Broker Pty Limited v Shoalhaven City Council

4 On 24 October 2006 the Council adopted CP 77.5.2. CP 77.5.2 applies to land identified by cl 9 and Appendix D (the contribution area). This area includes the land affected by consents SP9348, SP9450 and SP9500. 5 CP 77.5.2 authorised the Council to impose, by way of condition, a requirement on development consents in respect of, inter alia, residential development within the contribution area. The contribution is to be paid at a rate of $9,183 per ET (cl 15) where a single detached dwelling is rated as 1 ET (cl 14.1). 6 By cl 17.3 of CP 77.5.2, accredited certifiers are required to impose on complying development certificates a condition requiring monetary contributions in accordance with the plan. The contribution is leviable under CP 77.5.2 for the purpose of roadworks, in particular (but not limited to) a link road and roundabout connecting the northern part of the area affected by the plan to the Princes Highway ("the link road"). 7 CP 77.5.2 estimates (cl 11.3) the costs of the works to which it relates of $2,034,683 of which the Council will pay from its own funds $188,807, leaving $1,845,876 to be met by contributions levied upon all lots created in the contribution area (cl 13.1), including all lots created as a result of the registration of the subdivisions to which consent was given by consents SP9348, SP9450 and SP9500. 8 CP 77.5.2 estimates the total number of ETs within the contribution area at 201 (cl 14.2). This produces the contribution rate of $9,183 per ET (cl 15). Clause 17.7 of CP 77.5.2 provides that the Council "will exempt lots within the Price Parkway subdivision which have an existing dwelling or have had Section 149 certificates or binding contract for sale issued as at 1 July 2006". Of the 28 lots within the three subdivisions only seven were within the exempted categories referred to in cl 17.7 as at 1 July 2006.

Amendment of CP process 9 There was a tender of an agreed bundle of documents which included a Milton CBD Traffic Impact Study - Development of a Traffic and Pedestrian Management Plan dated 14 September 2004. The study identified the need for a link road and roundabout connecting to the Princes Highway. Subsequently the Shoalhaven Planning Policy No. 1 Development Guidelines - For Certain Residential 2(c) zoned land - Milton-Ulladulla was adopted by Council on 23 November 2004. A review of the Contributions Plan Amendment Number 77 (Area 5) Amendment No. 1 was conducted and a report of the General Manager, Planning Group provided at an ordinary general meeting on 27 June 2006. On the same date Council resolved to amend the CP, which became the draft CP 77.5.2. This was notified to land owners by letter dated 17 July 2006 and the exhibition of the draft CP 77.5.2 was advertised in a local newspaper on 19 July 2006. A copy of the draft CP 77.5.2 as exhibited was included in the bundle. 10 A submission regarding draft CP 77.5.2 dated 31 August 2006 was prepared for the Applicant by Planning Workshop Australia. On 15 September 2006 Council decided to re-exhibit the draft CP 77.5.2 with minor alterations and various supporting documents, commencing on 20 September 2006 (in response to critical submissions including from the Applicant). This re-exhibition was advertised in a local newspaper on 20 September 2006. A copy of the draft CP 77.5.2 as re-exhibited was included in the bundle. 11 On 26 September 2006 the Report of the General Manager-Strategic Planning Group on the re-exhibition was provided to Council and Council resolved to receive it. A report on the submissions on the re-exhibition and an addendum report summarising submissions were provided to Council on 24 October 2006. On the same date Council resolved to adopt the draft plan as publicly exhibited. This was notified in the local newspaper on 1 November 2006 and a copy included in the tender bundle.

Legislation 12 Section 94(1) of the EP&A Act provides: If a consent authority is satisfied that development for which development consent is sought will or is likely to require the provision of or increase the demand for public amenities and public services within the area, the consent authority may grant the development consent subject to a condition requiring: (a) the dedication of land free of cost, or (b) the payment of a monetary contribution, or both.

13 Section 94EA of the Environmental Planning and Assessment Act 1979 (the EP&A Act) states: (1) A council, or two or more councils, may, subject to and in accordance with the regulations, prepare and approve a contributions plan for the purpose of imposing conditions under this Division (other than Subdivision 4).

14 Section 81A of the EP&A Act provides: (1) Erection of buildings A development consent that enables the erection of a building is sufficient to authorise the use of the building when erected for the purpose for which it was erected if that purpose is specified in the development application… …

(3) Subdivision of land A development consent that enables the subdivision of land may authorise the carrying out of any physical activity in, on, under or over land in connection with the subdivision, including the construction of roads and stormwater drainage systems.

15 Section 85A of the EP&A Act provides: (1) Application An applicant may, in accordance with the regulations, apply to: (a) the council, or (b) an accredited certifier, for a complying development certificate. … (9) In determining the application, the council or the accredited certifier must impose a condition that is required to be imposed under Division 6 in relation to the complying development. (Division 6 deals with s 94 contributions)

Applicant's submissions (i) contribution plan amendment beyond power 16 The Applicant argued that there has been a breach of the power to make or amend a contribution plan under s 94EA(1). The terms of CP 77.5.2 permit the Council to impose upon a development consent for the erection of a dwelling house on any of the lots in the Price Parkway subdivisions, other than those exempted, a condition requiring the payment of $9,183 for roadworks. The CP also requires a certifier to impose a like condition on a complying development certificate. CP 77.5.2 applies notwithstanding that contributions have been paid in respect of roadworks on a basis which necessarily assumed the erection of a dwelling-house on the same allotment and was calculated upon that assumption at the time that subdivision consent was granted as identified in cl 1.5 of the CP. The amendment of the plan (CP 77.5.2) was not empowered by s 94(1) because it was not to enable the Council to impose conditions which concerned the demand for public amenities and services from the subdivision development. That had already been done at the time the three Price Parkway subdivision consents were assessed.

17 If the contributions levied in relation to the Price Parkway subdivisions under the CP in force in 2003 and 2004 were lawful, the demand from these three subdivision developments was then assessed by the Council at the time of granting the consents, on the basis that each lot would have a single dwelling. The CP in force at the time provided for demand to be assessed on the basis that single dwellings would be placed on the lots. That demand having been assessed it is beyond power for the Council to make or amend the CP to enable further contributions to meet demand for public facilities or services where no further demand exists beyond the subdivision development already assessed. It is therefore beyond power to create the circumstance that the amount for roadworks can be levied on the complying development certificate sought for a single dwelling house to be constructed on the subdivided lot.

18 The consent for residential subdivision is an implied consent for the use of the land for residential purposes, at the rate of one dwelling house per lot. The notices of determination of the grants of development consent are described as being for residential subdivision in all three consents. This proposed construction of the consents accords with the nature of the development consent granted, that is, residential subdivision. The assessment of demand for public facilities and services at subdivision stage therefore includes the assessment of the residential use of the land to be subdivided. 19 Alternatively, the conditions imposed on the three subdivision consents were authorised for the reasons identified in McIntyre v Pittwater Council [2000] NSWLEC 160 by Talbot J at [66], [67]: Whether or not the development for which consent is sought will or is likely to require the provision of or increase the demand for public amenities and public services is to be determined by reference to the possibilities arising from any change brought about by the proposed development rather than confining attention to the initial limited effect of defining boundaries of individual allotments. The determining authority is entitled to assume that the subdivision is occurring to facilitate the use of the land for a permissible purpose. In the present case that use has been identified as an industrial use which may be carried out within the zone in accordance with the provisions of the LEP. The subdivision of the land immediately raises the prospect that the land will be put to a different use to that which is existing and that the land will be developed in accordance with the new pattern of subdivision. 20 As identified in McIntyre, it is appropriate that conditions be imposed on subdivision consents which take into account the likely demand for public amenities and services. That having been done at subdivision stage there is no basis for amending a contributions plan to enable further levies to meet the demand from the subdivision when there is no change in the demand for services from that assessed at the subdivision stage. To do so is to engage in "double dipping" whereby contributions are sought twice for the same demand for public facilities. (ii) Wednesbury unreasonableness 21 If unsuccessful on its first ground the Council raised an alternative ground that the making of the CP was unreasonable in the sense identified in Associated Provincial Picture Houses Ltd v Wednesbury Corporation (1948) 1 KB 223. Firstly, no reasonable council would decide to make a CP which was unlawful (which requires that I find for the Council on the first argument in any event). Secondly, the decision to make the amended plan in the form it was made was irrational and therefore unreasonable, see Murrumbidgee Groundwater Preservation Association Inc v Minister for Natural Resources (2005) 138 LGERA 11 at 45 [129], where Spigelman CJ (with whom Beazley and Tobias JJA agreed) said: Perhaps the most appropriate formulation is whether the decision is 'illogical, irrational or lacking a basis in findings or inferences of fact supported on logical grounds': Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 (2003) 77 ALJR 1165 at [52] and [37], [173]; see also Minister for Immigration and Multicultural and Indigenous Affairs v SGLB (2004) 78 ALJR 992 at [38]. 22 When various illogicalities in the amended CP are considered in total they support a finding that the making of the plan was unreasonable. Firstly, cl 17.7 deals specifically with the Price Parkway subdivisions in providing exemptions in certain circumstances. The CP does not explain how any shortfall in the plan will be made up in the event that certain lots counted in the 201 ETs are exempted. (The Council submitted that the Council report made at the time the amended CP was approved by the Council recognises that the Council will make up any shortfall). Exempting "lots…which have an existing dwelling" is meaningless. Such dwellings cannot attract any liability for contributions as there will be no relevant consent required which could trigger an obligation to pay a s 94 contribution. The provision exempting lots for which a s 149 certificate has been issued is without rational explanation because s 149 only requires that the name of the relevant contributions plan be identified. A s 149 certificate issued after 1 July 2006 will or may be the same on this aspect as one issued before that date. (The Addendum Report of the General Manager, Strategic Planning Group stated that purchasers would have certainty as the amount of the contribution is noted on s 149 certificates). 23 Furthermore, cl 17.7 does not distinguish between planning certificates applied for by the owner who is now applying for consent or a complying development certificate on the one hand and certificates issued to any other person who, at some stage prior to 1 July 2006, may have had reason to apply for one or the other. Thus, if X has applied in February 2006 for a certificate and received it in March 2006, but thereafter does not proceed with any purchase of the land, and Y decides to buy the land in July 2006 and then applies for her own planning certificate, Y is apparently entitled to exemption in relation to any application she may make to erect a dwelling. There can be no rational explanation for this outcome. 24 If the other basis for exemption (that a lot had "a binding contract for sale issued as at 1 July 2006") it is equally unreasonable, if indeed it is comprehensible. A "binding contract for sale" need not, if the parties agree, be completed; yet a subsequent purchaser is apparently entitled to exemption upon the basis that a previous intending purchaser would, had she completed, have been entitled to exemption. When all these matters are considered together the Council's decision to amend the CP was unreasonable in the Wednesbury sense. Council's submissions (i) CP amendment beyond power 25 The Applicant's primary argument is really a merits review of the application of the Council's CP and is premature. When an application for a complying development certificate is made to the Council and a contribution in accordance with the amended CP levied, there will be appeal rights available to this Court for an argument on the merits of imposing such a levy. There is no ground available in judicial review proceedings to consider the issues raised by the Applicant. 26 The fact that the s 94 plan has been adopted after the subdivision consents have been granted cannot make the adoption of such a plan illegal (or irrational).

27 There is no breach of the EP&A Act arising in the circumstances of the amendment of the CP. The Council is able to make a CP at any time which deals with meeting demand for public amenities and services. There is no complaint from the Applicant that the statutory process for the making of a CP has not been followed. There is no constraint in applying a CP in force at the time that an application for development or a complying development certificate for a dwelling house is made because of a decision made in relation to an earlier development application for subdivision. Both are separate developments to which s 94(1) can apply. The CP recognises that there can be a contribution levied for a more intensive development than the 1 ET calculation. There is a right to claim further contributions under subsequent applications which reflect the demand created by more intensive development such as more than 1 ET. 28 Neither the EP&A Act nor departmental guidelines for the making of a contribution plan prohibit the imposition of s 94 contributions at the development application stage or complying development stage for dwellings (s 86(9) and s 94EC(1) of the Act). Such applications are new applications and must be assessed afresh at the time of receipt under s 79C including under the contributions plan as then in force. The Council's response to the demand for public services from the subdivisions has changed and is reflected in the amended CP. That is not illegal. 29 An approval of a subdivision application is not an approval of the use of land for a certain purpose nor does s 81A(3) of the EP&A Act provide for that construction. The construction contended for by the Applicant is not in accordance with the development consents for subdivision or the Act. If the subdivision consents included implied consent to use for residential purposes, that implied consent would be unconditional. The Council would not properly consider the matters set out in s 79C. 30 If a subsequent purchaser of land in the Price Parkway subdivisions lodges an application for a complying development certificate, the Council will not lack power to impose conditions by reason of a past consent considered when the project identified by the current CP was not contemplated by the Council. There is no "double dipping" because the link road the subject of the amended CP was not the subject of a levy imposed by the development consent conditions when the subdivision applications were approved. (ii) Wednesbury unreasonableness 31 The Applicant bears the onus of proof that the amended plan is unreasonable in the Wednesbury sense, and the test is onerous as identified in numerous cases such as Weal v Bathurst City Council (2000) 111 LGERA 181, Lesnewski v Mosman Municipal Council [2004] NSWLEC 99 and Anderson v Minister for Infrastructure Planning and Natural Resources [2006] NSWLEC 725. The Council's decision-making process was rational, being based on a traffic study which identified the need for a new link road as a result of all the subdivisions occurring in the particular area which included the Price Parkway subdivisions. When the decision to amend the CP was made, the Council had before it the reports of the General Manager - Strategic Planning Group identifying the need for the amendment. The Council had material before it upon which it could reasonably form a conclusion about the proposed amendment. The amendment of the CP was approved through the usual Council decision-making processes. It is clear from the Council officer's report made at the time of approval of the amendment to the CP that the Council will make up any shortfall in the amount obtained through s 94 contributions. The Council can provide for exemptions in a CP and has done so in relation to the Price Parkway subdivisions. 32 Adoption of a contributions plan after subdivision consents have been granted cannot make the adoption irrational. The Applicant has failed to meet the stringent test for establishing unreasonableness. Finding (i) CP amendment beyond power 33 As submitted by the Applicant's counsel the imposition of s 94 contributions for the provision of public amenities and services for residential subdivision applications is a well entrenched practice in NSW. Such contributions under s 94(1) must be imposed in accordance with a contributions plan made under s 94EA(1). The focus of the Applicant's argument was whether it is lawful for a Council, having imposed s 94 contributions in accordance with a contributions plan at the subdivision stage, to later change the contributions plan to provide for levies for a new public facility (here, a new link road) when demand from the subdivision is unchanged to that assessed at the subdivision stage on the basis of one ET per lot. 34 This argument does not take into account the structure of the EP&A Act in relation to the approval of development as provided for in Div 2, Pt 4, and Div 6 concerning contributions under s 94(1). An application for development consent or a complying development certificate under Div 2, and the council's obligation to assess the impact of development under s 79C, is separate from Div 6. The wide definition of development in s 4 of the EP&A Act and the requirements in Div 2, particularly in s 76A which provides for development consent or a complying development certificate to be provided for under a local environmental plan, means that each development application must be assessed anew and determined separately from any previous development consent. The same applies for a complying development certificate whether issued by the council or a certifier under s 85A. In this case the parties informed me that a dwelling house complying with certain standards is complying development under the LEP as provided for by s 76A(5). The contributions plan in force at the time of the assessment of a new application for development applies. In this case contributions for a new facility not previously the subject of contributions are now provided for in CP 77.5.2 and will apply (subject to further amendment) to a new development application or application for a complying development certificate. 35 The reasonableness of the imposition of conditions requiring further contributions for the new facility (the link road) crystallises in the future when a development consent or a complying development certificate is sought for a dwelling on one of the subdivided lots and conditions requiring contributions for the new link road are imposed. The structure of the EP&A Act reinforces the Council's argument that these proceedings are inappropriate and there is no "double dipping" for s 94 contributions for the link road. I will now consider the specific arguments put by the Applicant. Is consent to residential subdivision consent to use of land for residential purposes? 36 The Applicant first argued that the grants of subdivision consents for the Price Parkway subdivisions were an implied consent for the use of land in a subdivision for a residential purpose. If this construction of the consents, and s 81A of the EP&A Act, were accepted it would bolster the Applicant's legal case that as demand for the subdivision and its use for residential purposes occurred when the Price Parkway subdivisions consents were granted it cannot be considered again if a dwelling house approval is sought on a subdivided lot. 37 The three consents state that they are for residential subdivision, it being the usual course that applications for subdivision identify the future use of the land to enable an appropriate merits assessment to be undertaken by a council. Development is defined in s 4 of the EP&A Act to include, inter alia, the use of land. Section 76A provides that if an environmental planning instrument specifies development which may not be carried out except with development consent then that consent must be obtained. A dwelling house complying with certain standards is complying development under the LEP as provided for by s 76A(5). Section 81A(3) of the EP&A Act does not state that subdivision consent includes consent for use of the land. It does specify that consent authorises the carrying out of physical activity in connection with the subdivision. This is in contrast to s 81A(1) which states that a development consent for a building is consent for the use for the purpose it is erected for. 38 Similarly, for complying development provided for in a local environmental plan under s 76A(5) the equivalent provision to s 81A(1) is s 85(3) which states that a complying certificate for a building authorises the use of the building for the purpose it is erected for. The absence of these words in relation to subdivision consents in s 81A(3), and its equivalent for complying development in s 85(6), suggests that I should not infer that the consent for subdivision impliedly includes consent for the use of the land for residential purposes. 39 This conclusion is reinforced by the specific provisions of s 81A(3) where consent for subdivision is not expressed to include consent for use, unlike s 81A(1). Further, that consent is required, whether by development consent or complying development certificate, arises separately from the subdivision consent under the EP&A Act. The separate development consent or complying development certificate must be assessed on its merits under the contributions plan in force at the time such an application is considered by a council. Further, as submitted by the Council, if an implied consent for residential use was given at the approval of subdivision stage the assessment under s 79C would not be able to be conducted in the face of a hypothetical use for residential purposes as its impact would be undefined. 40 No case law was found to support the Applicant's submission that a development consent for a residential subdivision is also an implied consent to its use for residential purposes. I do not agree that such implied consent can be inferred in the absence of specific provisions in the EP&A Act.

Subdivision consent facilitates use of land 41 The Applicant argued alternatively that provided that the contributions levied under the three subdivision consents in the Price Parkway subdivisions were lawful, about which there was no dispute, then the Council has assessed the demand for public amenities and services from the subdivisions. The basis for the imposition of s 94 contributions was as identified in McIntyre as set out at 19 above. Demand should be assessed only once for a subdivision and its residential use. There was no power for the Council to make thereafter an amended contributions plan which dealt with that demand again. The demand from the three subdivisions assessed by the Council when development consent was granted was based on the contributions plan in force. That contributions plan provided for demand to be calculated on the basis that one single dwelling will be located on the lots. Subsequent applications for approval of a single dwelling have already had demand for their use assessed. 42 The difficulty with applying this alternative argument is that, as stated above in 34, the power to make a contributions plan under s 94EA(1) is separate from the decision making process undertaken under s 94(1) as part of the process of granting development consent. There is no legal basis for limiting the power to make a contributions plan because of conditions levied when a development consent has been granted previously relying on an earlier contributions plan. 43 The Applicant argued these proceedings raised issues that should be determined in a merit appeal against conditions of development consent. The issues of double dipping and unreasonableness raised by the Applicant may be pursued as a merit appeal against the imposition of development consent conditions in the future. An applicant for development consent for a dwelling house on the Price Parkway subdivisions could have a s 94 contribution required as a condition of development consent. That applicant would have appeal rights to this Court to challenge the imposition of such a condition on the merits. There has not yet been such an appeal lodged. If lodged the reasonableness of the imposition of a contribution for a new facility not contemplated at subdivision stage could be considered in light of clause 1.5 of the CP (par 2 above) in force at the approval of subdivision stage. I do not express any view in this judgment on the prospects of any such appeal. 44 For a complying development certificate, under s 85A(9) a council or certifier must impose contributions as a condition required under Div 6 (s 94 contributions). An applicant for a complying development certificate has no appeal right against the determination of an application for a complying development certificate under s 85A(10). Presumably an alternative to seeking a complying development certificate if appeal rights were sought would be to apply for a development consent. The existence, or not, of appeal rights is not determinative of the legal issues raised in this case. While the rationale for these proceedings according to the Applicant's counsel was to avoid individual applicants for complying development certificates for one of the Price Parkway subdivisions lots having to each lodge a separate appeal, that does not provide a legal foundation for the Applicant's case. (ii) Wednesbury unreasonableness 45 I have found against the Applicant on the first ground and that ground founded the first submission put in relation to the Council's decision being unreasonable in the Wednesbury sense that no reasonable council would make a contributions plan that was illegal. That ground therefore fails. 46 I have set out in detail the Applicant's submissions in the second argument on why the decision to make the CP was unreasonable at par 22-24. That argument focussed on the three exemptions provided in cl 17.7 of CP 77.5.2 and stated these were irrational when all three matters identified were considered in total. Demonstrating that there has been unreasonable behaviour to the Wednesbury standard is a high hurdle to overcome, as identified in numerous cases, see Weal per Mason P at 188. The Applicant relied on Murrumbidgee at 129 to argue the Council's decision was irrational but the application of the principle in that case in the context of a complicated water management plan does not assist the Applicant in demonstrating irrationality by the Council in making CP 77.5.2. 47 The process followed by the Council in amending the CP is identified at par 9 -11. The steps included obtaining a traffic impact study which identified the need for the new link road, a review of the existing CP and its proposed amendment, public exhibition of the draft amended CP, consideration of submissions about the draft plan and re-exhibition of the plan to the public. A number of submissions referred to the arguments made in this hearing so that the Council was aware of concerns such as "double dipping". When the Council's decision making process in terms of the steps taken and as disclosed in the relevant Council reports about the amendment to the CP are considered I agree with the Council's submissions that there is not irrational behaviour disclosed. While there was particular focus on the exemptions in cl 17.7, these were considered by the Council and there is a rationale provided in the Council's reports for why the exemptions were considered desirable. The Council recognises that it will make up any shortfall in the contributions collected as a result of the exemptions operating. The high hurdle of demonstrating unreasonableness in the Wednesbury sense has been not been overcome by the Applicant's case. 48 This application fails and should be dismissed. The usual costs order in Class 4 proceedings is that costs follow the event suggesting that as the Council has been successful it should have its costs. I have not heard specific argument on costs. I will make a costs order that the Applicant should pay the Respondent's costs as agreed or assessed in fourteen (14) days unless a Notice of Motion is filed before then seeking a different costs order. Orders 49 The Court makes the following orders: 1. The Class 4 application is dismissed. 2. Costs are reserved. 3. Exhibits are to be returned.

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