Curry v Melton Shire Council [2000] VSC 352

Whether, if Condition 17 was invalid, it was severable from the rest of the permit.

Interpretation of Legislation Act 1984; s 35

Planning and Environment Act 1987; ss 46H, 62(1), (2) (5), (6), 173, 174, 181, 182

Planning and Environment (Development Contributions) Act 1995; s 62(2)(h)

Cardwell Shire Council v King Ranch Australia Pty Ltd [1984] HCA 39; (1984) 53 ALR 632

Commissioner for Railways (NSW) v Agalianos [1955] HCA 27; (1955) 92 CLR 390

Kent County Council v Kingsway Investments (Kent) Ltd [1971] AC 72

Re Boucher [1995] VicRp 7; [1995] 1 VR 110

Spurling v Development Underwriting [1963] VR 1

2. This is an appeal on a question of law under section 148 of the Victorian Civil and Administrative Tribunal Act 1998 ("the VCAT Act") against part of the order made by the Victorian Civil and Administrative Tribunal ("the Tribunal") on 23 February 2000 in its Planning List. Leave to appeal was granted by this Court on 3 May 2000.

5. On 30 April 1999 the respondent ("the Council"), as responsible authority under the Melton Planning Scheme, issued to the appellant a permit to subdivide certain land in Bulmans Road, Melton into 208 lots. The appellant applied to the Tribunal under section 80 of the Planning and Environment Act 1987 ("the Act") for review of certain conditions in the permit, one of which, condition 17, read:

17. The owner must enter into an agreement under Section 173 of [the Act] with the Responsible Authority to provide for services and facilities or contributions towards services and facilities required to meet the needs of population growth from residential subdivision of the subject land to the satisfaction of the Responsible Authority.

Condition No. 17 shall be replaced by the following:

Prior to the issue of the first Statement of Compliance under the Subdivision Act 1988 in respect of the subdivision of the land into the residential allotments for sale to the public, the Owner of the land must enter into an agreement with the Responsible Authority under section 173 of [the Act] which, in addition to the usual machinery provision provides that:

s The Owner of the land is to contribute $4175 per lot (at the time a Statement of Compliance is issued for that lot) to the provision of services and facilities to service the residents that will reside on the land in accordance with the Development Contributions Plan - Melton Township August 1999.

s The levy per lot or the overall levy is to be adjusted having regard to the agreed cost of proposed works on Bulmans Road which are part of the said Development Contributions Plan.

s If the Development Contributions Plan - Melton Township - August 1999 is approved and incorporated into the Planning Scheme, there is a mechanism for repaying or topping up, as the case may be the Owner's contribution provided that the top up cannot be required after the issue of a Statement of Compliance for the subdivision of the land into residential allotments for sale to the public.

17. The appeal is against that clause of the Tribunal's order, the sole ground of appeal being that the Tribunal did not have power to impose the replacement condition 17 ("the condition"). The appellant seeks an order of the Court varying the order of the Tribunal by the deletion of the condition.

21. The provisions of the Act relating to section 173 agreements and relevant for present purposes are sections 173, 174, 181 and 182, which read as follows, so far as relevant:

173. Responsible authority may enter into agreements

(1) A responsible authority may enter into an agreement with an owner of land in the area covered by a planning scheme for which it is a responsible authority.

(1) An agreement must be under seal and must bind the owner to the covenants specified in the agreement.

(2) An agreement may provide for any one or more of the following matters -

(a) the prohibition, restriction or regulation of the use or development of the land;

(b) the conditions subject to which the land may be used or developed for specified purposes;

(d) any matter incidental to any one or more of the above matters.

(1) A responsible authority may apply to the Registrar of Titles to register an agreement relating to land other than Crown land.

(2) An application must include a copy of the agreement to which it relates and the prescribed particulars.

(3) The Registrar of Titles must make a recording of the agreement in the Register.

(a) the burden of any covenant in the agreement runs with the land affected; and

(b) the responsible authority may enforce the covenant against any person deriving title from any person who entered into the covenant as if it were a restrictive covenant despite the fact that it may be positive in nature or that it is not for the benefit of any land of the responsible authority.

41. Of more direct relevance to the issues in this case is section 62 of the Act, the relevant provisions of which are:

(1) In deciding to grant a permit, the responsible authority must -

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

(b) not include additional conditions which conflict with any condition included under paragraph (a).

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

(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;

(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.

Paragraphs (a) to (e), (i) to (j) and (l) to (m) of sub-section 62(2) specify particular kinds of conditions which it is not necessary to set out here.

61. Sub-sections 62(5) and (6) of the Act were introduced with effect from 30 November 1995 by the Planning and Environment (Development Contributions) Act 1995 ("the Development Contributions Act"). The former paragraph 62(2)(h) of the Act was repealed by the Development Contributions Act with effect from 30 May 1997, that is, eighteen months after the introduction of sub-sections 62(5) and (6). Paragraph 62(2)(h) read as follows immediately before its repeal:

(h) a condition that specified works, services or facilities which the responsible authority considers necessary as a result of the grant of the permit be provided or paid for in any one or more of the following ways -

(i) be provided on or to the land or other land by the applicant; or

(ii) be paid for in whole or in part by the applicant; or

(iii) be provided on or to the land by agreement between the owner of the land or applicant and any Minister, referral authority, public authority or council providing the works, services or facilities;

67. The expression "approved development contributions plan", which appears in paragraphs 62(5)(a) and 62(6)(a), is defined in the following terms in section 46H of the Act:

"approved development contributions plan" means a development contributions plan which forms part of an approved planning scheme;

Section 46H appears in Part 3B, comprising sections 46H to 46Q and dealing generally with the genesis, nature and effect of a development contributions plan ("DCP"). Section 62 is found in Part 4 of the Act, not in Part 3B. However, neither counsel suggested that the definition in section 46H was not applicable to section 62, and reading the Act as a whole it can clearly be seen that Parliament intended the expression to have the same meaning in Part 4 as in Part 3B. The provisions of Part 3B make clear that a DCP is of no effect until it becomes an "approved DCP". As Dixon CJ said in Commissioner for Railways (NSW) v Agalianos [1955] HCA 27; (1955) 92 CLR 390 at 397:

. . .the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed.

74. Very briefly, a DCP is a mechanism applied in an expanding urban municipality, where residential subdivisions are being developed by different individuals, and it is necessary for the council of the municipality to fund infrastructure such as roads, drainage and open space not falling within the confines of any one subdivision. Melton is such a municipality. The DCP must set out the area to which it applies and the works, services and facilities to be funded, specify the estimated costs and provide procedures for the collection from the subdividers of a development infrastructure levy, being a proportion of the costs of the infrastructure for the area in question (section 46K). There is provision, through conditions on the permit for the development, for payment of the levy to be made to the relevant municipal council (section 46N), and for the levy to be applied by that council only in accordance with the DCP (section 46Q).

77. Until the repeal of paragraph 62(2)(h) took effect on 30 May 1997, it would have been possible for the Council to obtain funding for the relevant infrastructure from developers pursuant to that provision. The delayed operation of that repeal was presumably intended to allow councils time to prepare DCPs and have them approved by incorporation in their planning schemes, while continuing in the mean time to fund infrastructure under paragraph 62(2)(h), that is, without the mechanism of a DCP.

81. The Melton Shire Council has caused to be prepared by consultants to the Council a draft DCP which was formally adopted on 12 August 1999 as policy to be applied throughout the Melton Township area, and is in four parts, each applying to a different sector of the Melton Township. The DCP which is relevant to this proceeding applies to the north-west sector. The draft DCP has not been incorporated into the Melton Planning Scheme ("the planning scheme") and thus is not an "approved" DCP.

85. Mr Morris, for the appellant, submitted that because the DCP was not an approved DCP, paragraph 62(5)(a) did not empower the making of the condition. I did not understand Mr Wright, for the Council, to join issue with that submission. The question is thus whether the condition is otherwise authorised.

89. Mr Morris submitted that paragraph 62(5)(b) did not enable the making of the condition. That paragraph envisaged two situations: first, in sub-paragraph (b)(i), the situation where a single developer was required to provide (i.e. to construct, not merely to pay for) specified works on the subject land or to the subject land (works "to the subject land" comprising, for example, a crossover from a road outside the subdivision on to the subdivision); and second, in sub-paragraph (b)(ii), the situation where specified works were to be paid for by the developer, either alone or jointly with a Minister, referral authority, public authority or council. In either of those cases, Mr Morris submitted, the Act envisaged a condition being imposed on a permit requiring the works to be provided or the payment made without the preparation of an approved DCP.

92. In his submission, there were three reasons why paragraph 62(5)(b) did not operate to enable the condition. First, the condition did not require that "specified works. . . be provided on or to the land"; what the condition required was the payment of money to a pool to be used for the provision of specified works. Second, the condition did not require that the works "be paid for wholly by the applicant or partly by the applicant where the remaining cost is to be met by . . ." the several authorities set out in sub-paragraph (ii). The intention behind the condition was that a number of different developers contribute to the cost of the specified works. Third, not all of the services and facilities specified in the draft DCP were in fact "works".

95. As to the third point, some of the money to be raised by the development contributions levy is to be expended on the purchase of land for open space and land for community centres. The word "works" is defined in sub-section 3(1) of the Act as follows:

"works" includes any change to the natural or existing condition or topography of land including the removal, destruction or lopping of trees and the removal of vegetation or topsoil.

That is an inclusive and not an exclusive definition. Mr Morris submitted that the purchase of land was not "works" within either the natural or the extended meaning of that word.

100. Mr Morris submitted further that in any case the introductory words of sub-section 62(6) prohibited the inclusion of the condition in the permit, as it did not fall within either of the exceptions to that prohibition. It was not in issue that, as the DCP was not an approved DCP, the condition did not come within paragraph (6)(a). As to paragraph (6)(b), the condition was not "a condition requiring services or facilities to be provided", but a condition requiring the payment of money, which was to be expended, together with other moneys similarly contributed, in the provision of services and facilities.

103. He pointed out that sub-paragraph 62(2)(h)(ii) as previously in force had not been subject to the qualification which appears in sub-paragraph 62(5)(b)(ii) that payment be shared between the applicant and one of a specified group of public authorities. Under sub-paragraph 62(2)(h)(ii) it would have been possible to impose a condition providing for the payment to be shared between the applicant and one or more other subdividers, but that is not so under sub-paragraph 62(5)(b)(ii). Further, paragraph (2)(h) used the disjunctive "or" between its sub-paragraphs, while paragraph (5)(b) uses the conjunctive "and". Finally, Mr Morris submitted, paragraph (2)(h) permitted a condition for the provision of "services or facilities" as well as "works", which is not the case with paragraph (5)(b). It was clear from all of these changes, he submitted, that paragraph (5)(b) was intended to have a much more confined operation than paragraph (2)(h) had had.

106. In support of his submission Mr Morris cited passages from the Second Reading Speech of the Planning and Environment (Development Contributions) Bill (Hansard, Legislative Assembly 4 May 1995 page 1240 and following). The Minister began by stating that "The broad purpose of the bill is to establish a new system for development contributions under [the Act]." He referred at some length to concerns which had been expressed about the current system, and to the work of the reference group which had been established to consider a new approach. At 1242 he said:

The provisions limit levies being obtained outside the development contributions framework to those of a minor nature directly related to the site in question, such as the crossovers outside a service station.

A development contributions plan will be required in all cases except in respect of works directly related to sites for which payment is not shared with other private landowners. Conditions can be included for works, but not for services and facilities.

Conditions to obtain contributions towards services and facilities may be imposed only in accordance with an approved development contributions plan.

112. Section 35 of the Interpretation of Legislation Act 1984 provides:

In the interpretation of a provision of an Act or subordinate instrument--

(a) a construction that would promote the purpose or object underlying the Act or subordinate instrument (whether or not that purpose or object is expressly stated in the Act or subordinate instrument) shall be preferred to a construction that would not promote that purpose or object; and

(b) 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;

(iii) explanatory memoranda or other documents laid before or otherwise presented to any House of the Parliament; and

(iv) reports of Royal Commissions, Parliamentary Committees, Law Reform Commissioners and Commissions, Boards of Inquiry or other similar bodies.

123. I am satisfied that it is appropriate, in the circumstances of this case, to refer to the Second Reading Speech "by way of confirming . . . that the interpretation otherwise determined upon from the words used does in fact accord with what was the apparent purpose or object as it emerged . . . from the debates in Parliament." (R v Boucher [1995] VicRp 7; (1995) 1 VR 110 at 123).

126. Mr Morris also referred to the Guidelines for Development Contributions published by the Department of Planning and Development in December 1995. However, I would be reluctant to refer to any such document as an indication of the intention of Parliament. Indeed, there is an express disclaimer at page (ii) of the document which concludes "In cases where there is any doubt about the interpretation of . . . the Act, competent legal advice should be sought."

130. Mr Wright's principal submission was that the opening words of sub-section 62(2), namely "The responsible authority may include any other condition that it thinks fit" were inclusive and authorised the making of conditions other than those specified in the balance of the sub-section, provided that the other conditions were able to be imposed under the general principles of administrative law. The significance of the several kinds of conditions specified in the separate paragraphs of sub-section 62(2) was, he submitted, that conditions of those kinds were given specific statutory validity regardless of those general principles. Those principles were exemplified in Cardwell Shire Council v King Ranch Australia Pty Ltd [1984] HCA 39; (1984) 53 ALR 632 where Gibbs J, with whom Mason, Wilson, Brennan and Dawson JJ agreed, said at 635:

The statutory test that has to be applied by a local authority in deciding whether to attach conditions to its approval in a case such as the present is whether the conditions are reasonably required by the subdivision. This means that the local authority, in deciding whether a condition is reasonably required by the subdivision, is entitled to take into account the fact of the subdivision and the changes that the subdivision is likely to produce - for example, in a case such as the present, the increased use of the road and of the bridge - and to impose such conditions as appear to be reasonably required in those circumstances.

134. He submitted that sub-section 62(2) was beneficial legislation and should be given as wide an interpretation as the words of the section permitted. He cited no authority for that proposition, which I would find difficult to accept. I am supported in that view by Pearce & Geddes, Statutory Interpretation in Australia. At pages 222-4 of the fourth edition of that work, the learned authors, after stating, "the view that there are statutes which can be classified as remedial and therefore interpreted liberally has found support in the following cases", list a number of cases, classified under the areas of legislation with which they deal. They summarise those areas of legislation in the following terms at 222:

A remedial or beneficial provision is one that gives some benefit to a person and thereby remedies some injustice. The most commonly cited examples are social welfare and pensions legislation, workers' compensation Acts, safety legislation and so on. However, any legislation that is taken to make a change in existing law or adopt new provisions that are advantageous to an individual or to the public is likely to be regarded as falling within the description of remedial or beneficial . . .

Sub-section 62(2) does not appear to me to be capable of falling within that description.

139. Mr Wright also submitted, if I understood him correctly, that the condition could be authorised by sub-section 62(5). However, it is not in issue that paragraph (a) of that subsection does not authorise the condition (see paragraph 12 above) and he did not respond to the detailed submissions of Mr Morris as to the effect of paragraph (b).

142. As to the general opening words of sub-section 62(2), Mr Morris submitted that to adopt the interpretation put forward by Mr Wright would be to negate the careful drafting and nice distinctions appearing in sub-sections 62(5) and (6). I am satisfied, on the authority of the Second Reading Speech, that the purpose of the Development Contributions Act was to establish a new system for the collection of moneys to fund relevant infrastructure, and that the new system had been prepared after lengthy and elaborate consideration and consultation. That being so, I would find it to be in the highest degree improbable that Parliament would have intended, by retaining those general words, to authorise a condition on a permit providing for the collection of moneys to that end by means other than the machinery carefully and precisely established by those two sub-sections.

146. Having considered the matter, I accept the submissions of Mr Morris and accordingly, find that the imposition of the condition is not authorised by section 62. The next question for consideration is the effect of that finding. Mr Morris submitted that, should I reach that conclusion, I should simply vary the order of the Tribunal by the deletion of condition 17.

149. Mr Wright submitted that if the condition was found to be invalid, then the original condition 17 to which the permit was subject, set out in paragraph 2 above ("the original condition"), either must or should revive. That condition, he submitted, was authorised by the opening words of sub-section 62(2) and was not prohibited by sub-section 62(6) because it satisfied the exception in paragraph (6)(b). However, I have already found that the opening words of sub-section 62(2) cannot, given the existence of sub-sections 62(5) and (6), justify the making of a condition providing for contributions by a subdivider to infrastructure of the kind in question, and accordingly the original condition is also invalid.

152. Mr Wright's next submission was that, should I reach that conclusion, the condition was not severable from the balance of the permit, and accordingly, the whole permit must fall with the condition.

155. He cited the following lengthy passage from the judgment of Stephen J in Spurling v Development Underwriting [1973] VicRp 1; [1973] VR 1 at 4-5:

Mr. Campton, in supporting the view that if the condition was in fact beyond the power of the Tribunal it was severable, leaving the rest of the determination unaffected, relied upon the recent decision of the House of Lords in Kent County Council v Kingsway Investments (Kent) Ltd., [1971] AC 72; [1970] 1 All ER 70. I consider that that decision is authority for the severability of the condition. The condition is concerned entirely with the vesting of title to the land in Development and is unrelated to any considerations of proposed land use or other planning considerations, all of which were, as the reasons of the Tribunal disclose, determined by it in favour of Development. In the Kent County Council Case their Lordships were in substantial agreement as to the general nature of the test of severability of conditions in planning approvals in the United Kingdom and what their Lordships said is directly relevant to Victorian legislation, being concerned with broad matters of principle and not turning upon any particular provisions of the United Kingdom town planning legislation.

Lord Reid said, at (AC) p. 90: "Suppose that a planning authority purports to impose a condition which has nothing whatever to do with planning considerations but is only calculated to achieve some ulterior object thought to be in the public interest. Clearly, in my view, the condition should be severed and the permission should stand. But suppose, on the other hand, that a condition, though invalid because ultra vires or unreasonable, limits the manner in which the land can be developed, then the condition would not be severable, for if it were simply struck out the result would be that the owner could do things on his land for which he never in fact obtained permission, and that would be contrary to the intention of the statute."

Lord Morris, with whom Lord Guest and Lord Donovan agreed, said at (AC) p. 102: "There might be cases where permission is granted and where some conditions, perhaps unimportant or perhaps incidental, are merely superimposed. In such cases if the conditions are held to be void the permission might be held to endure just as a tree might survive with one or two of its branches pruned or lopped off. It will be otherwise if some condition is seen to be a part, so to speak, of the structure of the permission so that if the condition is hewn away the permission falls away with it." His Lordship went on to refer to the distinction between conditions "fundamental to the whole of the planning permission", in which case the planning permission fails if the conditions are ultra vires, and other cases where when the conditions are not of this character "it would be difficult to justify saying that the whole permission failed".

Lord Upjohn, at (AC) p. 113 adopted as a test of severability whether or not the invalid condition "went to the root of the planning permission itself" or, on the contrary, was "purely collateral and could be altered without affecting the actual grant of the permission." He concluded (at AC p. 114) that in the instant case a particular condition could be severed "without doing any violence to the language that remains and without affecting in any way the substance of the grant of permission itself so that the grants of permission were valid, the respective conditions...were invalid but the original grants of permission remain valid and effectual...."

Applying the foregoing to the present situation, I think, it is clear that the condition precedent to issue which the Tribunal has imposed and which is not, in my view, within power, is one that can readily be severed. Indeed I think that this is a quite clear case; the condition is one which in a sense did, as Mr. Gifford contended, no more than state what was, in any event, the position in fact, namely, that the permission could not be given effect to until such time as the Governor in Council approved of the sale of the land by the City of Essendon. It follows, therefore, that the severance of the condition cannot affect in any way the operation of the determination of the Tribunal and this is, therefore, a case where severance will not alter the substantial intended effect of the Tribunal's determination.

163. Mr Wright submitted that, in terms of the extracts there cited from Kent County Council and the finding of Stephen J, both the original condition and the condition could be said to be, "part . . . of the structure of the permission", "fundamental to the whole of the planning permission", or such that it "went to the root of the planning permission itself". It could not "readily be severed" and severance would "alter the substantial intended effect of the Tribunal's determination", he submitted.

166. The issue of the severability of the condition was examined at some length by both counsel, with reference to Spurling and other authorities and to the power conferred on the Tribunal by paragraph 85(1)(g) of the Act. As a result I have formed the view that the material before me does not enable me to reach any conclusion as to that issue. A decision that the condition is not severable, and that the permit falls with the condition, would obviously have a significant affect on the future of subdivision in the Shire of Melton until such time as the DCP is approved by incorporation in the planning scheme. The determination of that issue involves both matters of evidence and matters of planning expertise and I need only refer to the well-known passage at page 11 of Spurling where Stephen J referred to "areas in which members of the Tribunal have special expertise and experience which the legislation plainly intends them to employ".

169. Accordingly, I consider it appropriate that I order that the order of the Tribunal be set aside and the matter remitted to the Tribunal to be heard and decided again by the same member who made the original order, with the hearing of further evidence so far as the Tribunal considers it appropriate. Counsel may wish to make submissions as to costs.