Victorian Civil and Administrative Tribunal|2008-08-27

The applicant or owner must pay to the Council a sum equivalent to 5% of the site value of all land in the subdivision or a particular lot or lots. This payment shall be made prior to the issue of a Statement of Compliance and may be adjusted in accordance with Section 19 of the Subdivision Act.

In overview, the Applicant has challenged Condition 3 on the basis that the Applicant believes that it can take advantage of an exemption under Clause 52.01 of the Planning Scheme, which is discussed further below. This is disputed by Council.
The hearing of this matter occurred before me on 12 August 2008. At this time I heard submissions from Mr Soding on behalf of the Applicant and from Mr Rantino on behalf of Council.
Soon after the hearing I braved a rainy winter's day to carry out an inspection of the appeal site and immediate area. This included looking at the new dwelling being constructed and walking around the secluded private open space area of the existing dwelling.
My overall conclusion here has been that I accept that the Applicant can rely on the "unlikely that each lot will be further subdivided" exclusion under Clause 52.01, such that the contentious Condition 3 as it stands should be deleted. However I have in practice made orders that a modified Condition 3 apply instead, with the new version of Condition 3 requiring the owner of the subject land to enter into a Section 173 Agreement prohibiting the further subdivision of the two new lots.

I have already set out above the permission granted by the Permit and the text of the contentious Condition 3.
In relation to the subject land, it has an overall area of 2066 square metres and is located immediately southeast of the Maroondah municipal offices. This is an established residential area, including a number of nearby unit developments.
With respect to the proposed two lot subdivision, the new Lot 1 will be 1389 square metres and contains the existing circa 1920s period dwelling. The smaller new Lot 2 will be 677 square metres and is a narrower lot which contains a new dwelling currently being constructed.
Turning to the relevant planning framework, the site is zoned Residential 1, with Clause 32.01-2 requiring a planning permit to subdivide the land. The Residential 1 Zone does contain modifications to the normal Rescode requirements in the Schedule to the Residential 1 Zone. In particular, there are variations to the standards for the site and rear setbacks, the private open space and the front fence height.
Otherwise, the site is affected by a Significant Landscape Overlay Schedule 4 and by a Heritage Overlay HO8. Although there is no permit trigger under the SLO4, a permit is required for subdivision under the Heritage Overlay.
In terms of the relevant provisions from the State Planning Policies, the main ones here are Clauses 15.10, 16.01, 16.02 and 19.01.
Turning to the Council Municipal Strategic Statement provisions and local policies, there was particular discussion of Clauses 21.03-3 and 21.06, as well as mentioned of 21.08, 22.01 and 22.03.

In simple terms Clause 52.01 provides that where it is proposed to subdivide land, a contribution to the Council for public open space must be made if there is an amount specified in the Schedule to this clause. In this case, Schedule 2 the Maroondah Planning Scheme requires a 5% contribution for all subdivisions.
There is also an exemption arrangement provided for in Clause 52.01, as follows, with the most relevant bullet point highlighted by myself.

A subdivision is exempt from a public open space requirement, in accordance with Section 18(8)(a) of the Subdivision Act 1988, if:

It is one of the following classes of subdivision:
- Class 1: The subdivision of a building used for residential purposes provided each lot contains part of the building. The building must have been constructed or used for residential purposes immediately before 30 October 1989 or a planning permit must have been issued for the building to be constructed or used for residential purposes immediately before that date.
- Class 2: The subdivision of a commercial or industrial building provided each lot contains part of the building.
It is for the purpose of excising land to be transferred to a public authority, council or a Minister for a utility installation.
It subdivides land into two lots and the council considers it unlikely that each lot will be further subdivided.

Although the most relevant provision here for public open space purposes is Clause 52.01 of the Planning Scheme, it is also useful for comparison purposes to set out Clause 18(1) of the Subdivision Act 1988.

If a requirement for public open space is not specified in the planning scheme, a Council, acting as a responsible authority or a referral authority under the Planning and Environment Act 1987 may require the applicant who proposes to create any additional separately disposable parcel of land by a plan of subdivision to -

(a) set aside on the plan, for public open space, in a location satisfactory to the Council, a percentage of all of the land in the subdivision intended to be used for residential, industrial or commercial purposes, being a percentage set by the Council not exceeding 5 per cent; or

(b) pay or agree to pay to the Council a percentage of the site value of all of the land in the subdivision intended to be used for residential, industrial or commercial purposes, being a percentage set by the Council not exceeding 5 per cent; or

(c) do a combination of (a) and (b) so that the total of the percentages required under (a) and (b) does not exceed 5 per cent of the site value of all the land in the subdivision.

Before embarking on making my main findings, it is useful at this point to set out some more straight forward preliminary points.

No discretion re percentage payable under Clause 52.01

Firstly, whilst the matter is not entirely settled, I accept that the thrust of the relevant case law stands for the proposition that where Clause 52.01 of the Planning Scheme sets a particular figure for the necessary open space percentage payment (eg 5%), then the discretionary elements as to the percentage payable that apply under Section 18 of the Subdivision Act 1988 are excluded. In particular, the cases of Tucker v Mornington Peninsula SC [2006] VCAT 1780 and Hassta Holdings Pty Ltd v Maroondah CC [2007] VCAT 2445 support this position.
The reason I have qualified this statement is that I acknowledge that some doubt was created by the relevant comments of Justice Morris (as he then was) in Fletcher v Maroondah CC [2006] VCAT 2205, which I understand is currently subject to review in the Victorian Court of Appeal.
However it is also clear that despite the removal of this discretion if the necessary amount of contribution is set out in the Schedule to Clause 52.01, there is still an ability to apply the various exemptions under the balance of Clause 52.01. In other words, even if a person wishing to subdivide land prima face needs to pay the full percentage required as per the Schedule to Clause 52.01 (eg 5%), it may still be possible for that person to rely on an exemption so as avoid needing to pay this amount.

Can the open space contribution payable under Clause 52.01 be applied to only part of the overall land being subdivided?

I turn now to whether the requisite open space contribution under Clause 52.01 needs to be paid in relation to part or all of the subject land. By way of comparison, it is clear to me that Clause 18 from the Subdivision Act expressly deals with this issue, as Clauses 18(1)(a), (b) and (c) each use the words "... all of the land in the subdivision". As the relevant text in Clause 52.01 does not include any equivalent use of these words, I acknowledge that the situation is not black and white with Clause 52.01 in this regard.
However, during the hearing Mr Rantino highlighted that Senior Member Byard has in the previous decision of Tucker v Mornington Peninsula made a specific finding on this issue, where he stated as follows.

The responsible authority has dealt with the assessment of the cash contribution for public open space, but not in accordance with cl.52.01. It has contemplated separate assessments in relation to lots 1 and 2 whereas it should be 5% of the site value of all the land being subdivided for residential purposes. Clause 52.01 does not actually say all the land being used for that purpose, but that is clearly the meaning. The expression "all the land" appearing in previous legislative manifestations of these provisions has been omitted in cl.52.01.

While I can see room for different views on this issue, in the final result, I am content to deal with this proceeding on the basis that any necessary public open space payment needs to apply to all of the land being subdivided at 15 Braeside Avenue Ringwood East, given that:
- I am not aware of any other previous Tribunal decision specifically dealing with this issue, other than the statement above by Senior Member Byard; and
- this point was not particularly pursued by Mr Soding in the course of his submission to me.

Previous Tribunal decisions regarding how to apply the term "unlikely"

Dealing now with any helpful previous Tribunal comments regarding how to interpret the word "unlikely", the previous decision of Revill v Stonnington CC [2005] VCAT 2583 confirms that in determining whether land is unlikely to be further subdivided, an objective review needs to apply rather than going off the subjective stated intentions of the current or future land owners. In other words, the mere fact that the current or future owner has stated that he or she has no intention to subdivide the land in future does not in itself carry any weight.
It is also clear from previous decisions that Clause 52.01 does not distinguish a timeframe for the likelihood of further subdivision. In Thompson v Maroondah CC [2007] VCAT 2455, Member Komesaroff made the following useful statement.

The test is whether it is unlikely that a proposed new lot will be further subdivided. There is no time constraint on when such further subdivision will occur. I could not say that it is unlikely that proposed lot 1 will be resubdivided in the future. I have seen plenty of recently renovated dwellings demolished (albeit in a middle ring suburban environment) to make way for two double storey townhouses

Give that the word "unlikely" is not a black and white term, the following passage from Senior Member Byard in his Tucker v Mornington Peninsula decision is instructive.

The word "unlikely" does not mean "impossible". It does not necessarily mean that further subdivision is "likely". The notion of "further" subdivision necessarily involves a consideration of future possibilities and whether such possible subdivision is "unlikely". It does not impose a limit as to the extent of time into the future that is likely to be considered.

In overview, Mr Soding urged the Tribunal to find that there are sufficient planning scheme constraints on the future redevelopment of the site, to justify the Tribunal concluding that both of the two new lots are unlikely to be further subdivided in the future. In response, Mr Rantino conceded that the new smaller Lot 2 was unlikely to be further subdivided at a later stage, but he disputed that the larger new Lot 1 (which will be 1389 square metres in size and contain the circa 1920s period dwelling) had no future subdivision potential. Rather, he urged the Tribunal to find that it cannot be said that the new Lot 1 is unlikely to be further subdivided, in that there is a sufficient prospect in the longer term of either:
- an infill development alongside the existing 1920s period dwelling; or alternatively
- the complete redevelopment of the new Lot 1, if approval is granted at a later stage for the 1920s dwelling to be fully demolished.
A further possibility discussed was whether the original fabric from the 1920s dwelling might remain, but whether the more recently extended ground level wing that dwelling might be allowed to be demolished to help facilitate an infill development.
My overall finding here is that I am satisfied that it is unlikely that either of the new lots 1 and 2 will be further subdivided. Hence I accept that the Applicant can take advantage of the Clause 52.01 exemption here, and that consequently the contentious Condition 3 as it stands should be deleted (see my orders above).
In relation to the smaller new lot 2, it was conceded by Mr Rantino that it was unlikely that this smaller lot would be further subdivided. In relation to the larger new lot 1 which will have an area of 1389 square metres and contain the existing circa 1920s dwelling, I rely on the following points in making my overall findings.
First, my inspection of the subject land indicates that me that:
- on the one hand, as the existing office building at the northern end of the site (facing on to Braeside Avenue) is non-descript and clearly has no heritage value, it seems likely that heritage approval would be granted for the removal of the office, noting that this freed up area of the subject land has the benefit of direct street access to Braeside Avenue; but
- on the other hand, even if the office was removed, this still only leaves a quite small area available on the north-eastern section of the subject land available for a potential in-fill residential development and associated subdivision in this location. Hence I see real doubt whether there would be enough space per se for any proposed infill development and further subdivision in this regard. Even if there was enough space, I also see major doubts whether heritage approval would be given to build a new unit so close to the existing circa 1920s residence, keeping in mind that any such new dwelling would sit between the heritage residence and Braeside Avenue (and therefore impact on streetscape views of the heritage residence).
Second, with respect to the scenario of the complete demolition of the circa 1920s dwelling being proposed at a later stage so as to allow full redevelopment/further subdivision of the new lot 1, my view is that (both now and in the longer term) it is very unlikely that either Council or the Tribunal would allow such complete removal. Although it is unhelpful that Maroondah Council apparently does not have the benefit of any heritage study which applies an "A", "B", "C", "D" or "E" grading to any one place on the Maroondah Heritage Overlay Schedule, it was common ground at the hearing that (compared to many inner city Councils) Maroondah has a relatively modest number of properties affected by its Heritage Overlay. On this basis, I would expect this to make it all the more harder to convince Council or the Tribunal that complete demolition of the circa 1920s dwelling is consistent with the objectives of the Heritage Overlay. My findings here are reinforced by:
- the fact that even the more recent additions to the original 1920s fabric of the heritage residence have been done in a tasteful manner and blend in well with the original fabric. For example, the more recently extended wing has very similar red brick walls, wooden windows and it is difficult to see any difference in the appearance of the roof tiles over any part of the original or extended dwelling;
- my view that even moving into the future, all the current indications are that more significant heritage places such as this will continue to be significantly valued by the community and therefore face major redevelopment constraints.
For similar reasons, I also see it as being an unlikely outcome that the 1920s original built fabric is retained but the more recent wing demolished to make room for an infill development and associated further subdivision. This is not one of those situations where the more recent built form is of a poor standard and looks very different to the original fabric (eg the proverbial external cladding of now rotten weatherboards and terrible looking replacement aluminium windows).
Although I see the most relevant and important overlay here as being the Heritage Overlay, my findings above are reinforced by the fact that there is also a SLO4 affecting the subject land. Hence any more significant trees on the subject land which come within the scope of the SLO4 would create a further permit trigger, to the extent that any proposed further development/subdivision of the new lot 1 required any of these trees to be removed.

In summary, for the reasons set out above, I am satisfied that the Applicant can rely on the "unlikely that the new lots will be further subdivided" exemption under Clause 52.01, and accordingly I have made orders that the contentious Condition 3 as it currently stands be deleted.
However I also consider it appropriate to insert a replacement Condition 3 requiring the Applicant to enter into a new Section 173 Agreement which prohibits any further subdivision of either the new lot 1 or the new lot 2. In particular, such a Section 173 Agreement will flag the "no further subdivision" restriction to any future potential owner of the new lot 1.
In terms of the role to be played by such a Section 173 Agreement, I support the view put forward by Mr Rantino that it can be useful on a "belt and braces" basis to reinforce the finding that the exemption applies, but that a 173 Agreement should not be used as a substitute for a genuine review of whether the exemption is applicable. Mr Rantino relied here on the potential for a mischievous owner to rely on a Section 173 Agreement to seek the Clause 52.01 exemption, but then at a later stage seek a Tribunal order under Section 184(4) of the Planning and Environment Act 1987 that the Agreement no longer apply to the subject land, if the Tribunal is satisfied that it is "...inappropriate that the agreement should continue to apply to the land and the owner"[1].
I can also indicate in passing that I have some sympathy for Mr Soding's comment at the hearing that his client has been frustrated at having to deal with this proceeding on top of the normal restrictions associated with having one's property affected by a Heritage Overlay. Whilst in this type of situation the owner should still be able to demonstrate that the exemption under Clause 52.01 applies, I am mindful (and I think Councils should also keep in mind) that compared to countries such as Britain and the United States, the level of public funding available in Australia to assist owners maintain heritage listed properties is quite modest.

Environment Act 1987

Subdivision Act 1998

Breese Pitt Dixon Pty Ltd v Maroondah CC [2008] VCAT 1736 (27 August 2008)

Breese Pitt Dixon Pty Ltd v Maroondah CC [2008] VCAT 1736

At a glance

Court

Decision date

Source

Judgment (26 paragraphs)

Parties

Legislation Cited (2)

Cases Cited (1)

Breese Pitt Dixon Pty Ltd v Maroondah CC [2008] VCAT 1736 (27 August 2008)