Casey City Council v Carson Simpson Pty Ltd [2007] VSC 25

Supreme Court of Victoria|2007-07-05|Before: OSBORN J

Appeal from Victorian Civil and Administrative Tribunal on question of law - power and obligation to impose Development Contributions Plan levy - no discretion in responsible authority or VCAT on review to vary terms of the levy imposed by the planning scheme - consequential discretion in Council as collecting agency to accept works in lieu of levy - statutory alternatives as to form of appropriate condition - matter remitted to Tribunal for further consideration of appropriate alternative -Victorian Civil and Administrative Tribunal Act 1995 s.148 - Planning and Environment Act 1987 ss.6(2)(j), 46I, 46J, , , , , (1), (5)-(6), , (1), (1)(e).

1 This is an appeal by Casey City Council ("Council") pursuant to s.148 of the Victorian Civil and Administrative Tribunal Act 1995, in respect of a decision of the Victorian Civil and Administrative Tribunal.

2 The respondent is a land engineering and surveying consultant, acting as agent for a substantial landowner and subdivider of land within the Cranbourne East Urban Growth Corridor.

3 On 29 April 2005 the Council granted a permit to the respondent for the subdivision of a residential estate east of Narre Warren Road-Cranbourne Road, intended to accommodate a subdivision known as "the Brindalee Estate" comprising 232 residential lots in a series of stages.

4 The permit conditions required the partial construction of a portion of a new east-west road known as Linsell Boulevard.

5 Linsell Boulevard is ultimately proposed to be a four lane distributor road constructed to a "sub arterial" standard. The construction necessary to service the subdivision forming the subject matter of the permit, was considered to be two lanes over a portion of the length of the road (i.e. a portion of the proposed northern carriageway of what would ultimately be a divided road).

Prior to the certification of the first plan of subdivision under this permit the subject land must have abuttal to the future Linsell Boulevard road reserve along the whole of that portion of the southern boundary that is west of the Melbourne Water Pipetrack.

7 In turn, Condition 7 provided that before any road works associated with the subdivision started, detailed plans must be submitted to the satisfaction of the responsible authority. These must provide, among other things, for the partial construction of Linsell Boulevard.

Prior to the issue of a Statement of Compliance for stage one of the subdivision, Linsell Boulevard westerly from its intersection with Tangemere Way must be constructed so as to connect to the sealed pavement that will terminate at the intersection of Broad Oak Drive and Linsell Boulevard. The works on Linsell Boulevard must include 8.6 metre sealed pavement back of kerb to back of kerb, concrete kerb and channel, pedestrian/cycle path, drainage, and intersection works as necessary.

9 The permit applicant accepted the necessity for the physical construction of these road works as a pre-condition to the release of the relevant stage of its subdivision.[1] It objected, however, to bearing the cost of construction of the road in circumstances where it was independently required to pay a levy towards the cost of the construction of the road, by a further permit condition requiring contribution to be made to a Development Contributions Plan ("DCP").

10 The DCP was intended to fund the construction of Linsell Boulevard as part of a wider provision of infrastructure within the Urban Growth Corridor. The respondent took issue with what it characterised as "double dipping".

A Development Infrastructure Levy must be paid to the Responsible Authority in accordance with the provisions of the approved Development Contributions Plan for Local Structure Plan 3 Cranbourne East within the following specified time, namely after certification of the relevant plan of subdivision but not more than 21 days prior to the issue of a Statement of Compliance in respect of that plan.

12 The respondent appealed to the Tribunal against Conditions 7 and 25 with the intent of challenging the combined cost implications of the permit conditions.

13 By a decision dated 23 August 2006 the Tribunal directed that Condition 25 be amended by the addition of the following words:

The total cost of these works is to be set off against that portion of the contribution required to be made by the permit holder under the Development Contributions Plan that is not required under that plan to be paid to the State Government as a State Transport Infrastructure Contribution in relation to the completion of the electrification of the railway line and contribution towards upgrading the Narre Warren-Cranbourne and Berwick-Cranbourne Roads which portions of the total levy of $2,675 [per lot] in 1993 dollars are represented by $500 and $400 respectively, again in 1993 dollars which 1993 dollar values are to be adjusted for inflation by quarterly adjustments from 1 July 1994 in accordance with the General Consumer Price Index for capital cities.

14 It can be seen that the effect of the amended condition was to provide for a reduction from the levy otherwise payable pursuant to Condition 40.

15 The Council now appeals the decision of the Tribunal on the basis of a series of questions of law which challenge the power of the Tribunal to so direct:

(a) having regard to the relevant provisions of the planning scheme; and

(b) having regard to the relevant provisions of the Planning and Environment Act 1987 (the "P&E Act").

16 These questions fall to be determined in accordance with accepted principles of statutory construction. The most significant of these in the present case are:

(a) that the statute must be interpreted as a consistent whole to give effect to its purpose;[2] and

(b) that such purposes must be ascertained not only by reference to the words in issue but also by reference to their context including the background to the provision and its practical consequences.[3]

17 Section 35(a) of the Interpretation of Legislation Act 1984 further provides that in the interpretation of a provision of an Act a construction that would promote the purpose or object underlying the Act (whether or not that purpose or object is expressly stated in the Act) shall be preferred to a construction that would not promote that purpose or object.

18 Section 35(b) provides that consideration may be given to any matter or document that is relevant including but not limited to -

(i) all indications provided by the Act or subordinate instrument as printed by authority, including punctuation

(ii) reports of proceedings in any House of the Parliament.

19 In the present case the legislation governing DCPs is fundamentally concerned to provide a fair and practical system for the making of contributions by developers to infrastructure which serves not only the development itself, but also a wider area of which it forms part.

20 Subsequent to the decision of the Tribunal in the present matter, another division of the Tribunal considered development plan conditions relating to a further estate adjacent to the Brindalee Estate and known as the "Hunt Club Estate". The subdivision of this estate has given rise to dispute between the same subdivider and the same responsible authority as in the present case. The Tribunal in the Hunt Club Estate case very helpfully canvassed the background to the current legislation in some detail.[4]

In 1995 the Planning and Environment Act 1987 was amended to include Part 3B, which deals with development contributions. Sections 46H-46Q establish a system whereby councils may include in their planning schemes one or more development contributions plans for the purpose of levying contributions for the provision of works, services and facilities. A development contributions plan may provide for the imposition of a development infrastructure levy and/or the imposition of a community infrastructure levy in relation to the development of land in the area to which the plan applies. If there is an approved development contributions plan in a planning scheme which provides that a development infrastructure levy is payable in respect of the development of any land, then the responsible authority must include a condition in a planning permit for that development requiring payment of the levy.
Although not stated explicitly in Part 3B of the Act, it was assumed that approved development contributions plans would be based on the principles of need, equity, accountability and nexus enunciated in the Eddie Barron case.
Codifying the application of development contributions was intended to satisfy concerns held by the development industry about the unconstrained requisition of development contributions by councils. It was also intended to provide certainty to councils that, once they had justified the basis of a development contributions plan by an amendment to their planning scheme, the plan could not subsequently be challenged at appeal.
In support of Part 3B, and to reinforce the above intentions, the following changes were made to Section 62 of the Planning and Environment Act 1987, which came into operation on 1 June 1997, eighteen months after introduction of Part 3B. Section 62(2)(h) was deleted from the Act. Sub-sections (5) and (6) were added to Section 62 and they provided follows:

(5) In deciding to grant a permit, the responsible authority may-

(a) include a condition required to implement an approved development contributions plan; or

(b) include a condition that specified works which the responsible authority considers necessary as a result of the grant of the permit -

(ii) be paid for wholly by the applicant or partly by the applicant where the remaining cost is to be met by any Minister, referral authority, public authority or council providing the works.

(6) The responsible authority must not include in a permit a condition requiring a person to pay an amount for or provide services or facilities other than -

(a) a condition required to implement an approved development contributions plan; or

(b) a condition requiring services or facilities to be provided in accordance with an agreement under section 173.

Notwithstanding the introduction of Part 3B to the Planning and Environment Act 1987 (and inclusion of the Development Contributions Plan Overlay in the VPPs), few councils implemented approved development contributions plans within the meaning of the Act. The Minister for Planning set up a review of development contributions, which consulted widely with local government and the development industry during the period 2000-2003. The Development Contributions Review was intended to examine the system in practice and identify improvements which could be made to facilitate the better use of development contributions plans.

22 In addition by reason of the decision of Balmford J in Curry v Melton Shire Council[5] the practice of informal Development Contributions Plans (not incorporated into the planning scheme) had in 2000 been held to be invalid.

23 Further, there was some controversy as to the extent of the residual power to impose permit conditions requiring the provision of infrastructure works necessitated by a permitted development.[6] In particular issues arose because the then s.62(5) did not refer to off-site works, and the then s.62(6) referred only to services or facilities and not to works.[7]

24 The Government responded to this situation by conducting a review process with respect to development contributions which produced a report the conclusions of which were made the subject of public announcement.[8]

25 Amendments to the P&E Act were then introduced into Parliament. The background to these amendments was summarised by the Minister for Planning:

The purpose of this bill is to improve the effectiveness and workability of the existing development contributions system that was introduced in 1995 under the Planning and Environment Act 1987.

A development contribution under this act is a one-off payment or in-kind provision of works, services or facilities provided by a developer towards the provision of infrastructure required to meet the needs of a community resulting from the development.

Development contributions can encompass contributions for a range of physical and social infrastructure, such as roads, drainage and community facilities.

The results from the development contributions system established in 1995 have been disappointing, with only a handful of municipalities embracing the development contributions system. Difficulties with the development contributions system include the lack of certainty of what can be levied for, the restrictive $450 community infrastructure levy cap, and the difficulty of applying the current system to established urban areas and rural and regional Victoria. In short, the system was not working effectively for either councils or developers.

In the State Planning Agenda of December 1999, the government undertook to review the development contributions system established under the act. The review also responds to a key objective of Melbourne 2030 - to improve the delivery of services in newly developing suburbs.

The review was subject to an extensive consultation and road-testing process involving all of the key stakeholders, including councils and the development industry.

Flowing from this review, in May 2003 I announced a package of reforms to simplify and improve the operation of the development contributions system to meet the needs of all users. The changes fall into two implementation stages.

Stage 1 of the implementation program, which is now operational, involved three key reforms.

The first was the introduction of new development contributions guidelines, available online, providing a fairer, more transparent and accountable process for the preparation of development contribution plans.[9]

The second reform was a new ministerial direction for development contribution plans, providing direction on the works, services and facilities that may be funded under a development infrastructure levy. This direction enables essential family and children's facilities to be levied for and provided earlier in the subdivision process.

The third reform under stage 1 was a new building practice note providing guidance for the improved collection of community infrastructure levies at the building permit stage.

It is now time to complete the reform package. Stage 2 of the implementation process is the subject of this bill, and comprises four key legislative amendments.

The first legislative amendment is increasing the community infrastructure levy cap from $450 to $900 per dwelling.

The second amendment enables state agencies, in addition to councils, to directly collect and administer levies under a development contributions plan.

The third legislative amendment provides for the option of preparing a development contributions plan utilising a preset schedule of limited infrastructure charges.

The final amendment involves clarifying the use of planning permit conditions to require the provision of off-site infrastructure in defined circumstances.

I now draw attention to the key features fundamental to the effective operation of the Victorian development contributions system, which underpin the initiatives in this bill.

The revamped system will ensure all development contribution plans satisfy the tests of need, nexus, equity and accountability.

"Need" is the test by which the need for the proposed infrastructure must be demonstrated;

"Nexus" is the test of the connection between the new development and the infrastructure need generated;

"Equity" is the test of the fair and reasonable apportionment of the cost of providing the infrastructure; and

"Accountability" is the test of ensuring that funds collected must be spent on the infrastructure for which they were levied, and be accounted for in an open and transparent manner.

Development contribution plans are subject to the publicly contestable planning scheme amendment process. This ensures public exhibition of the plan, consideration of submissions by an independent planning panel, and the need for final approval by the Minister for Planning.[10]

26 The purpose of the amendment relevant to the case now before me was explained by the Minister as follows:

Clarifying the use of planning permit conditions to require the provision of off-site infrastructure in defined circumstances

The government has recognised that the current legislative provisions relating to permit conditions requiring payments for or provision of infrastructure are confusing and ambiguous.

Section 62 of the act is to be amended to clarify that councils and referral authorities have power to recover, by planning permit conditions, the cost of the impact of individual developments where a need for works, services or facilities is necessitated by the development.

This option ensures that, where development impacts cannot be reasonably anticipated and strategically planned for in advance through a development contribution plan, there is the ability for the off-site impacts directly attributable to the development to be addressed through permit conditions. For example, a fast food restaurant locating in an established area may generate a need for off-site traffic management works that would not otherwise have been required or anticipated.

However, it should be understood that permit conditioning provisions should not undermine the principle that development contributions applying to multiple landowners should be collected via development contribution plans.

The new Victorian development contributions system will be fair, transparent and accountable. It is about improving the workability of an outdated system that was not meeting the needs for either councils or the development industry.

The bill achieves a sensible balance in helping to deliver basic facilities to the community while ensuring a fair and transparent system for industry.[11]

27 In turn the amending 2004 Act stated as a purpose:

(d) to alter the provisions relating to conditions on planning permits for the provision of, or payment for, works or services or facilities.

28 I turn then first to the planning scheme provisions with which both this case and the Hunt Club Estate case were concerned and then to the statutory framework within which they fall to be applied.

29 Clause 45.06 of the Casey Planning Scheme provides for a Development Contributions Plan Overlay.

To identify areas which require the preparation of a Development Contributions Plan for the purpose of levying contributions for the provision of works, services and facilities before development can commence.

31 Clause 45.06-1 provides in part that a permit must not be granted to subdivide land subject to the overlay until a DCP has been incorporated into the scheme.

32 Further and significantly, the sub-clause provides:

Be consistent with the provisions of the relevant Development Contributions Plan
Include any conditions required to give effect to any contributions or levies imposed, conditions or requirements set out in the relevant schedule to this overlay. (My emphasis)

33 Clause 45.06-2 provides for the preparation of a DCP and states in part:

Specify the area to which the plan applies.
Set out the works, services and facilities to be funded through the plan, including the staging of the provision of those works, services and facilities.
Relate the need for the works, services and facilities to the proposed development of land in the area.
Specify the estimated costs of each of the works, services and facilities.
Specify the proportion of the total estimated costs of the works, services and facilities which is to be funded by the development infrastructure levy or community infrastructure levy or both.
Specify the land in the area and the types of development in respect of which a levy is payable and the method for determining the levy payable in respect of any development of land.
Provide for the procedures for the collection of a development infrastructure levy in respect to any development for which a permit is not required.

34 The schedule to the overlay which is relevant to the present application is Schedule 4. This provides as follows:

1.0 Area covered by this development contribution plan

Cranbourne East urban area within the DPO1 for the Cranbourne East area

Time of provision (years after beginning of development)

Proportion of cost attributable to development %

The levies payable by the development are specified in dollars per lot of all the land in the subdivision.

The amounts in this schedule are in 1993 dollars. The responsible authority will adjust these amounts quarterly for inflation, starting on 1 July 1994, based on the General Consumer Price Index for Capital Cities.

35 It can be seen that the "contributions or levies" (to use the language of 45.06-1) are required with respect to road and traffic management works, community activity centres, railway infrastructure and State road infrastructure. The latter matters are not infrastructure for which the Council is the development authority. They are distinguished in the terms and application of Condition 25 as reformulated by the Tribunal.

36 The schedule is concluded by a note which states:

This schedule sets out a summary of the costs and contributions prescribed in the Development Contributions Plan. Refer to the incorporated Development Contributions Plan for full details.__[12]

37 In turn the incorporated document, the Development Contributions Plan for Local Structure Plan Cranbourne - East (January 1997), elaborates the DCP. It sets out the policy background for the plan and details of the area it covers. It states that the DCP is limited to the provision of development infrastructure.

38 In paragraph 5 it outlines the infrastructure needs for the development of the area. It elaborates the nature of the required road works, land required for roads and road widening and required sites for community facilities.

39 At paragraph 6 the DCP sets out the nexus between the proposed infrastructure and new development. In paragraph 7 it details the cost of the infrastructure to be provided. Road work and community facility costs directed to the local area (including the construction of Linsell Boulevard) are further detailed in Appendix 4.

40 Paragraph 8 of the DCP sets out the basis of the apportionment of the infrastructure costs based on estimated additional households, and results in development contribution calculations on a per lot basis.

41 Paragraph 9 of the DCP states that the staging of infrastructure will be dependent on a series of factors but is envisaged to take place over a 20 year period starting in 1996.

42 Paragraphs 10 and 11 of the DCP relate to the requirement and administration of development contributions and state as follows:

Under Section 46J of the Planning and Environment Act this Development Contribution Plan requires the imposition of a development infrastructure levy as follows:

The imposition of a levy applies to all land located within the LSP 3 area specified in the plan attached as Appendix 2.
The imposition of the levy applies to all new residential, industrial and commercial lots or in the case of multi-dwelling, industrial and commercial developments, (the site area for) all new buildings. For any land the levy must be imposed only once.
The levies must be calculated on the following basis:

― $2,675 (1993 dollars) for every new residential lot, or in the case of multi-dwelling developments, each new dwelling (the first lot/dwelling being exempt);

― the Responsible Authority may adjust the amount of $2,675 quarterly for inflation, starting on 1 July 1994, based on the general CPI index for Capital Cities;

― $16,050 (1993 dollars) per hectare for new development on industrial or commercial land;

― the Responsible Authority may adjust the amount of $16,050 quarterly for inflation, starting on 1 July 1994, based on the general CPI index for Capital Cities;

― the levy must be paid prior to the issue of a Statement of Compliance for the subdivision that creates the lots, or in the case of other developments, prior to the issue of a building permit, unless another arrangement for payment has been agreed to by the Responsible Authority;

― the Responsible Authority may accept works or land in-lieu as fulfilling the contribution requirement (except in case of the railway contribution).

Any planning permit for a residential, industrial or commercial subdivision, or for a multi-dwelling development or any new industrial/commercial buildings located in the area specified in Appendix 2, must include a condition that requires a development contribution in accordance with the provisions of this Development Contributions Plan.

Any planning permit for residential, industrial or commercial subdivision or multi-dwelling or industrial/commercial developments within the designated area, will include a condition that requires a development contribution in accordance with the provisions of this Development Contributions Plan.

Payment will be required before a Statement of Compliance for the subdivision is issued or, in the case of buildings, before a building permit is issued, unless Council has agreed to another arrangement for payment.

Funds collected though the "level A contribution" in this Development Contributions Plan will be held by Council in a special reserve account for Local Structure Plan 1 Development Contributions. Any payments out of this account will only be spent on infrastructure within the LSP 3 area as specified in this Development Contributions Plan.

Funds collected through the "level B contribution" in this Development Contributions Plan will be held by Council in a special reserve account for Cranbourne/Hampton Park/Lyndhurst Strategy Plan Development Contributions. Any payments out of this account will only be spent on infrastructure within the Strategy Plan area as specified in this Development Contributions Plan.

The funds collected under the railway contribution and the State road infrastructure contribution, will be held in a special reserve account for these purposes and periodically transferred to the State Government.

Any expenditure from the above accounts will be specified in Council's Capital Improvement Program (which is a public document) and that Program will detail the extent to which infrastructure is funded from development contributions and/or other funding sources. (My emphasis)

43 In summary it follows from the provisions of the planning scheme that:

(a) The permit must include any condition "required to give effect to any contributions or levies imposed ... in the schedule to the overlay" (45.06-1);

(b) The schedule contains a summary of contributions by way of levies relevantly relating to five categories, one of which is "distributor roads";

(c) The schedule refers in turn to the DCP itself which is an incorporated document detailing the basis of the figures contained in the schedule. The DCP makes clear that the part of Linsell Boulevard that is in issue is intended to be funded in part by the levy contribution sought with respect to "distributor roads" in the local area;

(d) The DCP itself further specifically states that the responsible authority may accept works as fulfilling the contribution requirement.

44 On its face the phrase "required to give effect to ..." in cl.45.06-1 may preserve a residual discretion enabling the mechanism of effect to be achieved other than by permit condition requiring actual payment of the levy. More particularly it arguably embraces a condition requiring construction of works in lieu of payment of the levy.

45 Section 6(1) and (2)(f) and (l) of the P&E Act provide:

(a) must seek to further the objectives of planning in Victoria within the area covered by the scheme; and

(aa) must contain a municipal strategic statement, if the scheme applies to the whole or part of a municipal district; and

(b) may make any provision which relates to the use, development, protection or conservation of any land in the area.

(2) Without limiting sub-section (1), a planning scheme may -

(f) set out requirements for the provision of public utility services to land;

(l) provide for any other matter which this Act refers to as being included in a planning scheme.

46 The DCP is governed by the provisions of Part 3B of the P&E Act as amended by the Planning & Environment (Development Contributions) Act 2004. Such amendments imposed some additional constraints upon the pre-existing provisions of Part 3B of the P&E Act pursuant to which the DCP was originally formulated. They further distinguished between the role of development agencies and collecting agencies in respect of DCPs.

47 Section 46I provides that a planning scheme may include one or more Development Contributions Plans "for the purpose of levying contributions for the provision of works, services and facilities."

48 Section 46J states that a Development Contributions Plan may provide for either the imposition of a development infrastructure levy or a community infrastructure levy in relation to the development of land in the area to which the plan applies.

49 Section 46K provides for the contents of a Development Contributions Plan. Section 46K(1) amplifies the requirements based on previous legislation set out at cl.35.06-2 of the planning scheme including those quoted above.

50 Section 46N requires the implementation of the DCP upon the making of a relevant development application in the following terms:

46N. Collection of development infrastructure levy

(a) an approved development contributions plan provides that a development infrastructure levy is payable in respect of the development of any land; and

(b) an application is made under this Act for a permit to carry out that development on that land -

the responsible authority must include a condition in the permit that the applicant -

(c) pay the amount of the levy to the relevant collecting agency within a specified time or within a time specified by the collecting agency; or

(d) enter into an agreement with the relevant collecting agency to pay the amount of the levy within a time specified in the agreement. (My emphasis)

51 If as I have suggested cl.45.06-1 may preserve substantial discretion as to the form of condition required to give effect to contributions or levies imposed by a DCP, then s.46N(1) of the P&E Act on its face does not.[13] Section 46N(1) requires a condition obliging the permit applicant to pay the levy or enter into an agreement with the collection agency for payment of the levy.

52 Section 46P provides in part that the relevant collecting agency may accept the provision of land, works, services or facilities by the applicant in part or full satisfaction of the amount of the levy payable. Works may be constructed before or after the grant of the permit s.46P(3).

53 In a case where it is contemplated infrastructure works will be constructed by the subdivider, it would generally be appropriate in my view, to require an agreement to pay be reached with the collecting agency pursuant to s.46N(1)(d). Such an agreement will in turn enliven the collecting agency's discretion to accept works in lieu of monetary payment.

54 Section 46Q requires in part that a municipal council must apply the amount of any levy received as a development agency:

(a) for a purpose relating to the provision of works, services and facilities in respect of which the levy is imposed; and

(b) in accordance with the approved Development Contributions Plan.

55 Section 62(1) of the P&E Act in turn relevantly provides that in deciding to grant a permit, a responsible authority must -

(a) include any condition which the planning scheme requires to be included; and

(b) not include additional conditions which conflict with any condition included pursuant to (a).[14]

(5) In deciding to grant a permit, the responsible authority may ―

(a) include a condition required to implement an approved development contributions plan; or

(b) include a condition requiring specified works, services or facilities to be provided or paid for in accordance with an agreement under section 173; or

(c) include a condition that specified works, services or facilities that the responsible authority considers necessary to be provided on or to the land or other land as a result of the grant of the permit be-

(iii) provided or paid for partly by the applicant where the remaining cost is to be met by any Minister, public authority or municipal council providing the works, services or facilities.

(6) The responsible authority must not include in a permit a condition requiring a person to pay an amount for or provide works, services or facilities except-

(a) in accordance with sub-section (5) or section 46N; or

(b) a condition that a planning scheme requires to be included as referred to in sub-section (1)(a); or

57 The respondent submits that because s.46N(1) commences with the words "without limiting section 62", the apparent requirement for the imposition of a condition by the use of the word "must", should be read as conferring a discretion, having regard to the terms of s.62(5)(a). I reject that submission. The introductory words to s.46N(1) are not "subject to section 62". The word "must" should be given its plain meaning. The general discretion conveyed by s.62(5) must be read as subject to the specific requirements of s.46N(1).[15]

58 It follows from the above statutory scheme that the Council (and in turn the Tribunal):

(a) was required to implement the DCP upon the grant of a permit to subdivide and include a condition on permit either requiring payment of a development infrastructure levy in accordance with the DCP or requiring an agreement for such payment (s.46N);

(b) had the general power to include a condition upon a permit "required to implement a Development Contributions Plan" (s.62(5)(a));

(c) had the general power to include a condition that required that specified works which it was necessary to provide as a result of granting a permit be provided (s.62(5)(c));

(d) must include any condition in the permit which the planning scheme required to be included (s.62(1)(a)); and

(e) must not include additional conditions which conflicted with any condition which the planning scheme required to be included (s.62(1)(b)).

(a) may accept road works in part or full satisfaction of the obligation to make a development contribution (s.46P); and

(b) is bound to apply any levy for the purpose for which the levy was imposed (s.46Q).

60 The critical question for determination of this appeal is that raised by the first question of law set out in the notice of appeal, namely does amended Condition 25 formulated by the Tribunal give effect to the DCP referred to in it?

61 Section 46N(1) provided that the responsible authority must include a condition in the permit giving effect to the DCP in one of two specified ways, namely requiring payment of the levy or requiring an agreement to pay the amount of the levy.

62 Although s.46N(1) is not buttressed by an express equivalent to s.62(1)(b), it must be understood to implicitly require an effective condition, not one which is deprived of effect in part or wholly by some other condition providing for the relevant payment to be discounted.

63 The Tribunal was also so required to give effect to the DCP (exercising the powers of the responsible authority on review)[16] by including appropriate conditions in the permit.

64 In turn the Tribunal was also required by s.62(1)(a) and (b) to give effect to the planning scheme. The manner of such giving effect having already been specified by s.46N(1), despite the fact that the DCP itself contemplates the possible provision of works in lieu of payment of the levy.[17]

65 In the present case the Tribunal specifically found that (as was not contested) the road making requirement contained in Condition 25 was valid.

As things stand, this piece of road is needed for the subdivision to proceed. The responsible authority is quite right to make construction of that piece of road a condition precedent to the subdivision. We have a situation here where, although ultimate construction of the whole of this road to its eventual standard is contemplated for the future, neither the responsible authority nor any other authority has it in mind to construct the whole of it, or the portion required for this subdivision in the immediate future, within the time span within which the company wishes to proceed with this subdivision.

In these circumstances, the road will not be constructed, and the subdivision cannot proceed for the time being, unless the company constructs that portion of the road specified in Condition 25. As far as the responsible authority is concerned, if the company wants to construct the road so as to be able to proceed with the subdivision, then it should proceed to construct it and bear the cost of such construction.[18]

66 A condition requiring partial construction of the road was capable of being regarded as falling within the terms of s.62(5)(c) of the P&E Act. (I accept however that as Mr Wren submitted there may be a serious underlying question as to whether the proposed road needed to be constructed even in part to sub-arterial standards in order to serve a 232 lot subdivision.)

67 Nevertheless the key question with which the permit applicant and in turn the Tribunal were understandably concerned, was whether it was fair and equitable in the circumstances to also require the payment in full of the DCP levy.

It follows that the permit in its present form, containing both Condition 25 and 40, requires the company to pay twice in relation to the Condition 25 portion of Linsell Avenue. It must pay the levy and it must pay again to construct the Condition 25 portion of the road. The permit and its conditions provide no escape for the company, and no adjustment for the "double dipping" by the responsible authority. The only way the company can avoid paying twice is not to proceed with the subdivision. That is in spite of the circumstances that the subdivision is otherwise recognised as being in accordance with sound and ordinary planning by the fact that the permit has been granted.

69 As against this the Council contends that the developer cannot dictate to the Council the timing of expenditure, the amount of expenditure and purpose for which expenditure is made, by picking out one element of the distributor roads intended to be funded by the DCP and applying the cost of construction of this element in substantial discharge of its overall obligation to pay a levy. Furthermore, it is submitted the effect of the Tribunal's decision was not only that no or little moneys might be paid with respect to levies imposed by the planning scheme for purposes other than distributor roads, but that works referable to part of the provision of distributor roads would be accepted in lieu of levies in respect of other matters such as community centres.

70 In my view the scheme of the Act (see paragraphs 53-54 above):

(a) required the imposition of a condition implementing the requirement for a levy by reason of s.46N(1); but

(b) reserved to the Council as collecting authority thereafter, the discretion to accept works in lieu of payment of the levies (s.46P).

71 It may be argued that by paragraph 10 the DCP itself provided for acceptance of works in lieu of the levy, and that the employment of a mechanism authorised by the DCP, gave effect to the DCP.

72 There are I think two answers to this proposition. First, ss.46I, J and K of the P&E Act did not authorise a DCP to so provide. The purpose of a DCP as stated in 46A is "the purpose of levying contributions for the provision of works, services and facilities." Section 46J in turn provides that a DCP may provide for the imposition of a development infrastructure levy in relation to the development of land in the area to which the plan applies. It does not say that a DCP may provide for the acceptance of works in lieu of a levy. In turn, s.46K which provides for the contents of the plan provides the framework for the imposition of a development contributions levy. Having regard to this statutory scheme, the statement contained in paragraph 10 of the DCP relating to the acceptance of works in lieu of the levy, must be construed as giving effect to s.46P i.e. as a statement as to the potential manner of collection of levies. It cannot be construed as authorising the provision of works in lieu of the levy pursuant to the DCP itself.

73 Secondly, s.46N is prescriptive in its terms as to the alternative methods by which the relevant permit condition must give effect to the DCP. The responsible authority must include a condition in the permit that the applicant -

(c) pay the amount of the levy to the relevant collecting agency in the specified time or the time specified by the collecting agency; or

(d) enter into an agreement with the relevant collecting agency to pay the amount of the levy within a time specified in the agreement.

74 Discretion with respect to the mode of collection of levies is provided for in s.46P and is granted not to the responsible authority exercising the permit power, but to the "collecting agency" collecting the levy.[19] In this specific sense I accept the Council's submission that the question of whether works should be accepted in lieu of a levy "crosses the line" into the area reserved for governmental decision making as distinct from the exercise of the permit condition discretion.

75 Nevertheless in the event that the Council does not accept works in part discharge of the levy pursuant to s.46P in the present case, it will on the face of it have had and received monies to the use of the permit applicant, which it cannot apply to the provision of certain of the works in respect of which the levy was imposed, because such works will have been constructed by the applicant. Such monies would be calculated by reference to the relevant portion of the levy but not the actual cost to the works. Further, it would thereafter retain the right to receive additional levies from other contributors in respect of works, which it had required the permit applicant to construct for it. In these circumstances it would in substance be involved in "double dipping" unless the permit applicant was adequately reimbursed.

76 The Tribunal recorded that the Council recognised "to a certain limited extent" the injustice of the double dipping arrangement provided for in the original permit.

It is prepared to allow an offset in favour of the company against the levy contributions, although that is not provided for in the permit. It apparently considers that it would be doing this by way of an act of grace. It is not clear to us that it recognises a legal basis for compelling it to make this concession.[20]

77 The Tribunal found that a discount in the amount payable pursuant to the levy calculated by reference to the component of the levy referable to the estimated cost of the Linsell Boulevard works, would not cover the costs of the works undertaken by the permit applicant and intended to be covered by the levy. This was because first, the levy itself was premised upon a mis-estimation in relation to the yield of residential lots per hectare over the whole area of the Development Contributions Scheme. Secondly, the DCP had provided for an increase in the levy by reference to the General Consumer Price Index for capital cities, when in fact the cost of civil engineering works had escalated at a rate higher than that produced by the application of this index.[21]

78 Whilst there is no doubt that the Tribunal strove to achieve an equitable adjustment between the positions of the parties and did so for understandable reasons, in my view it was required to impose a condition in accordance with ss.46N and 62(1) which gave effect to the DCP. Further, it was not able to impose an additional condition which defeated the intent of the s.46N condition or conflicted with the condition required by s.62(1)(a) (see s.62(1)(b)). In my view the amendment to condition 25 did conflict with provisions of condition 40. It required the levy payable under the DCP to be discounted. Likewise condition 25 as amended resulted in non-compliance with s.46N.

79 It follows from my conclusions concerning Part 3B of the P&E Act, and in particular s.46N, and from my conclusions concerning s.62(1), that the Tribunal erred by amending Condition 25 and purporting to allow a set off with respect to the amount of the levy payable.

80 In turn the decision of the Tribunal must be set aside.

81 Nevertheless, the fairness of the primary obligation imposed with respect to works under condition 25 should in my view be reopened if the respondent so desires once the Tribunal's decision is set aside. Either amended condition 25 stands or it is at large.

82 Moreover, as I have said, it was open to the Tribunal not to require payment of the levy in accordance with s.46N(1)(c), but to require an agreement with the collecting agency pursuant to s.46N(1)(d). The terms of such an agreement may allow for some further resolution of the equities between the parties.

83 I do not accept the Council's submission that the question of the appropriateness of a requirement for an agreement is not one for the Council as responsible authority and on review the Tribunal. The terms of s.46N(1)(c) and (d) make clear that it is. The responsible authority has a choice as to the form of condition appropriate to the circumstances. In turn, as I have said, an agreement under s.46N(1)(d) may provide for payment in accordance with s.46P(2). What is required is an agreement with the collecting agency for payment in accordance with the powers it possesses as such. One of those powers is the right to accept works in lieu of money payment.

84 In cases where the Council elects to require a subdivider to provide infrastructure works contemplated by a DCP, it will be just and equitable that the value of those works is the subject of a set off pursuant to s.46P (insofar as that is practicable).

85 I say "elects" because it is always open to a responsible authority to stipulate the provision of necessary infrastructure, as a precondition to subdivision, without requiring the subdivider to be the provider (or indeed nominating whether a Commonwealth, State, local government or private entity is to be the provider). Such a condition simply stipulates the existence of collateral infrastructure e.g. a bridge, as a circumstance necessary to the subdivision proceeding in accordance with orderly planning. It does not provide a mechanism for achieving the fact.

86 If the Council requires the subdivider to construct works the subject of a DCP, however, it elects to implement the DCP in this way. If it did not so elect, the DCP would require implementation pursuant to contractual arrangements for value, at a time potentially delayed beyond that at which the subdivider may wish to proceed, but consistent with Council's program for the implementation of the DCP as a whole.

87 In so saying I accept the Council's submission that the DCP imposes no particular time frame upon the Council in the present case, and further that the statutory scheme contemplates the Council may not in fact be able to implement the DCP.[22]

At a glance

Court

Decision date

Before

Source

Judgment (353 paragraphs)

Parties

Legislation Cited (32)

Cases Cited (5)