[2007] NSWLEC 510
Hoxton Park Residents Action Group Inc v Liverpool City Council (2011) 81 NSWLR 638
Source
Original judgment source is linked above.
Catchwords
[2007] NSWLEC 510
Hoxton Park Residents Action Group Inc v Liverpool City Council (2011) 81 NSWLR 638
Judgment (17 paragraphs)
[1]
The applicant argues that the place to look to understand Council requirements for servicing land subdivision for the site environs is the DSP. The points that the applicant took me to in the DSP which were of particular note included:
[2]
App D section 1 - which indicated the staging schema for the subdivision south of Johns Road to be to progress "moving from east to west to work within the constraints of the existing water and sewer services".
Part 10 of the DSP is concerned with "Works In Kind and Temporary Works". This part explains the availability of works in kind in lieu of making monetary contributions (an approach suggested by Council in these proceedings). In relation to works in kind in relation to temporary works it provides as follows (DSP p 9):
[3]
Brentford Properties Pty Ltd v Central Coast Council [2024] NSWLEC 1300 | Case summary | Zoe
"It may be feasible to provide interim measures to service initial stages of a development in lieu of constructing major works up front. Such proposals will need to be assessed at the time of application. In these cases the applicant is responsible to fully fund the design and construction of the assets and donate them to Council with a payment of expected operational costs and a further payment towards the future decommissioning of the interim works. These costs are additional to any costs identified in this Plan."
[4]
Reference was also made to staging consideration in CCDCP which provides at Clause 5.9.2.2 that out of sequence staging "may occur if provision of infrastructure is provided by proponent" (Ex 2 Tab 18).
[5]
The applicant's response to Council's concerns has four "avenues" to it, as follows:
[6]
(1) The applicant indicates it has a right to presumption that it will comply with the law (including conditions of consent requiring the installation, maintenance and decommissioning of the infrastructure).
(2) The EPA Act includes enforcement provisions concerned with remedying a breach of any consent and its conditions.
(3) The applicant has accepted an imposition of a positive covenant on title relating to the provision, operation and maintenance of the SPS, and including the powers prescribed by s 88F of the Conveyancing Act 1919, that Council staff are permitted to inspect and repair the facility at the owner's cost (proposed Condition 5.22).
(4) The applicant has accepted imposition of a condition relating to a maintenance bond, although put as such (AWS par 3):
[7]
"It is only if, in the particular circumstances of this matter, the Court is not satisfied that any, or all, of those three avenues provide appropriate security (to 2 use that term in a neutral way) that it will become necessary to impose a condition of consent requiring security in the form of a bond."
[8]
For the record, I can also note here that Council references the relevant upfront cost at around $2.5M were the proposal to cover the relevant regional sewerage infrastructure to the near north of the site (to which the site could then drain direct). On the other hand, DSP charges for the subject subdivision were about $255k (Respondent's Outline of Submissions dated 15 March 2024 (ROS) par 20). However, if cost comparisons are to be made there would also be a need to factor in the sunk costs associated with the proposed interim infrastructure.
[9]
Whether the Court is satisfied that adequate arrangements have been made to make infrastructure for the disposal and management of sewage available when it is required
[10]
Firstly, in relation to the fourth avenue suggested by the applicant, I do not rely on the imposition of a bond in this instance. I agree with Council's closing submissions that this would be unlawful mindful of the findings in Charalambous v Ku-ring-gai Council(2017) 155 LGERA 352; [2007] NSWLEC 510 [13].
However, in general it seems to me that there is nothing before me to suggest that it is other than reasonable to accept as a default position, at least, that the normal process flow for land conversion would, with the grant of consent, occur in this instance. This development has already commenced on that well-worn path (of land conversion), with the end goal, land sales, as the means of return on the early capital investments that have occurred and would continue to occur until finalisation.
Stepping beyond the default position, it is also reasonable, as Council suggests to turn to "what-if" scenarios. While it is certainly possible that some of the outcomes suggested by Council may come to pass, there is a requirement to consider the adequacy of the responsive actions which are available. There are four main points in response. The first is at the general level and the obvious interest in securing land sales at optimal prices, which encourages the subdivision to not be seen as problematic in the market place. More particularly, here I am referring to a clear financial incentive to ensure that services, such as sewerage, are available to meet demand, as land sales roll out over the stages of land release.
The second relates to the collateral available from the residue lots themselves. Certainly in relation to stormwater and Lot 138(R) but also in regard to Lot 134(R) and the interim SPS and related infrastructure. On the evidence, this collateral seemed to outstrip the make good costs as I could understand them from the uncontested evidence of Mr Tran (noting Ms Englund's evidence on local residential land sale prices as ranging from $400,000 to $700,000).
The third point relates to the proposed positive covenant, which brings its own direct powers to Council in regard to inspections and repairs to the interim SPS and stormwater basin (see proposed Condition 5.22 and 5.19 in Annexure A). I can group this point with enforcement options under EPA Act. This also links to the applicant's point about an assumption of provision in accordance with consent conditions, but there is an in-built enforcement system which provides the EPA Act's legislative response to instances of failure.
The fourth point is concerned with the prospects for the regional level infrastructure to be constructed within a reasonable timeframe into the future. That is not to say that it would be constructed by 2026, as indicated in the DSP, but I also note Ms Englund's comments in regard to further subdivisions in the catchment, themselves moving along. This suggests to me that it would not be an overly long period before the regional infrastructure comes on line.
On this topic, I do note the Council's arguments suggesting the collateral I refer to above may itself be jeopardised in certain circumstances, this does not seem to me to be a reasonably likely event, and the balance of the responses available in regard to the four points nominated above, suggests to me that there are adequate response possibilities available overall.
On the basis of the reasoning above, I am satisfied that adequate arrangements have been made, including the form of proposed consent conditions (Annexure A) for operating and maintaining the proposed SPS and associated sewerage infrastructure and stormwater infrastructure.
[11]
Wider merits question relating to out-of-sequence development
[12]
The land conversion process in new release area planning rarely involves a predictable linear process. The planning and infrastructure authorities are often involved in a 'dance' which drifts between articulating a clear staging path (predictability), while also providing some kind of considered flexibility to respond constructively and with due discipline to sometimes unexpected external initiatives.
It seems to me that it is reasonable to expect a considered degree of guidance from policy documents that are prepared in regard to staging around infrastructure. This expectation is in part related to the scale of funding decisions involved in investment in land subdivision. That is to say, those acquiring land to ultimately assist in providing for housing needs in accordance with zone objectives would reasonably look to the LEP, CCDCP and the DSP for guidance. This is not to say that person-to-person guidance has no place. But some considerable weight is reasonably attributable to documented policy.
In this instance, the guidance from these documents would suggest the applicant has taken a not unreasonable path to avoid the higher costs associated with providing the regional infrastructure and instead provide for an interim solution. In relation to App D section 1 of the DSP, the site is relevantly located to the east and has adopted the approach of "(working) within the constraints of the existing water and sewer services" which would be understood as the underlying concept. Part 10 of the DSP points to interim measures at the initial stages of development (such as in this instance) and Clause 5.9.2.2 of CCDCP also opens the door to "out of sequence staging".
In relation to the particular issues in dispute and the wider merits of the proposal I find in favour of the applicant.
[13]
It is unusual to make a note of this kind but in this instance I believe it is warranted. Nothing said below should take away from the merits determination of the application before me.
There were some odd points of exchange in the proceedings which suggested to me that there may have been some benefit from more full and frank dialogue between the parties as to alternatives to the staging arrangements in the proposal before me, that may have benefitted both parties. I noted two particular points.
The first was concerned with the operational and maintenance responsibilities for the interim SPS. Under the Servicing Report the interim SPS would be operated by the proponent and decommissioned at the proponent's cost [27]. This was a different arrangement to that in place in regard to an SPS inspected during the site view at 137 Johns Road to the north of the site. The Johns Road SPS was created as a private pumping station, but it now operated through council's system at an agreed cost. The "odd point" in the dialogue between the parties for me, was that the applicant seemed to argue that an arrangement similar to Johns Road was "on the table" from the beginning, but Council indicated that there was never that understanding (to construct and donate the infrastructure and pay to Council an upfront fee for operating the service) (Tcpt, 14 March 2024, p 95(24-31).
The second point related to the possibility of immediate recompense for the upfront funding of the regional SPS and rising main. Ms Englund seemed to indicate that such funding may be available in relatively short order. The applicant seemed to be under the impression that there would be a significant period between the outlay (for regional works) and compensation. Council (Mr To) also indicated that funding may already be available, however a formal (Planning Agreement) offer and formal Council decision would be required.
While I might take it that, in preparing the application in the way it has, the applicant believes it has exhausted such options, which might bring it financial savings, it was not apparent to me that time would be wasted by further exploring the possibilities in relation to both points, notwithstanding the determination I have made here. Put another way, it would seem reasonable to suggest that this determination need not block off practical alternatives that might provide an improved outcome from both parties' point of view.
[14]
There were three areas of dispute in the draft consent conditions provided by the parties.
The first is concerned with the finalisation of the detailed design and associated particulars relating to the interim SPS. The parties agree on the particulars of the relevant condition. The dispute is whether finalisation be a deferred commencement matter or an operative condition. It seems to me there is no particular justification for a deferred commencement condition here. In my preferred approach, Council would have an approval role for finalisation of the relevant matters prior to subdivision works certificate. This provides an appropriate hold-point to ensure the particular objectives of the relevant condition are achieved. The consent conditions are all operational, with the relevant requirements included at conditions 2.22, 2.23 and 2.24.
The second concerns dedication of Roads 1, 2 and 3. I have found above that I am with the applicant in regard to this. The applicant's version of Conditions 1.3 and 5.24 is adopted.
The third matter concerns bonds in relation to non-public infrastructure which I have found to not be able to be applied. There is no need to go to the particulars of the disagreement. Proposed conditions from each party have been deleted, which means the final condition in Section 5 of the conditions is numbered 5.29.
[15]
In accordance with the reasoning above the proposal warrants the grant of consent subject to conditions as generally agreed between the parties and otherwise determined above.
[16]
(1) The appeal is upheld.
(2) Development Application DA/2728/2022 for demolition of existing structures and a 45 lot Torrens title subdivision over six stages at 130, 130A, 140 and 140B Jensen Road, Wadalba, legally described as Lots 21 and 22 DP 1297341 and Lot 21 and 22 DP 1299079, is determined by the grant of development consent subject to the conditions at Annexure A.
(3) The exhibits are returned with the exception of Exhibits 1, A, B, C and E which are retained.
There are two locations warranting attention in regard to potential impact. The first concerns the environs of the proposed interim SPS at Lot 134(R). The second concerns the environs of existing SPS WS29 to which, under the applicant's scheme, sewage from the proposed development would discharge. In both instances, the potential impact is concerned with sewage overflowing from the relevant SPS and this sewage overflow causing impacts (eg adding pollutants to stormwater flows or amenity concerns relating to odour). A matter arising in oral evidence only, was the potential for the interim SPS to be designed to include a provision for its overflow, during significant wet weather events, to flow into Lot 138(R) and the interim stormwater management basin. Council raised concern as to whether such overflow had been designed for and whether it may eventually flow into the sensitive environmental wetlands to the east.
In without prejudice conditions, Council adopted an approach requiring approval of the "detailed design" of the proposed SPS as a deferred commencement condition. The applicant's conditions included identical provisions but that this occur "prior to subdivision works certificate".
On this topic, the parties made submissions in regard to the following two cases: (1) Ballina Shire Council v Palm Lake Works Pty Ltd [2020] NSWLEC 41 (Palm Lake) and (2) Hoxton Park Residents Action Group Inc v Liverpool City Council (2011) 81 NSWLR 638; [2011] NSWCA 349 (Hoxton Park).
Mindful of Hoxton Park at [44], there seems to me no doubt that the potential impact in each instance would be one characterised as "flowing from the development the subject of the application". That is to say, particularly, that potential offsite impacts relating to SPS WS29, can be considered in regard to the question of likely impacts of the development.
The applicant's position is that based on a combination of the application details and the evidence available to the Court from the experts, including oral evidence, that: (1) a reasonable consideration of likely impacts can be undertaken by the Court, and (2) that the expert evidence is that there is a way that the scheme can be finalised to have no unreasonable impact.
There is a question of whether, mindful of the statutory scheme, it is necessary to prove the particulars of the case now or whether it is sufficient to say "there is an answer available" which can ensure provision of proposed sewerage infrastructure without bringing unreasonable impact. This question was examined to an extent in Palm Lake, although the statutory provisions were somewhat different, and relevantly so. A finding against the Commissioner in Palm Lake was that the Commissioner did not comply with cl 28(1) of State Environmental Planning Policy (Housing for Seniors or People with Disability) 2004 (Seniors SEPP), which has some points of comparison with cll 6.2 and 7.6 of CCLEP, and provides as follows:
28 Water and sewer
(1) A consent authority must not consent to a development application made pursuant to this Chapter unless the consent authority is satisfied, by written evidence, that the housing will be connected to a reticulated water system and have adequate facilities for the removal or disposal of sewage.
There were two reasons cited against the Commissioner's findings in Palm Lake in relation to cl 28(1) of Seniors SEPP. The first related to the Commissioner's opinion of satisfaction being dependent on future approvals to carry out works. This by way of a deferred commencement provision in the consent, at [51]. Council argued that similar circumstances applied in the case before me. That is to say, while a deferred commencement provision was the preferred approach on Council's part (ie when compared to operational conditions proposed by the applicant) under Palm Lake [50]-[51], the required finding of satisfaction could not be made on this basis anyway. The second point against the Commissioner in Palm Lake in relation to cl 28(1) of Seniors SEPP was in regard to the unavailability of "written evidence".
When I draw on the circumstances and findings of Palm Lake and the setting before me, there are some key differences. The most obvious difference is that the provisions of cll 6.2 and 7.6 of CCLEP do not bring a requirement for written evidence. This opens the door to the consideration of the oral evidence in the hearing, I believe. The second point is that in Palm Lake there was evidence that Council had expressed serious concerns about adverse impacts of carrying out the works to extend the relevant sewer and water infrastructure, as put (Palm Lake [51]):
"51 …The Commissioner was therefore on notice that there was a likelihood that the Council might not approve the works by reason of these adverse environmental impacts."
In this instance, I am not convinced that this is the situation before me. Council would surely be concerned that there be no adverse environmental impacts in this subdivision as well. There were concerns raised in regard to implications of sewage overflow, either in the environs of the interim SPS or at SW29; but I believe there were reasoned responses to this potential adverse impact forthcoming in the evidence. In any event, I understood Council's key concern as relating to the out of sequence staging, and related questions concerning land tenure and services maintenance and decommissioning matters, rather than environmental concerns (ROS par 7).
I can agree that there are limits to the material in the DA application itself to assist in considering the likely impacts of the proposed sewerage scheme. But further material has come forward since then. This includes the Services Report and written and oral expert evidence. I also acknowledge the particular matter of the environmental appraisal relating to the piped infrastructure being located within the northern side of the Jensen Road reservation (rather than the south) which would result in a reduced impact on existing trees. I can also say I was satisfied on the evidence that there should be no concerns about leaks from the new pressure line along Jensen Road (Tcpt, 14 March 2024 p 86 (30-34)).
As a matter of general principle, it does not seem to me unreasonable to adopt the position that a threshold, relevant to DA evaluation, can be reached on the question of the consideration of the likely impacts of the proposal for the proposed sewerage infrastructure, without the final resolution of the impact response. I found Mr Tran's evidence convincing that the path followed here in terms of a DA stage approval for a subdivision involving a SPS (permanent or interim), was to prepare a concept design such as proposed here. This is followed by the further stages of detailed design approval, in this instance as a condition of development consent, again requiring Council approval. I would be surprised if a significantly different process were to be adopted were the sewerage infrastructure to be permanent.
When I consider the likely impacts of the proposed scheme, whether it occurs as a deferred commencement condition or prior to subdivision certificate issue, either "arrangement" provides for Council approval of an ultimate sewerage scheme founded on the concept scheme outlined in the material before me. The material before me does suggest there is ample scope to ensure no unreasonable impacts would occur.
This brings me to the next topic relating to overall adequacy including consideration of servicing and maintenance of the proposed sewerage infrastructure.
Further explanation of the dispute
Council's concerns on this front are introduced at ROS, par 32:
"The key issues of servicing in this case arise from the combination of (i) private ownership of interim assets by one or more corporate entities, (ii) the siting of the assets on individual Torrens title lots, (iii) the absence of any specific (or even general) proposed mechanisms for continued funding of maintenance costs or decommissioning costs, and (iv) the foreseeable and not remote possibility that the entities may not retain sufficient funds or even exist."
I mainly focus on sewerage here, but note Council also repeats its concerns with regard to stormwater management.
Council has a general concern that the application contains insufficient details in regard to operating or maintaining the interim SPS and associated infrastructure. Such important matters as the operation of essential infrastructure should have been detailed in the application by way of a plan of management and it was inappropriate to rely on conditions of consent to resolve such important points of detail, according to Council. Council also points to Palm Lake [50]-[51] to support its position on this matter.
At a practical level, or in the "real world of possibilities", Council queried how problems which may arise would be addressed (ROS par 39):
"39…the Court would be interested to understand how the eventual owners of residential lots would be able to be assured of continued services. If a pipe blockage or break occurs beyond the individual lot, or the pumps malfunction - who would they call? What would be the arrangements for inspection, fault tracing, and rectification? How timely, or otherwise, would such arrangements likely be? Absent any of this detail, the Court would not (and indeed, could not) be satisfied that the essential services would continue to be available when needed - which is an ongoing need."
In terms of the future land owners, Council noted that they would have no obligation to fund the sewerage services they received. A community titles subdivision was preferred by Council, which brought a legislative structure to ensure ongoing maintenance.
Certain possible future scenarios were outlined by Council (ROS pars 49-51):
"49…It may be that applicants will not have, or retain, sufficient funds for ongoing maintenance. In such case, presumptions that the applicants will comply 8 with obligations afford little comfort, when the means of achieving compliance may not be available.
50 In similar vein, the prospect of external administration or insolvency is also not remote. The insolvency of development vehicles is not uncommon. Were that to occur, the assumption that an administrator or liquidator may elect not to expend limited funds (if such funds exist) on continuing maintenance is unsafe. Indeed, liquidators have powers to disclaim onerous property: eg. Willmott Growers Group Inc v. Willmott Forests Ltd (Receivers and Managers Apptd) (in liq) [2013] HCA 51.
51 Further, after having sold the unreserved lots to third parties and distributed the profits of the same, the owners of each applicant company could place the entities into such a external administration or liquidation. There would be a readily understandable economic rationale for this given the disconnection between the obligation to maintain and the absence of ongoing funding; and this would not involve any assumption that the applicant entities would not comply with their obligations - rather, only the recognition that they may not be able to do so."
The applicant argues that the place to look to understand Council requirements for servicing land subdivision for the site environs is the DSP. The points that the applicant took me to in the DSP which were of particular note included:
Whether the Court is satisfied that adequate arrangements have been made to make infrastructure for the disposal and management of sewage available when it is required
Firstly, in relation to the fourth avenue suggested by the applicant, I do not rely on the imposition of a bond in this instance. I agree with Council's closing submissions that this would be unlawful mindful of the findings in Charalambous v Ku-ring-gai Council (2017) 155 LGERA 352; [2007] NSWLEC 510 [13].
However, in general it seems to me that there is nothing before me to suggest that it is other than reasonable to accept as a default position, at least, that the normal process flow for land conversion would, with the grant of consent, occur in this instance. This development has already commenced on that well-worn path (of land conversion), with the end goal, land sales, as the means of return on the early capital investments that have occurred and would continue to occur until finalisation.
Stepping beyond the default position, it is also reasonable, as Council suggests to turn to "what-if" scenarios. While it is certainly possible that some of the outcomes suggested by Council may come to pass, there is a requirement to consider the adequacy of the responsive actions which are available. There are four main points in response. The first is at the general level and the obvious interest in securing land sales at optimal prices, which encourages the subdivision to not be seen as problematic in the market place. More particularly, here I am referring to a clear financial incentive to ensure that services, such as sewerage, are available to meet demand, as land sales roll out over the stages of land release.
The second relates to the collateral available from the residue lots themselves. Certainly in relation to stormwater and Lot 138(R) but also in regard to Lot 134(R) and the interim SPS and related infrastructure. On the evidence, this collateral seemed to outstrip the make good costs as I could understand them from the uncontested evidence of Mr Tran (noting Ms Englund's evidence on local residential land sale prices as ranging from $400,000 to $700,000).
The third point relates to the proposed positive covenant, which brings its own direct powers to Council in regard to inspections and repairs to the interim SPS and stormwater basin (see proposed Condition 5.22 and 5.19 in Annexure A). I can group this point with enforcement options under EPA Act. This also links to the applicant's point about an assumption of provision in accordance with consent conditions, but there is an in-built enforcement system which provides the EPA Act's legislative response to instances of failure.
The fourth point is concerned with the prospects for the regional level infrastructure to be constructed within a reasonable timeframe into the future. That is not to say that it would be constructed by 2026, as indicated in the DSP, but I also note Ms Englund's comments in regard to further subdivisions in the catchment, themselves moving along. This suggests to me that it would not be an overly long period before the regional infrastructure comes on line.
App D section 1 - which indicated the staging schema for the subdivision south of Johns Road to be to progress "moving from east to west to work within the constraints of the existing water and sewer services".
Part 10 of the DSP is concerned with "Works In Kind and Temporary Works". This part explains the availability of works in kind in lieu of making monetary contributions (an approach suggested by Council in these proceedings). In relation to works in kind in relation to temporary works it provides as follows (DSP p 9):
"It may be feasible to provide interim measures to service initial stages of a development in lieu of constructing major works up front. Such proposals will need to be assessed at the time of application. In these cases the applicant is responsible to fully fund the design and construction of the assets and donate them to Council with a payment of expected operational costs and a further payment towards the future decommissioning of the interim works. These costs are additional to any costs identified in this Plan."
Reference was also made to staging consideration in CCDCP which provides at Clause 5.9.2.2 that out of sequence staging "may occur if provision of infrastructure is provided by proponent" (Ex 2 Tab 18).
The applicant's response to Council's concerns has four "avenues" to it, as follows:
1. The applicant indicates it has a right to presumption that it will comply with the law (including conditions of consent requiring the installation, maintenance and decommissioning of the infrastructure).
2. The EPA Act includes enforcement provisions concerned with remedying a breach of any consent and its conditions.
3. The applicant has accepted an imposition of a positive covenant on title relating to the provision, operation and maintenance of the SPS, and including the powers prescribed by s 88F of the Conveyancing Act 1919, that Council staff are permitted to inspect and repair the facility at the owner's cost (proposed Condition 5.22).
4. The applicant has accepted imposition of a condition relating to a maintenance bond, although put as such (AWS par 3):
"It is only if, in the particular circumstances of this matter, the Court is not satisfied that any, or all, of those three avenues provide appropriate security (to 2 use that term in a neutral way) that it will become necessary to impose a condition of consent requiring security in the form of a bond."
For the record, I can also note here that Council references the relevant upfront cost at around $2.5M were the proposal to cover the relevant regional sewerage infrastructure to the near north of the site (to which the site could then drain direct). On the other hand, DSP charges for the subject subdivision were about $255k (Respondent's Outline of Submissions dated 15 March 2024 (ROS) par 20). However, if cost comparisons are to be made there would also be a need to factor in the sunk costs associated with the proposed interim infrastructure.
On this topic, I do note the Council's arguments suggesting the collateral I refer to above may itself be jeopardised in certain circumstances, this does not seem to me to be a reasonably likely event, and the balance of the responses available in regard to the four points nominated above, suggests to me that there are adequate response possibilities available overall.
On the basis of the reasoning above, I am satisfied that adequate arrangements have been made, including the form of proposed consent conditions (Annexure A) for operating and maintaining the proposed SPS and associated sewerage infrastructure and stormwater infrastructure.