1. The decision of the responsible authority is varied. A permit is granted and directed to be issued under the provisions of section 85(1)(b) of the Planning and Environment Act 1987 for the land at 66 Bay Street, Brighton.

2. The permit will allow the subdivision of land in accordance with endorsed plans.

3. A permit is granted subject to the conditions contained in the notice of decision to grant a Permit No. 2000/5616 issued by the Responsible Authority on 21 July 2000 modified as follows:

"This condition may be waived by the Responsible Authority where satisfactory progress on the construction of development can be demonstrated".

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For the Applicant for Review: Mr How Ng of H & G Town Planning Pty Ltd appeared for Mr Bernard Dragicevic.

For the Responsible Authority: Ms Jennifer Bowdern appeared for Bayside City Council.

1. This was an application under section 80 of the Planning and Environment Act 1987 for review of conditions in a decision to grant a permit (Application No 2000/5616) for the land at 66 Bay Street, Brighton to subdivide the land, which comprises four certificates of title, in accordance with attached plans, which were subsequently endorsed.

2. Irregularly shaped block with a 40.18 metre frontage to Bay Street, 54.70 metre frontage to Barkly Street, sideages of 53.21 metres and 17 metres respectively and a total area of 1429 square metres.

3. Certificate of Title Volume 10010 Folio 620, 621, 622, 623.

4. It is proposed to subdivide land at 66-68 Bay Street, Brighton into eight lots for eight two-storey dwellings (which comprise 7 x 3 bedroom dwellings and 1 x 2 bedroom dwelling). These eight double storey dwellings were approved pursuant to planning permit No 99/4565 dated 12 July 1999. The land, although comprised in four certificates of title, was known as two addresses, namely 66 and 68 Bay Street, Brighton. This land comprised two dwellings, one commercial premises used as an office and one commercial premises used as a car window tinting factory.

5. These eight dwellings for which a planning permit was obtained, are presently under construction and the basement car park and part of the ground floor have been built to date.

6. The subject land is zoned Residential 1 under the Bayside Planning Scheme, in which a permit is required both for the development of more than one dwelling on a lot and for subdivision. Clause 52.01 reads:

A person who proposes to subdivide land must make a contribution to the council for public open space in an amount specified in the schedule to this clause (being a percentage of the land intended to be used for residential, industrial or commercial purposes, or a percentage of the site value of such land, or a combination of both). If no amount is specified, a contribution for public open space may still be required under Section 18 of the Subdivision Act 1988.

The following classes of subdivision are exempt from a public open space requirement, in accordance with Section 18(8)(a) of the Subdivision Act 1988:

Class 1: The subdivision of a residential building provided each lot contains part of the building. The building must have been constructed before 30 October 1989 or a planning permit must have been issued for the building before that date.

Class 2: The subdivision of a commercial or industrial building provided each lot contains part of the building.

If no amount is specified, a contribution for public open space may still be required under Section 18 of the Subdivision Act 1988.

7. The Subdivision Act 1988, Section 18 reads:

(1) If a requirement for `Public Open Space' is not specified in the planning scheme, a Council, acting as a responsible authority or a referral authority under the Planning and Environment Act 1987 may require the applicant who proposes to create any additional lots by a plan of subdivision to:

(a) Set aside on the plan, for `Public Open Space', in a location satisfactory to the Council, a percentage of all the land in the subdivision intended to be used for residential, industrial or commercial purposes, being a percentage set by the Council not exceeding 5 per cent; or

(b) Pay or agree to pay to the Council a percentage of the site value of all the land in the subdivision intended to be used for residential, industrial or commercial purposes being a percentage set by the Council not exceeding 5%; or

(c) Do a combination of (a) and (b) so that the total of the percentages required under (a) and (b) does not exceed 5% of the site value of all the land in the subdivision.

8. Therefore, the contribution can be in the form of land or by financial contribution. Given that no land on the site has been set aside for `Public Open Space', Council has required a monetary contribution.

9. Pursuant to section 18(1A):

The Council may only make a public open space requirement if it considers that, as a result of the subdivision, there will be a need for more open space, having regard to -

(a) the existing and proposed use or development of the land;

(b) any likelihood that existing open space will be more intensively used after than before the subdivision;

(c) any existing or likely population density in the area of the subdivision and the effect of the subdivision on this;

(d) whether there are existing places of public resort or recreation in the neighbourhood of the subdivision, and the adequacy of these;

(e) how much of the land in the subdivision is likely to be used for places of resort and recreation for lot owners;

(f) any policies of the Council concerning the provision of places of public resort and recreation.

10. Accordingly the Council approved the subdivision in subdivision permit No 2000/5616 on the basis of a number of conditions. The Permit Applicant is appealing two of those conditions, Conditions 5 and 6 which read:

5. The Applicant or owner must pay to the Council a sum of $31,500 equivalent to three % of the site value of all land in the subdivision. This payment must be made before a statement of compliance is issued and may be varied under Section 19 of the Subdivision Act 1988.

6. The Applicant must enter into an agreement under Section 173 of the Planning and Environment Act 1987 with the Responsible Authority to the effect that the development of Lots 1 to 8 indicated on the plan of subdivision shall be in accordance with the approved plans, forming part of Planning Permit No. 99/4565 or any amendment to the plans approved by the Responsible Authority. The agreement shall be prepared and executed at the owner's cost.

11. The principal issues for consideration in respect of this application for review fall into three categories, one of which can be disposed of promptly, as the parties have come to a consent position. I will deal with the latter first. This involved the requirement for a Section 173 Agreement to reflect the building envelope boundaries created by the planning permit. The Responsible Authority and the Permit Applicant have now agreed to insert the following sentence after Condition 6:

This requirement may be waived by the Responsible Authority where satisfactory progress on construction of the development can be demonstrated.

13. The other two issues are the power of the Responsible Authority to require a public open space contribution under the circumstances of this case and the quantum of contribution required.

14. Mr How Ng alleges that the Council has no power to impose Condition 5 as it is:

(a) statute-barred by s.18(1A) of the Subdivision Act 1988;

(b) not authorised by s.62(5) of the Planning and Environment Act 1987;

(c) in disagreement with the tests enunciated in the Eddie Barron's case;

15. I will deal with the last three arguments first. Section 62(5) of the Planning and Environment Act 1987 and the Eddie Barron case both deal with development contributions. This case concerns a public open space contribution which is a specific requirement of the planning scheme and Subdivision Act 1988 and is a different head of monetary contribution and a different creature to these other development contributions. The public open space requirement is specifically envisaged by and authorised by the Subdivision Act 1988 and the planning scheme, and for that reason is not an unauthorised municipal tax.

16. Turning to the allegation of statute-barred, I quote Mr Ng:

It is submitted that, in accordance with the plain language rule of statutory interpretation, the subdivision itself would not attract any additional need for public open space as the use of the land for 8 dwellings remains unchanged. Consequently, the Council may not impose a public open space contribution pursuant to s.18(1A) of the Subdivision Act 1988.

As a matter of fact, if there were any increased demand for public open space, it would be when the approval was granted for the erection of the 8 dwellings. However, this was not imposed pursuant to s.62(5) of the Planning and Environment Act 1987 in permit No. 99/4565. It is therefore the submission of the applicant for review that, as a matter of law, the Council is statute-barred from requiring the public open space contribution unless it could demonstrate that the subdivision per se would increase the demand for public open space while acknowledging that the 8 dwellings when constructed and so used without the subdivision would not attract the contribution burden although the same occupants would have the same so-called need for public open space.

S.18(1A) is clearly intended for subdivision of land without buildings or approval for buildings.

The proper course of action the Council should have taken is to have prepared `an approved development contribution plan' and imposed the open space requirement therefrom pursuant to s.62(5) of the Planning and Environment Act 1987. This it has not exercised and the opportunity is lost.

17. Pursuant to section 18(1)(b), Mr Ng argues:

(i) the Council has no plan to buy any land for public open space to benefit the area where the contribution is to be levied. Ms Bowdern for the Responsible Authority concedes this.

(ii) there is no equity, accountability nor nexus in the Council's imposition pursuant to the tests enunciated in Eddie Barron Constructions Pty Ltd v Shire of Pakenham, 6 AATR 10;

(iii) there would be minimal perceptible increase in the number of occupants of the land as possibly six people occupied the former office, the previous two larger houses and industry generated additional occupants, and only 1.8 people per dwelling is the ABS survey of occupants of the smaller dwellings.

That it cannot be argued that provision of open space in this development is suitable for active recreation purposes for all lot owners even though the open space required for each of the eight double storey dwellings has a minimum of 40 square metres including ground level areas and balconies which complies with the requirements of the Good Design Guide.

19. Mr Ng could not deny the truth of the distinction between active and passive recreation space, of which only the latter was catered for in the development.

20. Further, Council argued that the following recreation areas located between 500 metres to 1.6 kilometres from the subject land obtained the benefit of the open space contributions which are:

* Brighton Beach Foreshore located approximately 803 metres to the east of the subject site.

* Wilson Reserve located approximately 500 metres south of the subject site.

* Landcox Park located 1.6 kilometres to the west of the subject site.

* Elsternwick Park located 1.36 kilometres to the north east of the subject site.

21. The manner in which Council exercised its discretion to require a 3% public open space contribution was that it applied a percentage in accordance with a sliding scale for these contributions which was previously contained in Vic Code 2 at page 33, performance measure 3 (notwithstanding that this has now been superseded):

22. This scale is used by Council as a matter of policy.

23. Council argues that given that no communal open spaces provided on the land and the provision of private open space in the development is unsuitable for active recreation purposes, a further reduction or waiver of the open space contribution is not justifiable.

24. The problem with using Council's sliding scale policy is that depending on which way you calculate the number of residential or commercial uses previously on the site and those now provided on the site and depending on whether you assess the site previously as one whole rather than as two different parcels of land, ie. 66 and 68 Bay Street, Brighton, the result could vary anywhere between 0% public open space contribution and 3% public open space contribution.

25. Mr Ng's argument assumes that the subdivision sought is just "lines on a page", rather than actual dividing of land into smaller parcels. His argument is based on the proposition that the subdivision only occurs when the lines on the page are created and sought to be confirmed, not when the buildings along those same lines are constructed - so that if the buildings are first constructed (and the higher densities generated at that point in time), that does not amount to the subdivision of land. And when, subsequently, those building lines and divisions are sought to be confirmed as lines on a page, then it is too late for a subdivision contribution to be lawfully required.

26. This argument is too narrow. The subdivision is not just lines on a page but the totality of the development, which encompasses the original planning permit for development along those particular lines and boundaries and this subsequent permit for confirmation of those lines and divisions into separate lots for the purpose of separate sale or alienation of each lot created by those lines on the page.

27. I derive this from the definition of `subdivision' in s.3 of the Act which reads:

Subdivision means the division of land into two or more parts which can be disposed of separately.

28. In s.3 as well, land includes buildings and airspace.

29. In a green-acres subdivision situation, the creation of lines on a plan dividing the land may in some instances be enough to dispose of the parts separately. But in practice this is usually never enough in itself. Conditions attached to the subdivision permits usually require the creation of sewerage, power, water, drainage, road and access connections. Unless these conditions are fulfilled, the subdivision is unlawful, being in breach of its permission. Thus the actual subdivision of the land involves works as well as lines on a page.

30. In a building development situation, where what is sought is the disposal, not of green-acres parcels but of apartments, units, townhouses, houses or the like, the creation of lines on a plan dividing the land is never enough to dispose of the parts separately. One requires, in addition to the creation of sewerage, power, water, drainage, road and access connections, that that apartment, house etc actually be constructed. And in the case of the division of an existing building into separately disposable parts, one requires the carrying out of works to create those parts, as well as the creation of sewerage, power, water, drainage, road and access connections. Thus when subdivision is defined as the division of land into two or more parts it encompasses not just division by the lines on a plan but division including all the means necessarily and inherently involved in achieving the aim of being able to dispose of each part separately.

31. In the facts of this case, the subdivision permit and the plans endorsed thereto, all of which create the separately disposable parcels of land, are the result of a combination of obtaining planning permission in the first place for the division of the land into a site containing eight townhouses, the outlines of which form the lines on the plan now sought to be confirmed by a permit for the subdivision. The subdivision is the totality of the permissions and thus cannot be confined to this subsequent subdivision permit only.

32. Looking at the subdivision as a whole, rather than just lines on a page, it is clear that there will be the following consequences:

(i) an increased number of dwellings built(s.18(1A)(a));

(ii) an increased number of persons inhabiting the increased number of dwellings built (s.18(1A)(c));

(iii) diminished open space available for active recreation space, adding to pressure on existing open space, which is likely to be more intensively used than before (s.18(1A)(b));

(iv) a need to ensure the existing places of public resort are improved to adequately cope with the increased use likely to be made of them (s.18(1A)(d));

(v) diminished land in the subdivision itself available for active recreation space for the increased numbers. The permit applicant concedes that the space available is only suitable for passive recreation such as sitting outside (s.18(1A)(e));

33. I am content to rely on Member Monk's analysis in Jolin Nominees Pty Ltd v Yarra City Council, 2000/022808, 4 September 2000, unreported:

I also have reservations about comparisons between a factory worker's lunchtime demands for open space compared to the longer term and more varied demand typical of residential occupation. A worker may be content with a seat in the sun in Langdon Reserve whereas, as noted by the Tribunal in Peter Herbert and Associates Pty Ltd v Stonnington City Council (1996/19415) 17 AATR 27 "the degree of utilisation of open space facilities is subject to many variables including such imponderables as personal preferences. People with young families for example, may well walk some distance to an open space area with play facilities while dog lovers may go out of their way to find a quiet open space area which has no improvements at all."

Adopting Mr Montebello's average household size for Yarra of 2.02 per persons per dwelling, 26.4 persons could be expected to reside at this development compared to the 26 estimated by Mr Ng to have been employed at the clothing factory. Whilst this might not constitute a significant increase in the number of persons generated by the site in a numerical sense I am of the opinion that over time a greater need for open space is generated. Associated with this, I accept there is a greater expectation for open space facilities by resident rate payers than by factory workers. I accept also that this change is not a trifling one.

It was Mr Montebello's submission that the maximum contribution capable of being required under the Subdivision Act should apply here. He justified this by referring to the relatively low provision of public open space in Yarra and in Fitzroy North in particular - though he did concede that South Fitzroy was even less generously endowed with open space on a per capita basis. .............

Mr Montebello conceded that purchase of additional open space was not - at this stage in any event - being anticipated by the Council. Rather, and this was supported by the budget material tendered by him, reliance was placed on capital improvement of existing open space areas to enable it to be more intensely used.

In Peter Herbert's case the Tribunal was also faced with the situation where purchase of further land was not contemplated. The Tribunal went on to make the following observation:

"This is a significant concession. The purchase of land in the Toorak area is very expensive and the size of an open space contribution is a function of the value of the land. However, it is no more expensive to carry out capital works within the Toorak area than it would be to carry out the same works in the poorest suburb in Melbourne. This is an aspect of the Council's policy which the Tribunal believes cannot withstand rigorous scrutiny."

I find the same can be said in Fitzroy. If the Council is not contemplating purchase of land - and it is the need to purchase which can be said to provide the basis for a contribution founded on land value - then this should be taken into account when determining what might be a reasonable contribution. As noted in Peter Herbert it is no more expensive to carry out capital works in one area than another. For the City of Yarra to therefore argue the necessity for the highest possible contribution it should at the very least be contemplating some degree of land purchase. There was no evidence of this here.

On the other hand I accept the validity of Mr Montebello's argument that the adequacy of existing open space within Yarra is an issue of importance to the local community and one which this Council must, relative to more generously endowed municipal districts, be more clever about in terms of ensuring that spaces are developed as efficiently and creatively as possible. The budget material provided by Mr Montebello demonstrate that there is an ongoing commitment to capital improvement of existing open space - including setting aside of funds to further develop the Council's open space strategy. Despite Mr Ng's protestations I could not be persuaded that the tests enunciated in Eddie Baron Constructions Pty Ltd v Shire of Pakenham 6 AATR 10 would not be met in this instance. I have accepted that a greater need for open space results from this development. I believe also that there is a clear nexus between this re-development and the requirement for a cash contribution towards open space improvement. There was no evidence to suggest that this Council manages its open space contribution fund in an inequitable way or that it is not accountable for its expenditure. There is also evidence in the budget that upcoming expenditure with direct benefit for this part of Yarra is imminent. There was evidence also that future expenditure on capital improvements to Langdon Reserve is likely.

To conclude I accept Mr Montebello's submission that for a municipality such as Yarra, which is intensely developed and less endowed than most with public open space, it is reasonable to select from the higher end of the 0 to 5% contribution scale. I have found that the change in demand for open space as a result of this subdivision and redevelopment will not be trivial, on the other hand it is not a change that goes from no existing demand to total new demand. It is relevant to have regard to the prior industrial use demands of this particular case. It is also relevant to have regard to the fact that no additional purchase of open space is contemplated at the present time. Rather, capital improvements are all that the contribution can be said to facilitate. I find in this instance that it is appropriate to require a contribution at the higher end of the 0 to 5% scale but not at the top of the scale. Accordingly, having regard to the material presented to me I think it appropriate in this instance to require a 3% contribution.

34. The same considerations and principles as enumerated in Jolin Nominees Pty Ltd are relevant here:

(ii) the substitution of lunchtime workers for residents;

(iii) a greater expectation for open space facilities by resident rate payers than by workers;

(iv) capital improvements to existing open space is contemplated here, rather than the purchase of more open space;

(v) the change in demand for open space will not be trivial;

35. These considerations support the contribution of funds on a scale mid way between the lowest and highest ends. Council's 3% requirement, amounting to $31,000.00 is a reasonable contribution. Accordingly the Tribunal will allow the application for review in part and direct that a permit issue, with condition 5 confirmed but condition 6 varied by consent.

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