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

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]

1. 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.
2. 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.
3. 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.
4. 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.

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

(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.

1. 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

(c) a condition that a referral authority requires to be included as referred to in sub-section (1)(a).

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]

88 It follows that a requirement by Council that the subdivider provide infrastructure contemplated by the DCP, is a significant election on its part as to the implementation of the DCP. It cannot in fairness so require and fail thereafter to give credit for the value of the works it has required.

89 The assessment of such credit is currently generally the subject of agreement, but unfortunately as the current case demonstrates, when agreement breaks down the statutory scheme does not offer a clear path forward.

90 One answer to this impasse would be to amend s.149 of the P&E Act to make clear that decisions of a collecting agency as to whether works are to be accepted in lieu of payment of levies, are reviewable by the Tribunal on their merits. In my view such a reform would provide a simple and convenient vehicle for resolution of the equities to which I have referred. A further possibility would be to amend s.46N(1)(d) to provide the responsible authority (and in turn the Tribunal on review) with the discretion to require works in lieu of payment by way of express permit condition.

91 A related matter agitated before the Tribunal in the present case related to the effect of s.62(5) and (6) of the P&E Act. The question did not bear directly upon the Tribunal's decision but does bear on the consequences of the view which I have expressed as to the effect of s.46N(1).

92 The proper construction of s.62(5) and (6) was further considered in the Hunt Club Estate case which is the subject of further appeal to this Court. As I have said, the Hunt Club Estate case involved the same subdivider and responsible authority as the present case, and related to land adjacent to the subject land in the present case. Although arising in a different way, it raised the same fundamental questions concerning the propriety of both imposing a requirement to pay a DCP levy and requiring the construction of necessary road works independently of the DCP by the permit holder. In that case the Tribunal stated at paragraphs 81 to 85:

81. Section 62(2) of the Act then sets out a range of other conditions that may be included in a permit as the responsible authority thinks fit. They of course are subject to the requirement that they are valid in terms of being relevant, reasonable and certain. The various limbs of section 62(2) are cumulative. They are each separated by the word 'and', which means that any or all of these types of conditions may be included, provided they are valid.

82. Section 62(5) deals with conditions that relate to either an approved development contributions plan or a condition requiring specified works, services or facilities to be provided or paid for. The options are set out in paragraphs (a), (b) and (c). Section 62(5)(a) enables a condition to implement an approved development contributions plan. Section 62(5)(b) relates to section 173 agreements and section 62(5)(c) relates to situations where the works, services or facilities will be provided by the applicant; or paid for wholly by the applicant; or provided or part 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. Each of the limbs of section 62(5) is separated by the word 'or'. This contrasts with use of the word 'and' separating the limbs of section 62(2).

83. Section 62(5) therefore covers the options of including a levy under an approved development contributions plan (bearing in mind that this is a mandatory condition that must be included in a permit where relevant); or the provision or payment for infrastructure under a Section 173 agreement; or the provision or payment of works, services or facilities where they are to be provided or paid for wholly by the applicant, or partly by the applicant and partly by a Minister, public authority or municipal council. It does not provide any option for the provision or payment for works, services or facilities where they are to be contributed towards partly by the applicant and partly by other developers.

84. Section 62(6) then provides that a 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 in accordance with subsection (5) or section 46M (scil. 46N); or a condition that a planning scheme requires or a referral authority requires to be included as referred to in subsection 1(a). We would say that this means there is no opportunity to include a condition requiring a person to pay an amount for, or provide works, services or facilities in part, where other contributions to those works, services or facilities will also be required from other persons. In other words, it eliminates the possibility of a de facto development contributions plan that is not an approved development contributions plan in accordance with Part 3B of the Act.

85. Read together, and in the context of the amendments to the Act in 2004 referred to earlier, we consider that omission of the option to enable a condition requiring a person to pay an amount for or provide works, services and facilities that will also be contributed to by payment or provision in part by other persons (other than solely by a Minister, public authority or municipal council) is deliberate. The combined effect of sections 62(5) and 62(6) was to overcome the doubts and deficiencies regarding the ability to impose conditions revealed by Curry v Melton CC and Christian Brothers Vic Pty Ltd v Banyule CC referred to in A New Development Contributions System for Victoria and the Minister's second reading speech for the Planning and Environment (Development Contributions) Act 2004. Together, sections 62(5) and 62(6) make it clear that there is no impediment to imposing a King Ranch[23] type condition on development and that there is no distinction to be drawn between works, services or facilities in this respect. However, King Ranch type conditions, whether imposed by some general condition making power or specifically under the provisions of section 62(2) of the Act, relating to the payment or provision of works, services or facilities, are subject to the limitations imposed by section 62(5). In other words, approved development contributions plans are the only means by which contributions to the provision of works, services or facilities can be obtained from more than one developer. This was the finding also of the Tribunal in Springhaven Property Group Pty Ltd v Whittlesea CC and Naprelac v Baw Baw SC. [24]

93 The question which arises as a consequence of my views with respect to s.46N(1), is whether a permit can require both payment in accordance with the DCP and the construction as a precondition to subdivision of necessary works, which the DCP contemplates will be constructed by Council.

94 The arguments concerning s.62 are relatively complex, but my conclusions with respect to them can be shortly stated, and I will set them out before explaining my reasons for each of them.

(a) However s.62(5) and (6) are construed, they cannot derogate from the specific obligation imposed by s.46N;

(b) Section 62(5)(a) is not directed to the conditions specifically required by s.46N;

(c) Section 62(5) is not on balance to be construed as setting out exclusive alternatives. It is not to be read as an "either or" provision.

(d) Section 62(6) is not to be construed as setting out exclusive alternatives. It is not to be read as an "either or" provision.

The Predominance of Section 46N over Section 62(5)

95 I have already stated my reasons for concluding that whatever may be the proper construction of s.62(5) and (6) the responsible authority must comply with s.46N. In the words of the Tribunal quoted above "this is a mandatory condition that must be included in a permit where relevant."[25]

96 It follows from this obligation that if the effect of s.62(5) and (6) is that a condition requiring payment of a levy pursuant to a DCP is inconsistent with a condition requiring the construction of necessary works (as the respondent contends), it is the latter which must give way.

97 Subsections 62(5) and (6) set out a series of provisions with respect to conditions requiring the provision of works, services and facilities. The Respondent submits the combination of subsections (5) and (6) effectively confines the potential for such conditions and prevents a requirement to provide necessary works being coupled with a requirement to pay a DCP levy when the DCP itself contemplates the construction of such works.

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

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

99 In my view this provision should be construed as referring to conditions other than conditions prescribed by s.46N(1).

100 A s.62(5)(a) condition may impose a requirement for works or implement constraints upon development, consequent upon the intended outcome from a development contributions plan; e.g. provide for a setback and landscaping works to buffer a proposed public facility such as a sewerage treatment plant.

101 In my view it must be understood to convey a power additional to that mandated by s.46N(1) otherwise it is otiose. There is no point in providing by s.62(5)(a) that something "may" be done if s.46N(1) already provides that it must be done. There is no relevant discretion capable of being conveyed by s.62(5)(a) if this is the intent of s.62(5)(a). In my view s.46N(1) envisages the imposition of conditions consequential upon a development contributions plan but additional to those required by s.46N(1), as envisaged by way of the opening words to s.46N(1): "Without limiting Section 62, ...".

102 If s.62(5)(a) is so read, then even if the word "or" were regarded as resulting in entirely discrete alternatives pursuant to each sub-section of s.62(5), the responsible authority would not be precluded by the terms of s.62(5) from granting a permit which both imposed a levy condition pursuant to s.46N(1) and required the provision of works pursuant to s.62(5)(c).

103 Subsections (5)(b) and (c) are in terms concerned with the provision of or payment for works, services or facilities, whereas (5)(a) is not. In turn, s.62(6) is likewise concerned with the payment for or provision of works, services or facilities.

104 Section 62(5)(c) expressly envisages that such works, services or facilities may be required on the land the subject of permit or other land as the result of the grant of the permit.

105 Section 62(6) commences with a general prohibition which is followed by exceptions. The first category of exception identified by s.62(6) is a condition imposed "in accordance with sub-section (5) or s.46N". The reference to s.46N reinforces the view that the operation of sub-s.(5) is directed to requirements other than s.46N requirements. If sub-s.(5) is regarded as duplicating the power found in s.46N, then it would be unnecessary to refer to 46N in sub-s.(6).

Does Section 62(5) Provide for Exclusive Alternatives?

106 It is convenient to repeat the terms of s.62(5):

(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.

107 I have not found this sub-section easy of construction and I accept that its meaning is open to serious debate. Nevertheless I will seek to elucidate its meaning.

108 The alternatives set out in s.62(5) are not introduced by the word "either" or "only".

109 Each of the alternatives is expressed as a discrete power introduced by the words (may) "include a condition". In my view a condition may be included in any one permit with respect to the alternatives enumerated in each subsection.

110 The internal words of each alternative are clearly not disjunctive. The phrase "works, services or facilities" does not mean that only works or services or facilities may be the subject of a condition.

111 The conjunctive "or" at the end of (a) and (b) is readily understood as providing in the same way for cumulative alternatives. Such a reading is not novel.

112 In Unity APA Ltd v Humes Ltd (No. 2)[26], Beach J considered the words "... the inspection shall be made by a registered company auditor or a duly qualified legal practitioner".

On one view of the matter, it could be argued that only one of such persons can be appointed. ... I consider the section means no more than that the person given permission to make the inspection must come from one or other category of persons. It does not mean that one person from each category cannot be appointed at the same time. In other words, the word 'or' is merely expressive of the category of persons who can be appointed. It is not used in a disjunctive sense.

113 In Minister for Immigration and Ethnic Affairs v Baker[27] the Court said:

It follows that the word 'or' should not be read as strictly disjunctive, but as a kind of hybrid of disjunctive and conjunctive, equivalent to 'or, or as well', conveying the meaning that the decision may be reached having regard to either or both kinds of conduct referred to.

114 The purpose of (5)(c) as amended in 2004 was plainly to make clear that a condition could be imposed in respect of works, services or facilities off-site which were necessary as a result of the grant of a permit. The Second Reading Speech stated:

Section 62 of the Act is to be amended to clarify that councils and referral authorities have power to recover, by planning 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 contributions 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.[28]

115 The power to impose a condition requiring provision of or payment towards necessary works additional to those provided for in a DCP was clearly contemplated. It follows that it is difficult to read subsection (5)(a) and (c) as exclusively disjunctive.[29] Moreover this is so although the present case illustrates a dilemma not anticipated by the Second Reading Speech, namely a situation where construction of works envisaged by a DCP cannot be reasonably anticipated to be undertaken expeditiously but is necessary for a particular development.

116 The test of necessity postulated in (5)(c) is not the test underpinning DCP requirements. Such requirements are premised upon demonstration of "the need for the works, services and facilities to the proposed development of land in the area." (Section 46K). The distinction is demonstrated by the underlying facts in this case. A modest local street may be "necessary" to serve a 232 lot subdivision but the proposed development of land in the area may justify a substantially higher standard of construction to collector road or subarterial status. As the Tribunal said in the Hunt Club Estate case:

The whole purpose of development contributions plans, both as dealt with in the Eddie Baron case and subsequently under Part 3B of the Planning and Environment Act 1987, has been based on the notion that the nexus required to be established between the development and the infrastructure -

"is not confined to the question of whether the facilities will be physically used by all the residents of the subdivision or whether the subdivision alone generates the needs for the facilities, but most be looked at as part of any wider framework. Where a subdivision forms part of a wider planning unit and where it has been established that social and physical infrastructure will be needed by that larger unit then it is sufficient if the nexus is established between the facilities and that wider unit."[30]

117 In my view the fact that the classes of conditions contemplated by (5)(a) and (c) serve different purposes,[31] strongly supports the conclusion they should not be interpreted as mutually exclusive. They are not simply different ways of doing the same thing.

118 Section 62(5)(c) includes works, services and facilities necessary on or to the land the subject of permits. It would be an anomalous result if no works necessary on the land as a result of the grant of a permit, could be required by a permit condition in every case where a DCP affected the land and was the subject of implementation by conditions.

119 The decision of the Tribunal in the Hunt Club Estate case placed significant weight upon the use of the conjunctive "and" to join the individual components of ss.62(1) and 62(2) as a reason to treat the use of "or" in subsection (5) as strictly disjunctive.[32]

120 Section 62(2) makes initial provision with respect to the conditions that a responsible authority may include on a permit. In that sub-section the categories enumerated are linked with the conjunctive "and". It may be doubted, however, that the process of amendment has necessarily resulted in completely coherent drafting techniques with respect to both sub-ss.(2) and (5) which further enumerates specific categories of condition which may be included in a permit. Incidental circumstances include:

• Sub-section (3)(l) ends with neither an "or" nor an "and" prior to sub-s.(m);
• Sub-section (5) in its current format is the product of the 2004 Act, whereas sub-s.(1) and (2) are not.

121 Further, and more significantly, although the introductory words to sub-ss.(2) and (5) are similar, they are not the same. Sub-section (2) enumerates a series of matters which are each included in the general power relating to "any other condition that it thinks fit".

122 Sub-section (5) in effect recommences the section with the words utilised in s.62(1):

"In deciding to grant a permit the responsible authority must (may) ..."

123 Having regard to all the considerations I have referred to, in my view the comparison between s.62(1) and (2) on the one hand and 62(5) on the other does not lead to a compelling inference that the alternatives contained in 62(5) are entirely disjunctive rather than cumulative.

124 In my view s.62(5) should on balance be read as setting out cumulative alternatives, the application of which will depend as a matter of discretion on what is fair and reasonable in the circumstances.

Does Section 62(6) Provide for Exclusive Alternatives?

125 It is convenient to repeat the terms of s.62(6):

(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

(c) a condition that a referral authority requires to be included as referred to in sub-section (1)(a).

126 If I am correct in my view of the effect of subsection 62(5)(a), or in my view that 62(5) does not state exclusive alternatives, then no difficulty arises under this subsection, whether it itself is construed entirely disjunctively or not. Nevertheless, it is desirable for the sake of completeness that I set out my views with respect to it.

127 The subsection as a whole bears on the power to impose "a condition" not "conditions". It governs what may be included in any individual condition.

128 In this respect it mirrors the terms of s.62(4).

(4) The responsible authority must not include in a permit a condition which is inconsistent -

(a) with the Building Act 1993; or

(c) a relevant determination of the Building Appeals Board under that Act in respect of the land to which the permit applies.

129 It is clear that s.62(4) results in sequential prohibitions relating to any individual condition. Likewise in my view s.62(6) sets out sequential exceptions to a prohibition relating to any individual condition.

130 There would be little point in construing s.62(6) as requiring a condition to be grounded in one only of (a), (b) or (c), when separate conditions could each be grounded individually in one or other of the components.

131 Further, it is in my view entirely possible that a s.46N condition could also be both a condition that a planning scheme requires (as is arguably the case here) and a condition a referral authority requires. As such it would fall within s.62(6)(a), (b) and (c). This also tends to support the view that the subsection comprises alternatives giving rise to a set of sequential prohibitions.

132 If the contrary view is taken then whenever the responsible authority takes the view that works or services are necessary as the result of a grant of a permit, and those works are themselves contemplated by a DCP it would be left with the following options:

(a) it can grant or refuse the permit, depending on its view as a matter of fact as to whether the works and services will be supplied pursuant to the DCP timeously in order to provide the necessary infrastructure; or

(b) it can impose a condition which requires the providing of the works and services as a precondition to the proposed development, but does not require the subdivider to provide them and hence does not fall within the terms of s.62(5) or (6). This will leave open the implementation of the DCP by agreement between the responsible authority and the subdivider or otherwise.

133 The apparent purpose of s.62(6) is that referred to in the Second Reading Speech as follows:

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 contributions plans.[33]

134 This statement, together with the background to the amendment, support the view that it was directed in significant part to clearly proscribing "informal" DCPs, following the controversy attaching to the decision in Curry v Shire of Melton.[34] This purpose does not, however, require the subsections to s.62(6) to be other than sequential alternatives.

135 This underlying context does not support the view that the construction for which the respondent contends in the present case is a sensible one.

136 There is no apparent purpose in not leaving open the possibility that a permit applicant may be required to provide necessary works or services in conjunction with an immediate permit, and required to enter an agreement pursuant to s.46N(1)(d) with the collecting agency leaving open the acceptance of works in lieu of payment of a relevant DCP levy.

137 The Tribunal in the Hunt Club Estate case also placed some weight on the use of the conjunction "and" in s.62(1) and (2) in order to construe s.62(6). As I have said, the more direct comparison is with s.62(4) in terms of terminology and in my view the reading of the section as a whole does not support an exclusively disjunctive construction of s.62(6).

138 I do not accept that the provisions of s.62(5) and (6) preclude the imposition of both a condition required by s.46N and a condition requiring that specified works necessary as a result of the grant of the permit be provided by the applicant, so as to justify derogation from the requirements of s.46N.

139 For the above reasons the appeal should be allowed and the decision of the Tribunal should be set aside. In summary:

(b) Section 46P gives the Council power as a collecting agency to allow a set-off for the value of works required of the subdivider;

(c) The specific requirements of s.46N prevail over the general provisions of s.62;

(d) Section 62(5)(a) is not concerned with conditions required by s.46N;

(e) Section 62(5) does not provide for exclusive alternatives; and

(f) Section 62(6) does not provide for exclusive alternatives.

140 My provisional view is that the matter should be remitted for further consideration in accordance with law by the same division of the Tribunal as heard it in the first instance, in order that the appropriate way forward may be further explored by the parties. I will, however, hear the parties as to the orders which should flow from my reasons.

[1] Insofar as it was contended that the road works required were strictly more than were reasonably necessary to service the subdivision this submission was put in support of its case as to the equity of the permit applicant's position in seeking a financial adjustment from the Council.

[2] See Project Blue Sky Inc v ABA [1998] HCA 28; (1998) 194 CLR 355, 381-382 (McHugh, Gummow, Kirby and Hayne JJ).

[3] Ibid at 384 and CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384, 408.(Brennan CJ, Dawson, Toohey and Gummow JJ)

[4] Dennis Family Corporation v Casey CC [2006] VCAT 2372, [32]-[52] (the"Hunt Club Estate case").

[5] [2000] VSC 352.

[6] Christian Brothers (Vic) Pty Ltd v Banyule City Council [2001] VCAT 2120.

[8] See Hunt Club Estate case [2006] VCAT 2372, [49].

1. [9] These guidelines themselves refer in part to disputes about statutory controls on planning conditions. "There is some dispute about the interpretation and application of this part of the Act. The validity of conditions has been reviewed at VCAT (Christian Brothers Vic Pty Ltd v Banyule City Council (2001) VCAT 2120) and through the Supreme Court (Curry v Melton Shire Council (2000) VSC 352). The debate is essentially about the interpretation of works, services and facilities and the validity of conditions that require works, services and facilities to be provided off-site (i.e. on land that is not part of or abutting the land subject to the planning permit), which are considered necessary as a result of the grant of the permit.": Development Contribution Guidelines, "Understanding Development Contributions" 16 June 2003, 8.

[10] Victoria, Parliamentary Debates, Legislative Assembly, 4 November 2004 (Ms Delahunty, Minister for Planning).

[12] s.6(2)(j) of the P&E Act provides for the incorporation of documents into planning schemes.

[13] I say on its face because of a further argument put by the respondent as to the effect of the words "without limiting s.62" to which argument I shall return.

[14] Section 62 was also amended by the Planning and Environment (Development Contributions) Act 2004.

[15] See Perpetual Executors and Trustees Assoc of Australia Ltd v FCT [1948] HCA 24; (1948) 77 CLR 1, 29.

[16] See ss.80, 84B(1), 85(1)(e) P&E Act.

[17] I do not accept the June 2003 Development Contribution Guidelines, referred to in the Second Reading Speech above, assist in the construction of s.46N(1). In my view they reflect the thrust but not the specific terms of the section. Neither the alternatives envisaged by s.46N(1)(c) nor the precise terms of s.46N(1)(d) are encapsulated entirely accurately. The guidelines relevantly state:

"The Planning and Environment Act 1987 provides that the requirement to pay a development infrastructure levy in accordance with a DCP must be specified in a condition on the planning permit. The planning permit condition may require the applicant to either:

? pay the levy prior to being issued a building permit under the Building Act 1993 or Statement of

Compliance under the Subdivision Act 1988, or

? enter into an agreement regarding the timing and staging of payments, or provide works-in-kind to

The planning permit conditions must be complied with if the development is to proceed, otherwise the

responsible authority can take steps to enforce the conditions.

When a planning permit has been issued with a condition requiring payment of a development

infrastructure levy, the requirement for a payment should be registered on council's accounting and

[18] Carson Simpson Pty Ltd v Casey CC [2006] VCAT 1725. [8]-[9].

[19] Although both the responsible authority and the collecting agency will in the present case be the Council: see s.46H.

[20] Carson Simpson Pty Ltd v Casey CC [2006] VCAT 1725, [41].

[21] The respondent contends that it would be required to carry out some $460,000 of works and that the levy reflects an estimate of approximately $190,000 in respect of the cost of such works.

[23] A reference to the decision of the High Court concerning Queensland legislation in Cardwell Shire Council v King Ranch (Australia) Pty Ltd [1984] HCA 39; (1984) 54 LGRA 110; (1984) 58 ALJR 386. The substance of the condition considered which required a contribution to the cost of bridge works and the provision of roadworks was held to be "reasonably required...by the subdivision of the land".

[24] Hunt Club Estate case [2006] VCAT 2372 (Citations omitted).

[25] Hunt Club Estate case [2006] VCAT 2372, [83]. Accepting that characterisation of a provision as "mandatory" is no longer to be regarded as the proper approach in determining its effect. Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355, 389-391.

[26] [1987] VicRp 43; [1987] VR 474, 481.

[27] (1997) 153 ALR 463 at 469-470.

[28] Victoria, Parliamentary Debates, Legislative Assembly, 4 November 2004 (Ms Delahunty, Minister for Planning), 1322-1323.

[29] Even is s.5(a) is read down as I believe it should be.

[30] Hunt Club Estate case [2006] VCAT 2372, [75] quoting Eddie Baron Constructions Pty Ltd v Shire of Pakenham 6 AATR 10, 30.

[31] Whether sub-s(5)(a) is regarded as in part repetitive of s.46N(1) or not repetitive in accordance with the view I have set out above.

"62. What conditions can be put on permits?

(2) The responsible authority may include any other condition that it thinks fit including -

(a) a condition that specified things are to be done to the satisfaction of the responsible authority a Minister, public authority, municipal council or referral authority; and

(b) a condition that the permit is not to come into effect unless a specified permit is cancelled or amended; and

(c) in relation to a permit for a use for a specified time, a condition that -

(i) any development carried out on the land under the permit is to be removed at the end of the specified time; or

(ii) the land is to be restored to a specified state at the end of the specified time; and

(d) a condition that the development is to be carried out in stages over the periods specified in or under the permit; and

(e) a condition providing that no compensation is payable under Part 5 in respect of anything done under the permit or setting out -

(i) the circumstances in which compensation will be paid for anything done under the permit; and

(ii) the amount, or the method of determining the amount, of compensation payable; and

(f) a condition that the owner of the land or applicant for the permit in anticipation of the applicant becoming owner of the land is to enter into an agreement with the responsible authority under section 173 within a specified period or before the use or development or a specified part of it starts; and

(g) a condition that the owner of the land or, if the applicant for the permit is not the owner of the land, the applicant on the applicant becoming the owner of the land is to enter into a covenant with the relevant Minister under Division 2 of Part 4 of the Heritage Act 1995 for the conservation of a registered place; and

(i) a condition that plans, drawings or other documents be prepared by the applicant and lodged with the responsible authority for approval before the use or development or a specified part of it starts; and

(j) a condition requiring changes to be made to any plan or drawing forming part of the application for the permit; and

(l) a condition stating that it considers that the economical and efficient subdivision, consolidation or servicing of, or access to, land requires the holder of the permit to acquire or remove -

(i) a right of way over the land covered by the permit; or

(ii) an easement over land not covered by the permit but in the vicinity of that land -

using the procedure in section 36 of the Subdivision Act 1988 and that the acquisition or removal will not result in an unreasonable loss of amenity in the area affected by the acquisition or removal;

(m) a condition requiring or authorising any of the things listed in the Table in section 24A(1) of the Subdivision Act 1988."

[33] Victoria, Parliamentary Debates, Legislative Assembly, 4 November 2004 (Ms Delahunty, Minister for Planning), 1323.

[34] [2000] VSC 352 ; and see Springhaven Property Group Pty Ltd v Whittlesea City Council [2005] VCAT 816.