Buyozo Pty Limited v Ku-ring-gai Council

Buyozo Pty Limited v Ku-ring-gai Council - [2021] NSWLEC 2 - NSWLEC 2020 case summary — Zoe

Section 7.11 of the EPAA relevantly provides that: 7.11 Contribution towards provision or improvement of amenities or services (1) If a consent authority is satisfied that development for which development consent is sought will or is likely to require the provision of or increase the demand for public amenities and public services within the area, the consent authority may grant the development consent subject to a condition requiring - (a) the dedication of land free of cost, or (b) the payment of a monetary contribution, or both. (2) A condition referred to in subsection (1) may be imposed only to require a reasonable dedication or contribution for the provision, extension or augmentation of the public amenities and public services concerned. (3) If - (a) a consent authority has, at any time, whether before or after the date of commencement of this Part, provided public amenities or public services within the area in preparation for or to facilitate the carrying out of development in the area, and (b) development for which development consent is sought will, if carried out, benefit from the provision of those public amenities or public services, the consent authority may grant the development consent subject to a condition requiring the payment of a monetary contribution towards recoupment of the cost of providing the public amenities or public services (being the cost as indexed in accordance with the regulations). (4) A condition referred to in subsection (3) may be imposed only to require a reasonable contribution towards recoupment of the cost concerned. (5) The consent authority may accept - (a) the dedication of land in part or full satisfaction of a condition imposed in accordance with subsection (3), 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). (6) If a consent authority proposes to impose a condition in accordance with subsection (1) or (3) in respect of development, the consent authority must take into consideration any land, money or other material public benefit that the applicant has elsewhere dedicated or provided free of cost within the area (or any adjoining area) or previously paid to the consent authority, other than - (a) a benefit provided as a condition of the grant of development consent under this Act, or (b) a benefit excluded from consideration under section 7.4(6).

[5]

As demonstrated by video footage of the development played to the Court and having regard to the plans attached to the modification application, the development consists of several storage floors of individual lockable storage units of varying sizes (the type invariably featured in American television shows such as Storage Wars or those involving serial killers). The units are accessed by corridors on each floor and the floors are connected by stairs and a lift. The development has several carparks, each of which has a dedicated loading and unloading bay (that was excluded from the GFA and contributions calculation). The corridors used to access the storage units, on the relevant ground floor, connect to the carparking on the ground floor. In the carparks, trolleys are located to transport the items to the storage units.
If the area is used as corridors (shown in green on the architectural plans included with the modification application), the area for business under the Contributions Plan reduces from 11,076m2 to 8,317m2. This means that, according to Buyozo, the GFA has been calculated incorrectly and there has been an overpayment of its contributions.
In their Joint Planning Expert Report dated 7 December 2020, Alison McCabe and Jeff Mead disagreed whether the GFA ought to be reduced under the Contributions Plan. Given that whether or not the corridors referred to above fell within the definition of "gross floor area" as that term is defined (see below) turned upon its proper construction, other than to assist the Court with the calculation of the GFA once correctly defined, it is difficult to ascertain the relevance of the Joint Planning Expert Report. The opinion of the joint expert planners as to the proper construction of "gross floor area" is, with great respect, irrelevant. This a question of law to be determined by the Court and the Court alone.
There is no provision for a refund under the either the consent or the Contributions Plan. As stated above, the contribution has been paid into the relevant contributions account. It has been mixed with all of the monies received by the Council for that account.

[7]

Proper Construction "Gross Floor Area"

More recently in R v A2; R v Magennis; R v Vaziri (2019) 373 ALR 214; [2019] HCA 35 Kiefel CJ and Keane J articulated the correct approach to statutory interpretation (at [32]-[37], citations omitted): [32] The method to be applied in construing a statute to ascertain the intended meaning of the words used is well settled. It commences with a consideration of the words of the provision itself, but it does not end there. A literal approach to construction, which requires the courts to obey the ordinary meaning or usage of the words of a provision, even if the result is improbable, has long been eschewed by this Court. It is now accepted that even words having an apparently clear ordinary or grammatical meaning may be ascribed a different legal meaning after the process of construction is complete. This is because consideration of the context for the provision may point to factors that tend against the ordinary usage of the words of the provision. [33] Consideration of the context for the provision is undertaken at the first stage of the process of construction. Context is to be understood in its widest sense. It includes surrounding statutory provisions, what may be drawn from other aspects of the statute and the statute as a whole. It extends to the mischief which it may be seen that the statute is intended to remedy. "Mischief" is an old expression. It may be understood to refer to a state of affairs which to date the law has not addressed. It is in that sense a defect in the law which is now sought to be remedied. The mischief may point most clearly to what it is that the statute seeks to achieve. [34] This is not to suggest that a very general purpose of a statute will necessarily provide much context for a particular provision or that the words of the provision should be lost sight of in the process of construction. These considerations were emphasised in the decisions of this Court upon which the Court of Criminal Appeal placed some weight. [35] The joint judgment in Alcan (NT) Alumina Pty Ltd v Cmr of Territory Revenue [(2009) 239 CLR 27 at 46-47 [47]; [2009] HCA 41] rejected an approach which paid no regard to the words of the provision and sought to apply the general purpose of the statute, to raise revenue, to derive a very different meaning from that which could be drawn from the terms of the provision. The general purpose said nothing meaningful about the provision, the text of which clearly enough conveyed its intended operation. Similarly, in Saeed v Minister for Immigration and Citizenship [(2010) 241 CLR 252 at 265 [32]-[34]; [2010] HCA 23] the court below was held to have failed to consider the actual terms of the section. A general purpose of the statute, to address shortcomings identified in an earlier decision of this Court, was not as useful as the intention revealed by the terms of the statute itself. In Baini v R [(2012) 246 CLR 469 at 476 [14]; [2012] HCA 59], it was necessary to reiterate that the question of whether there had been a "substantial miscarriage of justice" within the meaning of the relevant provision required consideration of the text of the provision, not resort to paraphrases of the statutory language in extrinsic materials, other cases and different legislation. [36] These cases serve to remind that the text of a statute is important, for it contains the words being construed, and that a very general purpose may not detract from the meaning of those words. As always with statutory construction, much depends upon the terms of the particular statute and what may be drawn from the context for and purpose of the provision. [37] None of these cases suggest a return to a literal approach to construction. They do not suggest that the text should not be read in context and by reference to the mischief to which the provision is directed. They do not deny the possibility, adverted to in CIC Insurance Ltd v Bankstown Football Club Ltd [(1997) 187 CLR 384 at 408], that in a particular case, "if the apparently plain words of a provision are read in the light of the mischief which the statute was designed to overcome and of the objects of the legislation, they may wear a very different appearance". When a literal meaning of words in a statute does not conform to the evident purpose or policy of the particular provision, it is entirely appropriate for the courts to depart from the literal meaning. A construction which promotes the purpose of a statute is to be preferred.
Buyozo submitted that the ordinary meaning of the text in the definition of "gross floor area" supported a finding that the corridors (the areas marked in green in the architectural plans) were excluded from its calculation. This is because with respect to a self-storage unit at the premises, the corridors leading to the entrance of the storage units are either spaces used for the purpose of loading or unloading goods, or in the alternative, constitute spaces being used for that purpose.
To the extent that it might be suggested that there are a some multiplicity of purposes, for example, that the corridors are also used for pedestrian access to the storage units, unlike the language used in the exemption contained in subparagraph (f) ("plant rooms, lift towers and other areas used exclusively for mechanical services or ducting", emphasis added), subparagraph (h) does not use language of exclusivity. Accordingly, the context surrounding the exception provided for in subparagraph (h) reinforces the plain and unambiguous textual interpretation of the term "gross floor area".
Turning to its purpose, the concept of GFA (not defined in the EPAA) is used by the Council in the Contributions Plan, in effect, as a measure of the demand on public services and amenities against which the contributions are calculated. The Contributions Plan requires the payment of a rate per m2 of gross floor area. If the contributions were to be levied by reference to some other measure (such as the site area or the floor area), then either the Contributions Plan would have stated this explicitly or the rate per m2 would vary depending on the differing uses of the site. To do otherwise would result in excessive contributions being levied, defeating the very exemptions provided for in the definition of "gross floor area".
By contrast, the Council argued that to adopt Buyozo's construction of subparagraph (h) of the term "gross floor area" would result in a definition afforded to that term that would give rise to inconsistent meanings depending upon the particular type of development under consideration. That is, the content of the GFA would change depending upon the purpose for which the term was being considered, contrary to the statutory purpose of the definition. The Council submitted that the term must be construed in a manner that permits clear application irrespective of its use and irrespective of the type of development under consideration. This is because the calculation of the GFA is used for a number of different purposes, not just to determine the quantum of contributions payable: it is used to calculate floor space ratio; it provides a means by which the bulk of a development may be assessed; and it contributes to the understanding and assessment of the intensity of a development.
The Council contended that the unloading and loading of goods occurred in the carpark of the premises and that the corridors merely conveyed the already loaded and unloaded goods to the storage units by the trolleys provided or by other means. It was the space where the goods were loaded or unloaded that fell within the exemption provided for in the definition of "gross floor area" (and which had already been excluded from the GFA and contributions calculation). The corridors were not "spaces" of loading or unloading for the purpose of subparagraph (h), but were used for conveyance of the goods and persons to the individual units.
The Council rejected the suggestion by Buyozo that the only operative part of the premises were the individual self-storage units, and therefore, to include other parts of the premises in the contributions calculation would be obviate the operation of the exceptions to the definition of "gross floor area". It was the Council's submission that the premises functioned as a single storage facility, "not as a loose agglomeration of multiple and independent individual storage units", and that any persons entitled to be on the premises would use the access corridors marked in green on the plans for access and circulation as common areas, and not to load and unload goods. The Council illustrated its argument by analogy to a supermarket, contending that if Buyozo's interpretation of the term "gross floor area" were accepted, then aisles in a supermarket would have to be excluded from any GFA calculation, which would result in perversity.
In my view, the difficulty with the Council's submissions is that they ignore, or at least impermissibly gloss over, the words "(including access to it)" in subparagraph (h) of the definition of "gross floor area". If, as may be accepted, the unloading and loading of goods occurs in the carpark (it is more than arguable, in my view, that the loading and unloading of goods is also likely to take place in the corridors outside the storage units depending on the size of the goods and the available space in the storage unit and would therefore be exempt from the GFA calculation on this basis alone), then the corridors are the areas that provide "access" to the space used for that activity. To hold otherwise is to defy common sense. Whether the goods are unloaded or loaded in the carpark or in the storage units themselves, the corridors marked in green on the architectural plans provide access to both spaces at the premises where this activity occurs. They are therefore exempt from the calculation of GFA as the text of that exception plainly and unambiguously provides. There is no warrant, in my opinion, to travel beyond the language in subparagraph (h) of the definition of "gross floor area" the search for its present meaning.
The Council's contention that the whole of the premises constitutes the storage facility while strictly speaking correct, is, in my view, not to the point. What is at issue is the calculation of the contributions referable to the "gross floor area" as that term is relevantly defined. That definition expressly excludes loading and unloading spaces and access to those spaces.
The analogy to supermarkets in the context of the present appeal is inapposite because, as Buyozo noted, the calculation of contributions for that type of development is gross lettable floor area and not GFA. This is because supermarket aisles are used for retail (and not merely business) purposes, notwithstanding the fact that from time to time it will also be used for the purpose of restocking (for example, toilet paper) shelves.
Comparison to a development such as IKEA is no less fraught. Not only would that development almost certainly be a retail development (for, by way of illustration, the purchase of tealight candles and self-assembled furniture) for the purpose of any contributions calculation, to the extent that the warehouse space prior to the checkouts where goods are routinely loaded and unloaded is accessed by a series of aisles, it is not fanciful to argue that those spaces would be exempt from the definition of GFA applying the exception contained in subparagraph (h) inasmuch as they are either used to access the spaces where the unloading and loading of goods occurs or they are the spaces where that activity takes place.
In my opinion, the submissions of Buyozo as to the proper construction of subparagraph (h) of the term "gross floor area" should be accepted. The corridors marked in green on the architectural plans provide access to the spaces where the unloading and loading of goods occurs. Accordingly, they are exempt from the calculation of the GFA of the premises. Having been erroneously included, this means that there has been an overpayment of the contributions payable by Buyozo insofar as those contributions were based on the calculation of the GFA of the premises.

[8]

Power and Utility

It was agreed that the Court had jurisdiction to vary a condition under s 7.11 of the EPAA even after though the contributions had been paid (Arncliffe Development Pty Ltd v Rockdale City Council [2003] NSWLEC 297; (2003) 129 LGERA 189 at [11]-[12]).
There is also no doubt that the Court has the power to modify condition 30 pursuant to s 4.55 of the EPAA. There is no relevant statutory limit on the exercise of that power other than the question of whether the development as modified will be "substantially the same", which it was agreed is not an issue in this appeal.
As Jagot J held in Arkibuilt Pty Ltd v Ku-ring-gai Council [2006] NSWLEC 502; (2006) 67 NSWLR 529 the fact that Buyozo has taken the "benefit" of the consent does not prevent it from subsequently challenging the "burden" of the contributions condition by way of modification, nor is it necessary for there to be a change in circumstances (at [68]-[70]): [68] The Council submitted that the discretionary power in s 94B(3) of the EPA Act should not be exercised in the applicant's favour (if condition 69 was found to be unreasonable to any extent) because the applicant had taken the benefit of the development consent knowing about the s 94 contributions payable and, thereafter, had modified the development consent without, until recently, raising any issue about the s 94 contributions. The Council said that there had been no change of circumstances since the grant of development consent. Hence, the facts were analogous to those in Progress and Securities Pty Ltd v North Sydney Municipal Council (1988) 66 LGERA 236, where Bignold J (at 245) found that although the power in s 102 (then the relevant modification power) was not limited to cases in which circumstances had changed, a discretionary consideration that weighed strongly against granting the application in that matter was the conduct of the applicant in accepting the benefit of the development consent, and then belatedly seeking to avoid the burden imposed by that consent. Bignold J determined that it would be contrary to the public interest to enable the particular consent in that matter to be modified as sought. [69] In Fairfield City Council v N & S Olivieri Pty Ltd [2003] NSWCA 41, Cripps AJA (with whom Spigelman CJ and Santow JA agreed) observed (at [82] to [84]) that it was one thing to assert that a party who has accepted the benefit of a transaction must accept its burden, and another to conclude that a condition not authorised by law cannot be challenged if development is carried out. Delay may be a relevant discretionary factor, but there is evident difficulty in attempting to apply any "benefit/burden" doctrine in planning law. [70] In this case, the court granted the development consent. It seems to me there may be many reasons why, in that context, an applicant may not place in issue the s 94 contributions during the s 97 appeal. I do not consider that an applicant, thereafter, is necessary precluded from seeking to modify s 94 conditions by not having raised the issue during the s 97 appeal. Further, the applicant became aware, only relatively recently, that the Council itself had agreed to the modification of a s 94 condition imposed on a nearby development, which reduced the overall s 94 contributions payable by some 25%. The applicant said that, if necessary, that fact itself constituted a relevant change of circumstances. Consistent with the reasoning in Progress and Securities, I agree that the applicant need not point to any change of circumstances in order to modify the development consent. In the particular circumstances of this case, I can see no reason why I would not exercise my discretion in favour of the applicant, having found that, to a certain extent, condition 69 is unreasonable.
To the extent that the Council suggested that because the contributions have been paid and received by it pursuant to condition 30 the consent was spent or exhausted, and therefore, there was nothing left to modify, such a concept is not known to law and is contrary to existing authority (see the cases referred to in Agricultural Equity Investments Pty Ltd v Westlime Pty Ltd (No 3) [2015] NSWLEC 75 at [111]-[119]). It is also inconsistent with section 1.37.2 of the Contributions Plan (see above).
The Council further argued that there was no utility in modifying condition 30 again because the contributions had already been received by the Council and mixed with the monies received by it in its contributions account. To reiterate, there is no provision under either the consent or the Contributions Plan to compel any refund of the money to be refunded by the Council to Buyozo.
While utility is not a matter finding specific expression in s 4.15(1) of the EPAA (although it may be considered to be an aspect of the public interest), the Court retains a discretion as to whether a condition imposing a contribution should be modified. The fact that the contributions have been paid is plainly relevant to any exercise of that discretion (Arncliffe at [16] and Malcolm Smith Pty Ltd v Hills Shire Council [2019] NSWLEC 1096 at [23] and [45]).
There are at least three reasons why the modification of condition 30 has utility: 1. first, there is public utility in correctly calculating the "gross floor area" upon the proper construction of that term in the LEP. There is undeniable utility in the modification of a condition of consent to properly reflect and give effect to the operation of the Contributions Plan; 2. second, if the consent is modified as sought by Buyozo, then to the extent that there has been an overpayment, irrespective of whether or not the Council repays the monies voluntarily, the Council must take the overpayment into account prior to the imposition of any condition in respect of any future development application (see s 7.11(1), (3) and (6) of the EPAA); and 3. third, the overpayment may also give rise to an equitable claim, such as that of unjust enrichment, albeit in another suit in another court.

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