Act allows to be brought to the Court with respect to the merits of a condition imposed under s 94 [now s 7.11]." She stated at [22] that "such proceedings are, relevantly, "appeals" within the meaning of s 94B(3) [now s 7.13(3)]", including applications made directly to the Court to modify a condition of development consent.
However, the broad power under s 7.13(3) can be exercised only if the condition under section 7.11 "is unreasonable in the particular circumstances of that case". In Colonial Credits Pty Ltd v Pittwater Council [2015] NSWLEC 188 ("Colonial Credits"), Moore J considered that the unreasonableness must find its basis "in the contributions plan's application to the site rather than in some other burden imposed on the beneficiary of the development consent where that burden is said to be unreasonable but has no foundation whatsoever in the contributions plan itself" (at [47]).

The Contributions Plan

The CP 2013 has the following executive summary: "To ensure that future developments are only levied for the demands generated, the cost of some facilities in this Plan is apportioned to account for demands of the existing population. However, where the demand for facilities is solely as a consequence of future development, the full costs of those facilities are to be borne by future development."
Clause 2.17 of the CP 2013 expressly contemplates the reduction of contributions amounts if benefits provided under a planning agreement (including works) are considered to be of a material public benefit. It provides as follows: "2.17 Offers of land, works or other material public benefits A person may make an offer to the Council to carry out works or provide another kind of material public benefit or dedicate land, in lieu of making a contribution in accordance with a condition imposed under this Plan. Any offer shall be made in writing to the Council. If the offer is made prior to the issue of a Development Consent then the offer must be made by way of a Planning Agreement, and the Council will consider the request as part of its assessment of the development application. In considering such a request, Council will give consideration to the following matters: (a) the value of the land to be dedicated, or the works to be undertaken, is at least equal to the value of the contribution that would otherwise be required under this Plan; and (b) the standard of the land or works is to council's full satisfaction; and (c) the provision of the material public benefit will not prejudice the timing or the manner of the provision of public amenities and services included in this Plan's works program. In accepting a material public benefit that is not an item identified in this Plan's works schedule, Council must be satisfied that the offer provides a substantial benefit to the community and that this benefit warrants Council accepting responsibility in fulfilling the intent of the Plan notwithstanding a reduction in expected cash contributions. If Council approves the offer then it will require the applicant to enter into a written agreement for the provision of the works, land or material public benefit or in a suitable time period. If the offer is made by way of a draft Planning Agreement under the EP&A Act, the Council will require the agreement to be entered into and performed via a condition in the development consent. The value of any works, land or material public benefit offered by the applicant may, at Council's discretion, be used to offset monetary contributions applicable to the development under this Plan. Also, where the Council or another Consent Authority requires as a condition of Development Consent an applicant to carry out works in relation to that development, and those works are listed in this Plan's works schedule, the Council may use the value of those works to offset the monetary contributions applicable to the development. The value of any works, land or material public benefit will be determined by a process agreed to between the Council and the applicant. Generally, the value of any works or land to be used as a basis for offsetting and monetary contribution requirement will be the indexed value of the works or land listed in this Plan's works schedule." (emphasis added)

Beaini's position on the reduction of the contribution

Beaini firstly relies on s 7.13(3) and submits that the contribution is unreasonable for the reason that the mechanism available through clause 2.17 of the CP 2013 allows for discounted contributions in the circumstances of the present development, but was not utilised. Beaini submits that the unreasonableness therefore finds its basis in the application of the CP 2013 to the site and the development.
On the submissions of Beaini, this has the effect of requiring a cumulative value of contributions levied under condition 16 and condition 199 of $2,122,109.80 (or $1,826,562.90 following the evidence), being the sum of the monetary contributions ($1,064,108.90) and the cost of design, construction, dedication and registration of the public laneway ($1,046,922.80 based on a quantity surveyor report, but reduced to $762,454 in evidence). Beaini submits that the development does not require the provision of, or generate an increase in the demand for, public services in the cumulative amount levied. In this regard, Beaini says that the cumulative value of the contributions significantly exceeds the demand for provision of public services, particularly with respect to public domain upgrades in the Council area. As such, it submits that the cumulative amount which the Council seeks to levy is not commensurate with a corresponding increase in demand for public amenities and services, and therefore does not reflect the actual impact of the proposed development on such facilities, contrary to the provisions of s 7.11 of the EPA Act.
Further, Beaini points out that it is unreasonable not to use the mechanism in clause 2.17 of the CP 2013 in circumstances where it is agreed that the construction of the laneway is a material public benefit, and where the development (and access to it) does not require the provision of, or generate an increase in demand for, the provision of a public road in the location and to the standard required by the conditions of consent.
Beaini's position is that the cost of carrying out the works for the laneway is significantly greater than had the development been accessible by a simple driveway. Beaini therefore submits that the monetary contribution should be reduced by the additional cost to Beaini of constructing the laneway to the standard required of a public road. That is, the difference in the cost of constructing the public laneway and constructing a driveway is the amount by which the contributions should be discounted to reflect the material public benefit provided by the construction of the laneway.
Secondly, as an alternative approach, Beaini submits that it would be appropriate for the Court to apply clause 2.17 of the CP 2013 in exercising its discretion in determining the s 4.55 application, and include a requirement for entry into a further Voluntary Planning Agreement in the terms of the draft VPA as a condition of development consent. The works contemplated by the draft VPA reflect the works identified in the approved construction certificate plan and additional works associated with the construction of the laneway. In light of the draft VPA, Beaini submits that it is appropriate to remove any condition which requires the delivery of the laneway adjacent to the site from the development consent, and to reduce the amount of contributions payable by the difference in the cost of constructing the works in the draft VPA and the cost of the construction of a standard driveway. In circumstances where the works contemplated by the draft VPA provide for a public laneway, make provision for infrastructure beyond what is required by the development, constitute a material public benefit, and are not levied for by the CP 2013, Beaini submits that it would be unreasonable to impose a contribution that required full payment of the contribution amount and not allow an offset as contemplated by the CP 2013 and s 7.11(5). The two conditions that are sought to be imposed on Beaini's alternate position are as follows: "15. Planning Agreement - Laneway construction Prior to the issue of any Occupation Certificate for the development the applicant (or person with the benefit of this consent subject to any novation of the planning agreement) is to enter into a Planning Agreement with Cumberland Council on terms generally in accordance with the letter of offer made on 16 October 2019 by Beaini Projects Pty Ltd." "132. Planning Agreement - Works and land dedication Prior to the issue of any occupation certificate for the development the applicant is to complete the works and land dedication required by the Planning Agreement (refer condition 15) between Beaini Projects Pty Ltd and Cumberland Council generally in accordance with the letter of offer dated 16 October 2019. Upon completion of the works the person with the benefit of the consent is to provide Cumberland Council with a full set of as built drawings and certification from a qualified engineer that the construction of the works satisfies the requirements of the relevant Australian Standard and National Construction Code requirements. Upon completion of the works required under the Planning Agreement and prior to any occupation certificate being issued for the development, the developer or person with the benefit of this consent is to provide Council with the certification identified in conditions 166, 175, 176, 177, 178, 179, 180, 181, 182, 186, 187, 188, 189, 190, 191 192, 193, 194, 195 and 204 In circumstances where Cumberland Council refuses to enter into a Planning Agreement with the Developer on terms generally in accordance with the letter of offer dated 16 October 2016, the following works are to be carried out and completed prior to the issue of any Occupation certificate for the development: a. Construction of a 1.8m wide footpath adjacent to the northern face of the building from Station Street to the rear of the site. b. Construction of a 175mm thick concrete driveway from Station Street to the entrance of the basement driveway c. Construction of a 175mm thick concrete driveway from the eastern side of the basement driveway to the rear of the site. d. The levels of the driveway are to be designed so as to generally align with the levels of the adjacent property (86 Station Street, Wentworthville) access way which exists at the time of the construction of the driveway. e. Construction of a road, for a width of 6.4 metres in front of the basement driveway access from the northern edge of the footpath to the northern boundary of the site. The levels of the road are to generally align with the levels of the adjacent pavement on 86 Station Street and are not to provide for a kerb and gutter on the northern edge of the roadway. The final levels of the area of road are to align with the concrete driveway levels on either side of the road. The area of road is to be constructed to a public road standard generally in accordance with Council specifications. At the completion of the driveway works, as built drawings are to be provided to Council in addition to certification from a qualified engineer that the construction of the works satisfies the requirements of the relevant Australian Standard and National Construction Code requirements."
Condition 132, as proposed by Beaini, contemplates that if the draft VPA is not entered into by the Council, a driveway will be constructed in lieu of the laneway.
I note that s 7.7(3)(a) is a source of power for imposing a condition that requires entry into a planning agreement, and provides as follows: (3) However, a consent authority can require a planning agreement to be entered into as a condition of a development consent, but only if it requires a planning agreement that is in the terms of an offer made by the developer in connection with: (a) the development application or application for a complying development certificate …
I also note that, in accordance with s 4.55(4), "a reference in this or any other Act to a development consent includes a reference to a development consent as so modified."

The Council's position that the Court cannot reduce the contribution

The Council contends that the Court's power to modify condition 16, pursuant to s 7.13(3), is not engaged in the circumstances of this case. The Council says that, contrary to the submission of Beaini, the basis of the unreasonableness is not the application of the CP 2013 but instead the burden of constructing the public laneway, as required by the conditions of the consent. As a result, the Council submits that this is not relevant unreasonableness for the purposes of s 7.13(3), consistent with the decision of Moore J in Colonial Credits.
The Council submits that I ought to follow the decision in Colonial Credits given the similarity of those circumstances to the present. In those proceedings, a condition was imposed which required the applicant to construct a separate drainage system, separate to intra-allotment drainage, for the purpose of conveying stormwater generated from the catchment above the site, through the site and to the creek below the site. Moore J considered that as the economic burden arose from the requirement to construct the drainage system, and not from the application of the contributions plan, there was no power to modify the contribution.
The Council submits that there are good policy reasons that the statutory power to amend the contribution payable is limited to the application of the contributions plan in this way. The Council submits that if the power extended to offsetting a burden of providing other infrastructure, then it would disrupt what it describes as "the carefully drawn statutory scheme for contributions planning". The Council says that it would result in ad hoc changes to the carefully considered and publicly consulted priorities for the provision of public amenities and services. In particular, the Council says that the result would be that the particular choices of a developer to provide a particular public benefit that is not selected for inclusion in a contributions plan, would trump the carefully considered priorities of the Council and the community, and would cause a delay in the provision of those prioritised amenities included in the plan.
Although the Council agrees that the construction of the laneway results in the provision of a material public benefit, the Council submits that the inclusion of clause 2.17 in the CP 2013 does not provide an avenue for the jurisdiction, as there is no power for the Court to exercise the functions of the Council to approve or enter into the draft VPA. In support, the Council relies on the decision of the Court in Progress and Securities Building Pty Ltd v Burwood Council (No 2) (2008) 158 LGERA 102; [2008] NSWLEC 135. Mr To, counsel for the Council, has indicated that his instructions from the Council are that it does not intend to enter into the draft VPA.

The Council's position that the Court ought not to reduce the contribution

Even if there is power for the Court to modify the quantum of contributions payable, the Council submits that the Court ought not do so in the circumstances. Firstly, the Council submits that the driveway scenario, on which the reduction proposed by Beaini is based, is unrealistic and counter-factual. That is, the Council says that there is no evidence that it would have entered into a s34 agreement without the laneway being constructed by the proponent. As such, the Council submits that the factual basis for the reduction is not well founded.
Secondly, the Council submits that the offset sought by Beaini is not reasonable because it would impact on the funding of public works identified as needed by the Council and contained in the CP 2013. That is, it reduces the contributions collected and impacts the ability of the Council to fund the public amenities it has identified. In doing so, the Council says that it disrupts the careful planning and ranking of priorities inherent in a contributions plan, and therefore elevates the particular priorities and timings of individual developers. The Council points out that the CP 2013 identifies 5 projects relating to transport in Wentworthville, with a total cost of $645,000. The impact of reducing the quantum of contributions in the present proceedings would be to create a shortfall in funding greater than the combined cost of all relevant projects in the CP 2013. This, the Council submits, would lead to those amenities not being funded or the funding being sourced from outside developer contributions, which would adversely affect the public interest in providing those amenities.
Thirdly, the Council submits that the underlying assumptions for the cost modelling carried out by Beaini are unreasonable. In particular, in the laneway scenario Beaini has assumed a private contractor would be used, whereas in the driveway scenario the construction would not be carried out by a private contractor. Further, the Council says that other inclusions in the laneway construction and exclusions from the driveway scenario are unreasonable, such as the relocation of the Telstra pit, the design and authority fees, the demolition and earthworks costs, and the cost of the construction of the median island in Station Street.

Expert evidence

In advancing their positions, the parties rely on the evidence of a number of experts. The Council relied on the evidence of:

Ms Claire Scott, who has qualifications in project management and is employed by the Council as the Coordinator Infrastructure Planning and Strategy,
Mr William Attard, a town planner,
Mr Siva Sivakumar, an engineer, and
Mr Peter Cassilles, who is also an engineer and is contracted by the Council as the Acting Group Manager - Capital Work.

Beaini relied on the evidence of:

Mr Andrew Robinson, a town planner,
Dr Pat O'Donnell, a quantity surveyor, and
Mr Joe Bacha, an engineer.

Mr Attard gave evidence in a joint report that instructions would not have been given to enter into an agreement at the conciliation conference if Beaini had not agreed to the imposition of conditions requiring the land to be dedicated as a laneway to be constructed to the standard of a public road. Mr Attard opines that this is appropriate in circumstances where cl 6.3(1)(e) of the HLEP 2013 requires the development to have "suitable road access". He also considers that the Council would not accept an asset on public land that is not to a public standard, and says that the requirement for the construction of the laneway avoids unnecessary disruption caused by future works. On the contrary, Mr Robinson considers that the comparison of costs between the laneway construction and the driveway scenario was done in a genuine effort to offer a realistic and reduced reduction from the contribution amount. Mr Robinson opines that the VPA for the dedication of land infers that the land does not need to be a formed public road, and that, based on s 6 of the Roads Act 1993, access and egress over the dedicated land would be as of right regardless of whether it was fully constructed to the standards required of a public road. Mr Robinson also points out that the Wentworthville Strategy post-dates the CP 2013.
Mr Sivakumar, Mr Cassilles, Dr O'Donnell and Mr Bacha all gave oral evidence concerning the requirements for a driveway design and the reasonableness of the costs of each of the elements of each design. Principally, Mr Cassilles' evidence is that there is negligible difference in the cost of the driveway design and the construction of the laneway to the standard of a public road. Dr O'Donnell's evidence is instead that different construction standards apply to the two different designs, and that some elements of the laneway construction aren't required for the driveway design, which leads to a difference in the actual cost and in the contingencies for each. On the evidence of the experts (in the joint reports), the costings of each scenario for each party are: Works Applicant Laneway Applicant Driveway Council Laneway Council Driveway Preliminaries 107,780 8,578 8,685 8,685 Design and Fees 73,788 2,750 2,500 2,500 Station Street Works 166,925 0 0 0 Demolition and Site Preparation 44,194 11,976 36,767 36,767 Earthworks 39,037 682 9,750 1,000 Stormwater Drainage 19,979 4,600 3,850 0 Electrical and Lighting 71,500 0 65,000 65,000 Pavement 97,630 35,421 59,674 66,028 (increased to $46,421 in oral evidence) Misc external works 9,295 1,760 0 0 Contingency 63,013 3,288 0 0 Margin included included excluded excluded Total Cost $762,454 $75,962* $182,376 $179,860 *This does not include the increased pavement cost or cost of installation of the median strip

As a result of the evidence, Beaini concedes that the cost of construction of the median strip would be borne by it even under the driveway scenario, and therefore ought to be included in the cost estimate for the driveway (therefore reducing the sum by which the contributions ought to be reduced).

There is power to vary the contribution payable

I consider that the broad power under s 7.13(3) is available to vary the contribution in the circumstances of the case. I am satisfied that, in circumstances where the Council agrees that there is a material public benefit that is provided by the construction of the laneway to the standard of a public road at the cost of the developer, condition 16 is unreasonable as the quantum of contributions therein was not reduced through the mechanism available in clause 2.17 of the CP 2013. I consider that, consistent with the reasoning in Colonial Credits, this is therefore an unreasonableness that finds its basis in the manner in which the CP 2013 was applied to the site. Although clause 2.17 is framed in a manner that requires an offer to be made to the Council, the unreasonableness in cl 7.13(3) need not arise from the conduct of one party or another, but need only arise "in the particular circumstances of that case."
Contrary to the submissions made by the Council, the unreasonableness does not arise from the economic burden of constructing the laneway of itself, but instead arises from the way that the CP 2013 has been applied to the development in circumstances where a material public benefit is being provided and clause 2.17 was not utilised to take into account the benefit of the works that provide the material public benefit. In this manner, the circumstances of Colonial Credits are readily distinguishable from the present circumstances. Whereas in Colonial Credits his Honour found that the unreasonableness arose from the obligation to construct the drainage system, in the present circumstances the unreasonableness arises from the failure to use a mechanism in the CP 2013 to accommodate works that, the parties agree, provide a material public benefit.
The fact that I have found that s 7.13(3) is engaged is sufficient for there to be power to amend condition 16.
Additionally, I also consider there to be power to amend the contributions in condition 16 as a result of the broad power conferred on the Court pursuant to s 4.55(8). In exercising that power, it is my view that the discretion of the Court should be exercised in a manner that is consistent with s 7.11(3) of the EPA Act and clause 2.17 of the CP 2013. Further, it is clear, for the reasons set out in [28]-[29], that in exercising the power pursuant to s 4.55(8) I am required to take into account the draft VPA.

It is appropriate to vary the contribution payable

The consequence of the unreasonableness in applying the CP 2013 without utilising the mechanism in clause 2.17 to accommodate works that provide a material public benefit (and therefore reduce the monetary contribution) is that Beaini has the economic burden of both providing the material public benefit and the undiscounted monetary contribution in condition 16. I accept Beaini's submission that this has the effect of levying from Beaini a contribution to the value of the sum of the works and the monetary contribution, which is far greater than the monetary contribution ordinarily payable under the CP 2013 and therefore, cannot be considered commensurate with a corresponding increase in demand for public amenities and services. In those circumstances, it is appropriate for the power pursuant to s 7.13(3) to be exercised so as to amend condition 16. I accept that a reduction in the quantum of contributions payable in condition 16 is appropriate.
Whilst it is open to the Court to exercise the power pursuant to s 4.55(8) and apply the CP 2013 (as per [61]), a strict application of clause 2.17 of the CP 2013 would require a condition to be imposed requiring the entry into the draft VPA. I consider that the exercise of the power pursuant to s 7.13(3) to reduce the monetary contribution is a more favourable course, given the Council's indication that it will not enter into the draft VPA and given that there is no power for the Court to compel the Council to do so (see Progress and Securities Building v Burwood Council).
In order to calculate the appropriate reduction of the monetary contribution, I accept that a comparison between the cost of the laneway construction and the cost of a driveway is appropriate. I do not accept the Council's submission that a driveway is an unrealistic scenario for the purposes of such a comparison. To the contrary, the requirements of the HDCP 2013 (other than for new subdivisions) are for the construction of "the appropriate class of access driveway" (C11 of Part A3.5 of the HDCP 2013, quoted above at [18]). Further, contrary to the opinion of Mr Attard, the requirement of cl 6.3(1)(e) of the HLEP 2013 for "suitable road access" does not (of itself) create an obligation for a developer to construct the access to a standard beyond that required by the development. As such, I consider that "the appropriate class of access driveway" is the appropriate comparison upon which to calculate the fair value of the reduction in contributions, given that such construction would have otherwise been required (if the HDCP 2013 was applied) if the laneway construction was not. That is, the reduction in the monetary contribution in condition 16 should reflect the difference between the cost of constructing the laneway to the standard of a public road and the cost of constructing the appropriate class of access driveway.
I note also that, in so determining, I consider it irrelevant that a council officer would not have given instructions to enter into an agreement at the conciliation conference if the conditions required only driveway construction rather than construction to the standard of a public road. This is because the bargaining position taken by the Council at the conciliation conference is not a measure of reasonableness and does not provide guidance on whether a driveway is realistic for the purposes of the comparative exercise.
Further, I also note that I do not accept the submission of the Council that taking into account a material public benefit that is not covered by the schedule of works in the CP 2013 is unreasonable on the basis that it could delay the delivery of public works covered by CP 2013, or result in insufficient funding for those works. Clause 2.17 clearly allows the Council to accept a material public benefit that is not an item identified in the works schedule, and in the present circumstances, the material public benefit is one that is identified in the Wentworthville Strategy. Contrary to the Council's submission, I consider it unreasonable that the clause was not engaged, with the consequence that the Council imposes the full burden of public works on a developer (beyond what is required by the HDCP 2013) to deliver a constructed asset identified in the Wentworthville Strategy in addition to seeking the full monetary contribution.

The quantum of contribution

In determining the difference between the cost of constructing the laneway to the standard of a public road and the cost of constructing the appropriate class of access driveway, I prefer the detailed evidence of Dr O'Donnell, who calculated the cost of each type of construction based on actual sub-contractor trade rates from similar real construction in similar geographic locations, to the evidence of Mr Cassilles, who provided little detail as to the basis for his calculations. In the circumstances of the present case, where Beaini is bound by the conditions of consent to carry out the work for the public road and to bear that cost, I consider that it is appropriate to determine the cost of constructing the laneway based on estimates of the actual cost to Beaini, rather than focussing on what it would cost the public authority to provide it. In any event, the Council has not tendered any evidence from a quantity surveyor that establishes that the cost to the public authority would be any different, and I cannot be satisfied on the evidence of Mr Cassilles or Mr Sivakumar that their cost estimate for either the laneway or the driveway is accurate. In particular, I make the following findings.
Firstly, I accept the evidence of Dr O'Donnell with respect to the difference in the cost of preliminaries. I accept that the work for the laneway would need to be done by a road works subcontractor (Tier 1 contractor), whereas the builder responsible for the development would be able to carry out the work for the driveway (which can be carried out by Tier 2 and 3 contractors). I accept the evidence of Dr O'Donnell that there would be an additional cost for surveys, insurances, project management, supervision and traffic control associated with the construction of the laneway. I accept that Dr O'Donnell has costed those preliminaries in accordance with actual subcontractor trade rates from similar projects, and based on his experience. With respect to the cost of preliminaries for the driveway construction, the experts were largely in agreement that the cost would be 15%. The cost of the preliminaries would therefore need to be adjusted to reflect my further findings below.
Secondly, I accept the evidence of Dr O'Donnell with respect to the difference in cost of the design and fees. I accept his evidence that the public laneway has already incurred far more extensive design costs with 16 drawings included for the public laneway design, as opposed to one for the driveway. Contrary to the submission of the Council, there is no evidence that additional drawings would be required for the driveway. I accept Dr O'Donnell's evidence that, based on the requirements of the conditions of consent, the laneway requires works as executed drawings and extensive approval, testing and inspection costs that are not required for a private driveway. I also accept that there are fees associated with registering easements that will be incurred with the laneway but would not be incurred in the construction of a driveway.
Thirdly, I accept the evidence of Dr O'Donnell with respect to the difference in the cost of demolition, site preparation and earthworks. There is a different scope of works for each different construction, with deeper excavation and sub-base required for the laneway. The evidence is that this means that the size of the machinery would be different, and an increased cost for the laneway when compared to the construction of a driveway. Additionally, the laneway requires the removal of the current crossover, sedimentation control, a stabilised site exit, detailed excavation and batter and regrade to match design surface level, all of which I accept would not be required for the driveway construction. I accept Dr O'Donnell's cost estimate of the demolition, site preparation and earthworks for each of the driveway and the laneway. However, on the evidence of Mr Bacha and Mr Sivakumar, the cost of the driveway site preparation should be increased to reflect that the driveway should be extended to allow access to the electrical substation that is to be located on the eastern boundary of the site.
Fourthly, I accept the evidence of Dr O'Donnell that street lighting pole(s) and cabling are not required for the construction of a driveway, which would be lit as part of the normal lighting requirements for the development. I accept his estimate of costs with respect to those components of the laneway construction.
Fifthly, I accept the evidence of Dr O'Donnell on the difference in the costs for the stormwater drainage works associated with each different construction. I accept his evidence that, whereas large concrete pipes are required for a public road on the laneway, smaller plastic pipes would suffice for a driveway. I accept his estimate of the costs of those works.
Sixthly, I accept the evidence of Dr O'Donnell with respect to the different costs associated with the pavement for each construction. Whereas the public laneway works (including the footpath) require multiple layers of crushed rock sub-base, base-course and asphalt, the driveway uses a concrete pavement and is constructed as part of the overall development. Whereas full kerb and gutter is required for the laneway, a simple kerb on the driveway would suffice. Further, the footpath for the driveway need not have multiple layers of crushed rock base-course. Mr Bacha's evidence, which Mr Sivakumar did not dispute, was that a 175mm reinforced concrete driveway would be sufficient to accommodate all the anticipated vehicles likely to access the development. I accept this evidence in favour of the evidence of Mr Cassilles, who considered that there would be little difference in the design of the driveway from that of the laneway. In oral evidence, Mr Cassilles was unable to substantiate that opinion. I accept Dr O'Donnell's estimate of costs in relation to the pavement for each construction scenario, subject to the costs of the driveway being increased to reflect 175mm reinforced concrete and the additional length of the driveway to access the substation.
Seventhly, I accept the evidence of Dr O'Donnell with respect to the different costs of miscellaneous external works for each of the construction scenarios, which include the removal and installation of signage, and lane markings, where there is less of this work required for the driveway. I accept his cost estimate with respect to those works in each scenario.
Eighthly, based on the evidence of Mr Sivakumar, I agree that the cost of construction of the median strip would be borne by Beaini even under the driveway scenario in order to allow for left turn only entry and exit for the driveway. I also consider that the evidence does not support Beaini's position that the relocation of the Telstra pit, which is located within close proximity of the laneway corridor, would not be required for a driveway construction. Whilst there is evidence that the Telstra pit can be covered by a heavy duty lid for a driveway servicing a dual occupancy (see Ex K), there is no evidence that this would be sufficient for a driveway servicing a development of the size of that approved by the consent. Instead, I accept the evidence of Mr Sivakumar and Mr Cassilles that for a heavy-duty driveway servicing a development of this scale, the relocation of a Telstra pit is usually required. Therefore, the cost of the driveway construction should also accommodate the relocation of the Telstra pit.
Finally, I accept the opinion of Dr O'Donnell that the GST, contingencies and builder's margin should all be included in the driveway and laneway estimates in order to accurately calculate the difference in cost of the two different construction scenarios. However, these estimates will need to be updated in the driveway scenario to reflect the above findings that the cost of the driveway construction includes the median strip, the relocation of the Telstra pit, a 175mm concrete pavement and the driveway extending to the electrical substation.
In making these findings, I do not accept the evidence of Mr Cassilles and Mr Sivakumar that the cost estimate includes items that are unrelated to works within the laneway. Instead, I accept the evidence of Dr O'Donnell that the relevant costs have been included within each scenario, but I consider that the cost of the driveway construction should be increased to accommodate the additional costs identified in my findings.

Outcome of the application

I have above determined that the power, pursuant to s 7.13(3) of the EPA Act is engaged, such that I can amend the quantum of the monetary contribution payable in condition 16. I have also determined that the reduction in the monetary contribution in condition 16 should reflect the value of constructing the laneway to the standard of a public road in lieu of a driveway, with this value calculated by the difference between the cost of constructing the laneway and the cost of constructing the appropriate class of access driveway.
In order to calculate the appropriate reduction to the monetary contribution, the cost of the construction of the driveway must be re-calculated to reflect my findings above. That is, it must include the median strip, the relocation of the Telstra pit, additional pavement to allow access to the substation and increased thickness in the concrete (to 175mm). This will affect the cost estimates for the preliminaries, builder's margin and contingencies. Only once the re-calculated cost of the driveway is provided can the additional value of providing the construction of the laneway be discerned and subtracted from the monetary contribution calculated by the Council. Accordingly, final orders can only be made once the new calculation is provided.
I therefore make directions as follows. The Court directs that: 1. The applicant is to file and serve an updated schedule of costs for the construction of the project driveway, which reflects my findings, by 18 November 2019. 2. If the parties reach an agreement on the monetary contribution payable as a consequence of my findings, the agreed conditions of consent are to be filed by 25 November 2019. 3. If no such agreement is reached on the monetary contribution payable, the parties are to lodge an Online Court request by 12:00pm on 26 November 2019 setting out agreed available dates for a further court mention. 4. Liberty to restore is granted on 2 days' notice. 5. The exhibits are returned, except for Exhibits 6, 7, 11, A, B, D and H.

Addendum made on 6 December 2019

Subsequent to my findings and in accordance with the terms of directions in [80] of my judgment of 11 November 2019, the parties provided me with the agreed modified conditions of consent. I am satisfied that the calculation of the contribution payable therein accords with my findings.
The Court orders that: 1. The application to modify the consent for the demolition of existing structures and the construction of a 12-storey mixed used development at 108 Station Street, Wentworthville, by amending the conditions of consent, is granted. 2. The development consent (2018/110/1) for the demolition of existing structures and the construction of a 12-storey mixed used development at 108 Station Street, Wentworthville is now subject to the modified conditions of development consent in Annexure A.

Amendments 10 December 2019 - For final orders - see Addendum at [81]-[82]. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 10 December 2019

(2008) 158 LGERA 102

At a glance

Court

Decision date

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Judgment (18 paragraphs)

Parties

Cases Cited (7)

Cited By (3)