Frevcourt Pty Ltd & Ors v Wingecarribee Shire Council

Legal issues identified 5. The overarching issue relates to the obligation of the Council to collect and spend money under s 94 of the Environmental Planning and Assessment Act 1979 (the EP&A Act). There were important amendments to the EP&A Act in 1993 so that the scheme of the Act before and after those amendments must be considered as the development consents were granted before and after these amendments. There are three bases for the Applicants' claims as follows: (i) the Council has not undertaken all the work for which s 94 contributions were collected and the Applicants are entitled to recover their contributions (abandonment), (ii) each Applicant paid s 94 contributions at an incorrect, higher rate than it should have and are entitled to recover the amount overpaid (overpayment), and (iii) damages are claimed as an alternative to the part of the claim based on overpayment.

6. A summary of the legal issues to be considered in relation to these three areas follows.

7. The parties proposed a number of specific questions to be answered by the Court, not all of which have ultimately needed to be answered. The questions which I will answer can be broadly categorised as follows:

Abandonment (i) What was the basis on which the Council could levy and spend s 94 contributions before the requirement for contributions plans was implemented on 1 July 1993? (Questions 1, 2, 3 and 4) (ii) What was the basis on which the Council could levy and spend s 94 contributions after the requirements for contributions plans was implemented on 1 July 1993? (Question 5) (iii) What is the nature of the Council's obligations in holding s 94 contributions? (Questions 2, 6 and 7) (iv) Does the Court have jurisdiction to give refunds of s 94 contributions? (Question 8) (v) In order to get a refund, must a contributor be able to show his/her/its money is unspent by the Council? (Question 9)

Overpayment (i) Is the Applicants' claim for overpayment maintainable at all? (ii) Does the Court have jurisdiction to award damages for breach of the provisions of s 94 of the EP&A Act in relation to overpayments? Relevant legislation Section 94 EP&A Act as it applied 1988 (year first consent granted) to 1 July 1993 8. Section 94(1) of the EP&A Act stated in 1988 to 13 February 1992: Subject to subsection (2), where a consent authority is satisfied that a development, the subject of a development application, will or is likely to require the provision of or increase the demand for public amenities and public services within the area, the consent authority may grant consent to that application subject to a condition requiring - … (b) the payment of a monetary contribution …

9. The Environmental Planning and Assessment (Contributions Plans) Amendment Act 1991, which commenced on 14 February 1992, amended s 94(3) of the EP&A Act. The words "in trust" were removed and the following words "(and any additional amount earned from its investment)" were inserted instead. The section was otherwise unchanged.

10. Section 94(2) provided: A condition referred to in subsection (1) shall be imposed only - … (b) to require a reasonable dedication or contribution for the provision, extension or augmentation of the public amenities and public services mentioned in that subsection.

11. Importantly for this case, s 94(3) provided The consent authority shall hold any monetary contribution paid in accordance with a condition referred to in subsection (1) in trust [emphasis added] for the purpose for which the payment was required and apply the money towards providing public amenities or public services or both within a reasonable time and in such a manner as will meet the increased demand for those amenities or services or both.

12. The Applicants submitted that the Local Government Act 1919 s 333 and s 111 were relevant to the operation of the statutory trust under which contributions paid pursuant to s 94 of the EP&A Act were held, but I do not agree.

Section 94 of the EP&A Act as it applied in 1993 - 1998 13. Sections 94(7) and (8) were inserted as follows: (7) When granting consent to a development application made on or after the first anniversary of the date of assent to the Environmental Planning and Assessment (Contributions Plans) Amendment Act 1991 or such earlier day as may be fixed by proclamation for the purposes of this subsection, a council may impose a condition referred to in this section only if it is of a kind allowed by, and is determined in accordance with, a contributions plan approved under section 94AB. (8) A contribution of a kind allowed by a contributions plan may be disallowed or amended by the Court on appeal because it is unreasonable, even if it was determined in accordance with the plan. 14. The requirement to have a contributions plan in place under s 94(7) was ultimately extended so as to be required from 1 July 1993. While s 94(3) became s 94(6) on 1 July 1998 the wording of that section has continued unaltered since 1992.

The Regulations 15. Amendments made to the Environmental Planning and Assessment Regulation 1980 (EP&A Regulation 1980), which commenced on 14 February 1992, inserted clauses concerning the making of contributions plans and record keeping obligations of councils in relation to s 94 contribution plan monies. Part 4A - Contribution Plans, required that a contributions plan must be drawn up and contain specific details.

16. Clause 41F provided: A contributions plan must include the following: (ii) the purpose of the plan; (iii) particulars identifying the land to which the plan applies; (iv) details establishing the nexus between the expected types of development in the area and the demand for additional public amenities and services to meet that development; (v) the formulas to be used for determining the contributions required for different categories of public amenities and services; (vi) contribution rates for different types of development specified in a schedule to the plan; (vii) the council's policy concerning the timing of the payment of monetary contributions and the conditions subject to which deferred or periodic payment may be allowed; (viii) a works schedule of the specific public amenities and services proposed to be provided by the council, together with an estimate of their cost and staging.
17. Clause 41L(1) provided: A council that receives monetary contributions under section 94(1) or (2A) of the Act in relation to a particular contributions plan must maintain accounting records that allow those contributions (together with any additional amounts earned from their investment) to be distinguished from all other money held by the council.

18. Clause 41L(2) provided: The accounting records maintained in relation to a contributions plan must be kept so as to indicate: (a) the various categories of public amenities or services for which expenditure is authorised by the plan; and (b) the monetary contributions received in accordance with the plan, by reference to the various categories of public amenities or services for which they have been received; and (c) the amounts spent in accordance with the plan, by reference to the various categories of public amenities or services for which they have been spent.

19. The EP&A Regulation 1980 was later amended by the introduction of the Environmental Planning and Assessment Regulation 1994 (EP&A Regulation 1994) (and amendments to those Regulations in 1998) and the Environmental Planning and Assessment Regulation 2000 (EP&A Regulation 2000), but these provisions have continued essentially in this form.

Planning and contribution instruments 20. The relevant planning instruments and s 94 contributions plans, being the East Bowral Development Control Plan No 8 (the 1987 DCP), the Developer Contributions Plan - Roads and Traffic Management Facilities effective 1 July 1993 (the 1993 Contributions Plan) and the Developer Contributions Planning for East Bowral effective 4 September 1996 (the 1996 Contributions Plan), relied on by the Applicants are shown in the table below. The total amount of roadworks planned for the East Bowral area in the relevant instruments and total amount of s 94 contributions required for that work is also shown.

Instrument Total of East Bowral Roadworks Section 94 contributions required for work 1987 DCP $4,714,488 $2,276,488* (*incorrect figure should be $182,000 less) 1993 Contributions Plan $4,606,375 $3,120,513 1996 Contributions Plan $3,050,000 $2,673,500

21. The 1996 Contributions Plan states explicitly that several roadworks are being reduced or not proceeded with. This is clear from the figures in the above table where the total cost of works for East Bowral is reduced by $1,556,375 between the 1993 and 1996 Contributions Plans.

Summary of the development consents issued to the Applicants 22. The following table sets out the eight relevant development consents and conditions relating to roads, for the consents issued before and after 1 July 1993, which the Applicants' case relied on. I note that a development consent granted to Frevcourt, No 160/89, was included in the Applicants' submissions. As no contributions were paid pursuant to this consent I have not included it as it is irrelevant. Further, a Frevcourt development consent no 448/92 is referred to in the Council's submissions only. As Frevcourt did not rely on that consent in argument I have not included it in this table either.

Applicant Development consent no Date granted Conditions of consent Before 1 July 1993 Payment to Council of contributions levied in respect of Section 94 of the EP&A Act subject of this development consent to be made prior to the endorsement and release of the final plan of subdivision, or as elsewhere specified. … This clause has been applied in accordance with Council's adopted policy.

Frevcourt 282/92 10/07/92 The contribution by the applicant of monies for the following designated purposes prior to the release of the linen plan of subdivision. The exact amount of contribution will be calculated at the rate applicable at the time of payment. The current contribution rate is noted below. … The payment of a monetary contribution towards the improvement of local roads to which the subdivision has its frontage, and having the benefit of local access thereto, it being noted that the current contribution is $114,240 [amount amended 8 Dec 1992].

Payment to Council of contributions levied in respect of Section 94 of the EP&A Act subject of this development consent to be made prior to the endorsement and release of the final plan of subdivision, or as elsewhere specified … This clause has been applied in accordance with Council's adopted policy.

Frevcourt 511/92 25/05/93 The contribution of the applicant of moneys for the following designated purposes prior to the release of the linen plan of subdivision. The exact amount of contribution will be calculated at the rate applicable at the time of payment. The current contribution rate is noted below. … The payment of a monetary contribution towards the improvement of providing roads of local ["within the East Bowral precinct" added 18 August 1994], it being noted that the current contribution is $83,694 [amount amended 18 August 1994]. Payment to Council of contributions level in respect of Sec 94 of the EP&A Act subject of this development consent to be made prior to the endorsement and release of the final plan of subdivision, or as elsewhere specified. … This clause has been applied in accordance with Council's adopted policy.

Kettle* 483/88 19/09/88 The contribution by the applicant of monies for the following designated purposes prior to the release of the linen plan of subdivision. The exact amount of contribution will be calculated at the rate applicable at the time of release of the linen plan of subdivision. The current contribution rate is noted below. … The payment of a monetary contribution for the improvement of Old South Road to which the subdivision has its frontage, it being noted that the current contribution is $85,860. Payment to Council of contributions levied in respect of Sec 94 of the EP&A Act subject of this development consent to be made prior to the endorsement and release of the final plan of subdivision, or as elsewhere specified. … This clause has been applied in accordance with Council's adopted policy.

Rutar 689/89 14/11/89 The contribution by the applicant of monies for the following designated purposes prior to the release of the linen plan of subdivision. The exact amount of contribution will be calculated at the rate applicable at the time of release of the linen plan of subdivision. The current contribution rate is noted below. … The payment of a monetary contribution for the improvement of Old South Road to which the subdivision has its frontage, it being noted that the current contribution is $126,000. Post July 1993 Frevcourt 338/95 04/01/96 Payment to Council of contributions levied in respect of Section 94 of the EP&A Act subject of this development consent to be made prior to the endorsement and release of the final plan of subdivision, or as elsewhere specified … This clause has been applied in accordance with Council's adopted policy. 102/96 09/05/96 Rutar 640/95 07/02/96 The contribution by the applicant of moneys for the following designated purposes prior to the release of the linen plan of subdivision. The exact amount of contribution will be calculated at the rate applicable at the time of payment and will reflect the current contribution rates which are reviewed annually. The current contribution rate is noted below. … Kettle* modified 483/88 19/07/94 The payment of a monetary contribution towards the improvement of local roads to which the subdivision has its frontage, and having the benefit of local access thereto, it being noted that the current contribution is $… [338/95 amount amended 20 May 1996, 102/96 amount amended 4 June 1996]

• This consent originally for 53 lots was modified on 19 July 1994 so that 23 lots were created from 13 of the originally subdivided lots. Conditions in the same form as the post July 1993 consents were included in the modified consent. There is dispute between the parties as to the status of the original and "modified" consent. I have concluded the consent as originally granted (under which payment for 40 lots was made) should be included in the pre 1 July 1993 consent section. The "modified" consent is treated as a new consent granted after 1 July 1993 in relation to 23 lots. 23. The 1993 Contributions Plan was the relevant contributions plan in force when all the development consents after1 July 1993 were granted.

Legal issues - Abandonment Statutory position before 1 July 1993 Question 1 Prior to 1 July 1993, was a council in breach of the EP&A Act if it failed to hold or apply monies, collected in consequence of a valid condition of consent given prior to that date, for the purposes stipulated in a DCP containing a works schedule and a formula for fixing contributions? If so, what was the breach of which it was guilty?

Applicants' arguments 24. The Applicants argued that the Council by adopting a Development Control Plan in 1987 for contributions to be made for roadworks under s 94 created an obligation on the Council: (a) to prepare that Development Control Plan (DCP) under the EP&A Act and EP&A Regulation 1980 (b) to apply the DCP to any application for development that considered or required the contributions of monies under s 94. This obligation was said to arise because of the scheme of the EP&A Act and EP&A Regulation 1980 which provided for the making of a DCP.

Section 94(3) imposed on the Council an obligation to hold such monies collected in "trust" and only pay out those monies for the public amenities or public services identified in the DCP and to do so within a reasonable time. The mandatory obligation on a council in respect of the contributions made under s 94(3) as it applied before the 1993 amendments are as identified by Holland J in Levadetes v Hawkesbury Shire Council (1988) 67 LGRA 190 at 195: (i) to hold the money in trust for the purposes for which the payment was required; (ii) to apply the money towards providing the relevant public amenities or services (in the Applicants' submissions being those amenities identified in the plans required by the Department of Urban Affairs and Planning Guidelines or the 1987 DCP); (iii) to do so in a reasonable time; and (iv) to apply the monies in such a manner as will meet the increased demand for those public amenities or services.

The Applicants argue that there is a clear breach by the Council of requirements (ii) and (iii) in Levadetes because the Council does not intend to provide those "relevant public amenities" at all. These were specified in the 1987 DCP but many were abandoned in the 1993 and, particularly, the 1996 Contributions Plan.

The Applicants argue that the 1987 DCP defined the "purpose" for which the Council held the monies contributed under s 94 and contained lists of proposed works or expenditures relevant to the contributions collected under s 94(3). Accordingly, the Council was bound to apply the money to the works in the proposed list in the 1987 DCP and this was to be reflected in the development consents issued by the Council.

The Applicants dispute that it is only by reference to the development consent conditions imposed by the Council and the terms of s 94 that the obligation of the Council under s 94 is defined under the EP&A Act. The Applicants argue that there was a general practice that required s 94 monies to be applied in conformity with the guidelines provided by the Department of Urban Affairs and Planning. That criteria extended to the making of a plan for the provision of public amenities in instruments such as DCPs and instituting proper accounting procedures. (There were no regulations requiring accounting procedures for s 94 contributions until 1992).

Where a Council uses a DCP for the purposes of determining the amount which should be paid by way of contribution under s 94 and then charges those amounts exactly, the contents of that DCP become part of the obligation under which the monies are held on trust, that is to spend such contributions on those works set out in the DCP. This is the obligation that is created to comply with the s 94(3) obligation to "apply the money towards providing public amenities or public services or both".

The Applicants approach is that the 1987 DCP should be compared to the 1993 Contributions plan in order to make a decision as to whether a particular item of proposed expenditure has been "abandoned". Other works can be substituted but there is no objective test proposed by the Applicants to reach a decision as to whether substitution has occurred. If an item has been abandoned, the contributions paid should be assessed and the amount of each dollar paid which may be attributed to the abandoned item should be refunded.

Council's argument 31. Section 94 was amended in 1985 and the requirement that had previously existed for a Council to identify potential future community need resulting from a development in an environmental planning instrument was deleted. There was no requirement that a Council seeking to recoup costs under s 94 do so by a DCP or any other like mechanism as the Applicants submitted. Under s 90(1)(a)(iv) a council only had to consider a DCP, it was not bound as a matter of law to apply it.

32. For the four pre 1 July 1993 consents, none of the relevant conditions at par 22 above refer to the 1987 DCP. Each identifies the subject matter for which the contribution is sought. If there is a breach, it must be found in a general failure to comply with the strict terms of the duty and obligations fixed by the EP&A Act. The true question is whether the funds contributed by the Applicants pursuant to the pre-1993 consents were expended "towards providing public amenities or public services … in such a manner as will meet the increased demand …" and if so, whether the expenditure was "within a reasonable time".

33. The Council submitted that the validity of a condition requiring payment of a contribution was to be determined on the tests set out in s 94(1) (that a development would or would likely require provision of or increase the demand for public amenities and services). The only further additional requirement was that the condition impose an obligation that was reasonable. Once received, the obligation of the Council under s 94(3) was to hold money "in trust" for the purpose collected and spend it promptly on providing public services and amenities which met the increased demand. The money did not have to be spent in accordance with a pre-planned program.

Finding on Question 1 34. I accept the Council's submission that the 1987 DCP was not, under the EP&A Act as it applied between 1988 and 1 July 1993, the basis on which the s 94 contributions collected from the Applicants had to be collected and spent. Failure to comply with the 1987 DCP in this respect is not a breach of s 94. While I understand the Applicants submitted that it was the practice, encouraged by the Department of Urban Affairs and Planning (DUAP) (as it was then known), to include programs of works in DCPs and other plans, it was not a legal requirement under s 94 of the EP&A Act as it applied at that time. I further note that observations made by Pearlman J in Toadalla Co Pty Ltd v Dumaresq Shire Council (1992) 78 LGERA 261 are to the same effect where she stated at 269: Nothing in s 94(3) requires evidence of a plan or proposal for the application of the funds, so long as they are expended within a reasonable time. Toadalla concerned a development consent granted in 1988 and her Honour was considering the same statutory scheme as applies in this part of this case.

The Applicants' submissions relied heavily on the Council's responsibility as identified in Levadetes, set out at par 25. The difficulty of this approach for the Applicants' case is that the dictum in Levadetes, which I agree with and apply as being the general obligations of the Council under s 94, does not address the particular circumstances the Applicants are arguing, namely that the money must be expended on the works listed in the DCP. Reliance on Levadetes does not satisfy the Applicants' case.

The Applicants' argument is effectively that DCPs have the same legal status as contributions plans introduced after 1 July 1993. The duty imposed by s 90(1)(a) (iv) of the EP&A Act before 1 July 1993 was to consider the contents of a DCP in assessing a development application. There was no necessity (until 1993) for a demand for contributions from developers to be supported by a contributions plan or any other like document such as a DCP.

The validity of a condition requiring payment of a contribution was to be determined upon the test set out in s 94(1) and s 94(2) and the Council's obligations once it received the money were set out in s 94(3). If these sections were complied with the imposition of the development consent condition was in accordance with the Act and the dealing by the Council with the funds was not unlawful. Provided the Council collected funds in accordance with valid conditions of development consent and spent the money towards the purposes specified in those consents within a reasonable time, then s 94(3) has been satisfied. It is not a breach of s 94 if the exact terms of the 1987 DCP were not applied by the Council in spending the money, provided s 94(3) was complied with in the spending of contributions collected.

There was no obligation on the Council under s 94 to impose a condition requiring s 94 contributions in such a way as to be consistent with the DCP nor to expend funds paid to it in the manner anticipated in the 1987 DCP. "The purpose for which the payment was required" is to be determined by reference to the provisions of the development consents granted by the Council and s 94(1) and s 94(3). In this case the relevant conditions of consent referred to payment "towards the improvement of roads of local [within the East Bowral precinct]", (511/92), "towards the improvement of local roads to which the subdivision has its frontage" (282/92), and "for the improvement of Old South Road to which the subdivision has its frontage" (689/89, 483/88).

None of these conditions of consent refer to the 1987 DCP and nor is this required. The consents do state that "Payment to Council of contributions levied in respect of s 94 of the EP&A Act the subject of this development consent to be made … This clause has been adopted in accordance with the Council's adopted policy". This provision does not assist the Applicants' case. Section 94(1) and s 94(3) did not require that the money be spent in accordance with a predetermined program provided s 94(3) was complied with i.e. the money was applied "towards providing public amenities or public services or both within a reasonable time and in such a manner as will meet the increased demand for those amenities or services".

There is one argument the Council made which I do not accept. It does not affect my finding on this question but is a significant matter in relation to the consents granted after 1 July 1993 dealt with in Question 5. The Council argued that the obligation it has in spending the money under s 94(3) is separate and disconnected from the obligation it has in charging for and holding any monetary contribution under s 94(1).

Section 94(3) before 14 February 1992 required that the consent authority hold the contribution money "in trust for the purpose for which the payment was required". As the Council pointed out the section does not specifically state that s 94 contributions must be spent on that purpose. Rather it provides that contributions must be applied towards providing public amenities or public services within a reasonable time to meet the increased demand for those amenities or services. Section 94(1) makes clear that a contribution can only be levied if a development is likely to require the provision of or increase the demand for public amenities and services within the area.

There are clear statements in Toadalla that s 94 contributions are held by the Council by way of a "statutory" trust which has a special purpose involving the provision of public amenities and services. I consider the scheme established by s 94(1), (2) and (3) requires that s 94 contribution money held for a purpose must be spent for that purpose. Before 1 July 1993 the "purpose" was not required to be precisely determined in a plan, so that the development consent conditions requiring s 94 contributions as in force before 1 July 1993 are important in determining the scope of that purpose.

I note that in Toadalla, the applicants sought to challenge, in 1992, the validity of development consent conditions granted in 1988, on the basis there was insufficient "nexus" between the proposed development and the contributions levied to satisfy s 94. Her Honour in that case found the consent conditions in question were invalid in part because they lacked sufficient "nexus" to the development in question. In these proceedings the Applicants are not challenging the validity of the consent conditions in question and there has been no attempt to present evidence on that basis. Given my finding that the Council's obligations are defined by the consent conditions, which are valid, and the terms of s 94(3), and that obligation is not defined by the 1987 DCP, there is no basis to argue there has been a breach of s 94 based on a failure to spend the contributions in accordance with the works specified in the 1987 DCP as the Applicants have done. (I also note that in Toadalla her Honour refused to grant the relief sought, which included a refund of s 94 contributions, on discretionary grounds, an issue which is highly relevant to these proceedings and a matter I will return to).

For the Applicants to be successful in their claim they would have to show that the roadworks on which s 94 contributions were spent by Council for the consents granted before 1 July 1993 were not spent "towards providing public amenities or public services … as will meet the increased demand …" within a reasonable time. The evidence relied on by the Applicants has focussed exclusively on a failure to apply the works schedule in the 1987 DCP. That evidence does not otherwise address the issue of whether s 94(3) has been complied with in spending s 94 contributions. There is no evidence before me that the funds spent by Council were not used to satisfy increased demand for services, or were not spent in accordance with the development consent conditions in accordance with s 94(3).

The Applicants did also raise as an alternative argument that s 94 contributions received by the Council had not been spent in a reasonable time but little emphasis was given to this argument in the Applicant's submissions. There was no evidence presented in a form that I could understand to support this claim. I am unable to consider that argument further and, given the lack of clear evidence presented by the Applicants, it is unlikely that I could reach a conclusion in any event.

In terms of the first part of Question 1, the answer is in the negative. It is therefore unnecessary to answer the second part of the question, namely "If so, what was the breach of which it was guilty?". I also note that much of the Applicants' argument concerning abandonment focussed on a comparison between the 1987 DCP and the 1993 and 1996 Contribution Plans, but that analysis is not open to support claims for abandonment given my finding on Question 1. Question 2 Was the effect of the deletion of the expression "in trust" from s 94(3) of the EP&A Act in 1991 [which commenced on 14 February 1992] such as to change in any material way the nature and extent of a council's obligations pursuant to s 94(3)? If so, what was the change?

Finding on Question 2 47. The Applicants submit that the consequence of the words "in trust" being removed from s 94(3) has made no difference to the obligation of the Council in relation to the monies held. The Council agreed with this view. I also see no reason to treat the basis on which s 94 contributions are held after 14 February 1992 as any different because the words "in trust" were deleted. In other words, even though the words "in trust" were removed in 1992, the s 94 contributions were still held in a form of statutory trust. In my view there was no change in the nature and extent of the Council's obligations pursuant to s 94(3) following the deletion of the words "in trust" in s 94(3) in 1992.

48. The key question which arises is what is the nature of the Council's obligations in holding money under s 94(3), about which the parties disagree in several respects. I have dealt with one aspect of the statutory trust in Question 1 concerning the Council's obligations in holding and applying of s 94 contributions before 1 July 1993. That issue in relation to development consents granted after 1 July 1993 is dealt with more fully in Question 5. Further, the parties also disagree on whether the nature of the statutory "trust" enables payment of a refund to the Applicants. That issue is dealt with in Questions 6 and 7. Question 3 Did the amendments to the EP&A Act which became operative on 1 July 1993 affect the holding and application of monies paid under s 94 pursuant to conditions attached to consents given before 1 July 1993?

Finding on Question 3 49. The amendments to s 94 which became operative on 1 July 1993, did not affect the holding and application of monies paid pursuant to consents granted before 1 July 1993. There is no suggestion in s 94(7) that the amendments have any retrospective operation on development consents already existing pursuant to which monies have been paid. Indeed the wording of the section makes clear that the amendments apply only to development applications made on or after the date of assent of the Act introducing the requirement for contributions plans (s 94(7)). The obligations of the Council after 1 July 1993 in relation to the holding and spending of s 94 funds collected pursuant to development consents granted before 1 July 1993 continued to be the same as set out in my finding on Question 1.

Question 4 Where a council received after 1 July 1993 money by way of contributions pursuant to a consent given before 1 July 1993, did s 94 require the council to apply the money so received: (a) in accordance with any contributions plan then in force, or (b) in accordance with the terms of s 94(3) without reference to any such plan, or (c) in accordance with the terms of the condition and s 94(3) without reference to any such plan? 50. The evidence produced by the parties demonstrates that payment of s 94 contributions pursuant to consents given before 1 July 1993 took place for several years after that date.

51. The Council submits that for the consents granted before 1 July 1993, Frevcourt paid over a period of three years and 11 months (27 September 1993 to 27 August 1997) a total of $223,762 for "the improvement of local roads"; that Kettle paid over a period of 10 years and five months (25 August 1989 to 14 January 2000) the sum of $117,954 of which $66,960 was contributed towards "the improvement of Old South Road" and $50,994 towards "the improvement of local roads …"; and that Rutar paid, over a period of four years and three months (3 January 1991 to 5 April 1995), a total of $121,196 towards "the improvement of Old South Road". Consequently a number of payments were made after the amendments introducing contribution plans to s 94 came into effect on 1 July 1993.

Finding on Question 4 52. The answer is (c) in that clearly the terms of the conditions of consent are relevant within the context of s 94(3) of the EP&A Act and s 94(3) itself must be complied with. A contributions plan which was not in existence at the time the consents were granted will obviously not affect how contributions paid under those consents are applied. This answer flows logically from my findings on Question 1 - 3.

Summary of conclusions on claims for consents granted before 1 July 1993 53. Given my findings on questions 1, 2, 3 and 4, the Applicants' claims in relation to abandonment for the development consents granted before 1 July 1993 must fail (Frevcourt 282/92, 511/92; Kettle 483/88 (as unamended); Rutar 689/89). The Applicants have failed to demonstrate there was of a breach of s 94 because of abandonment by Council of work specified in the 1987 DCP. The Applicants did not base their case on a failure to spend the s 94 contributions in accordance with the conditions of consent and s 94(3). Furthermore, there has been no challenge to the validity of the development consent conditions pursuant to which payment has been made, and payments made under the consents must be presumed valid as a consequence. Statutory position after 1 July 1993 Question 5 Where monies have been paid to a council by way of s 94 contributions pursuant to a valid condition attached to a consent validly given after 1 July 1993, is the council necessarily in breach of the Act if it applies the monies otherwise than in accordance with the schedule of works contained in the contributions plan in force at the time of: (a) the consent; or (b) the application of the monies? If so, what is the breach of which it is guilty? Applicants' arguments 54. The Applicants' argue that the roadworks to be carried out with the Applicants' s 94 contributions were identified in substantial detail in the relevant Contributions Plans including the 1987 DCP and the 1993 Contributions plan. (I found in Question 1 that the 1987 DCP does not have the same legal effect as a contributions plan). The Applicants also relied on the fact that the 1996 Contributions Plan reduced the works program to that in the 1993 Contributions Plan. (The table at par 20 shows a big reduction ($1,556,375) in roadworks proposed under the 1996 Contributions Plan compared to the 1993 Contributions Plan). The obligation of the Council is to spend s 94 contributions in accordance with a contributions plan as implemented through development consent conditions and to do so in a reasonable time. The obligations of the Council continued to be the same as defined in Levadetes (see par 25). Failure to meet those obligations is a breach of s 94 of the EP&A Act. Although not made explicit in the Applicants' argument, I understand the Applicants' case to be that the contributions plan in force at the time development consent was granted must be applied (option (a) in Question 5).

55. Does Council have discretion in how it applies monies collected in accordance with conditions imposed on the basis of a contributions plan in force at the time development consent is granted? The parties referred to the decision of Bignold J in Rodmac Investments Pty Ltd v Great Lakes Shire Council (Bignold J, NSWLEC, 2 August 1991, unreported). His Honour at 8 states: Although in the case of the statutory trust created by s 94(3), the statute itself makes clear stipulations as to whether, when and how the trust duties are to be fulfilled, an administrative discretion vested in the consent authority must, by necessary implication, exist in order that the trust can be implemented in a workable and manageable manner and the trust purpose be fulfilled.
56. The Applicants made two alternative submissions in relation to discretion to apply s 94 contributions. (1) After 1993 the Applicants argue that the Contributions Plans had to specify the "specific works" for which s 94 contributions could be collected in a schedule. There was flexibility in the provision of roadworks in the schedule in the contributions plans. Roadworks carried out must be in accordance with the schedule, or be related alternative roadworks. It is not open to the Council to abandon the specified roadworks or do something completely different not covered by a contributions plan. The Applicants concede that the law as contained in Rodmac allows for flexibility in how the Council can disperse the s 94 money, provided that it is for relevant public amenities or services as required under s 94(3), so that it must still have a link to the s 94(1) purpose. In other words, a reasonable substitute is allowable. The Applicants argued that because the Council has no plans to provide the relevant or related roadworks there has been a failure to disperse the monies in accordance with s 94(3).

(2) Alternatively, the Applicants submitted that the discretion allowed to Councils in disbursing s 94 monies, as recognised in Rodmac, no longer applies after 1 July 1993. The Council does retain a discretion to vary the amenities/services s 94 contributions are spent on if the ability to provide a "specific amenity" is no longer available and the next contributions plan substitutes a viable and proper alternative. The discretion is determined by the terms of the contributions plan.

57. Further, it is not the case that such a discretion is one which entitles the Council to "abandon" the specified roadworks entirely which the Applicants argue has occurred here.

Council's submissions 58. The Council argues that the EP&A Act, whilst requiring the imposition of conditions of consent pursuant to s 94 only in accordance with a Contributions Plan, does not contain a provision requiring that moneys paid pursuant to such a condition be expended in accordance with the Contributions Plan. Rather, s 94(3) provides that the money collected by a Council by way of contributions paid pursuant to s 94(1) must be held for that purpose but requires only that it be applied "towards providing public amenities or public services … in such a manner as will meet the increased demand". The Council suggests it can collect money for roadworks specified in a contributions plan and apply it for other related roadworks, provided that s 94(3) is complied with.

The provisions in the regulations do not require strict adherence to a Contributions Plan, insofar as it identifies specific proposals for expenditure. The Council argues the EP&A accounting regulation requires that monies expended will have been spent "on the various kinds of public amenities or services" for which the contributions have been received (EP&A Regulation 2000). I note that the EP&A Regulation 1980 cl 41L which applied at the relevant time, later the EP&A Regulation 1994 cl 34, used the word "categories" rather than "kinds".

The words "towards providing" in s 94(3) suggest that Parliament intended that monies be applied in accordance with the section, and not in accordance with any other criteria: Rodmac at 9.

The Council argues that the purpose of a contributions plan is to ensure that there is a logical and comprehensive approach to the assessment of the nature and quantum of the s 94 contribution demanded, and to demonstrate that the relevant nexus between the levy and development is present. It does not require a Council to conduct its financial affairs in relation to the provision of public amenities and services according to a fixed scheme from which it is not free to depart if circumstances warrant. There is discretion in the manner in which the money is applied. The obligation of a council is to see that the public purpose which underlies the contributions scheme can be implemented in a workable and manageable way (see Rodmac and Toadolla).

Contributions plans are made upon the basis of the best information available about future needs and demands. That information is prognosticatory and may sometimes be wrong. A council should not be held to every element of its plans and the EP&A Act does not attempt to do so. It recognises by its silence that the purpose of the contributions plan is served by its making, not by its implementation. The method of assessment of the contributions, which provides the test of the validity of the condition, is ultimately, when it comes to paying for the amenity or services, subjugated to the practicalities of affording and paying for what is required.

There is discretion available to the Council in how s 94 monies are spent provided this conforms with s 94(3). The discretion must be exercised to ensure that the demand created by new development is met, insofar as and to the full extent that is workable and manageable: Rodmac. The Council relies on Rodmac to assert that the Council has some discretion to substitute one facility for another provided s 94(3) is complied with.

Finding on Question 5 64. In order to answer the question posed, it is necessary to review the Council's obligation to hold and apply s 94 contributions after 1 July 1993. Is the Council obliged to spend s 94 contributions on the same basis for which these are collected? 65. The terms of s 94(3) have not materially altered since the introduction of contributions plans, given my finding in Question 2 that the removal of the words "in trust" in 1992 did not affect the basis on which money is held under s 94(3). Section 94(3) is essentially the same as I considered in Question 1 in relation to development consents granted before 1 July 1993. The obligation under s 94(3) is still that expenditure must be applied towards providing public amenities or public services and in such a manner as will meet increased demand for public amenities and services within a reasonable time. The way the section is drafted does not expressly require that the money held for the purpose for which it is required under s 94(1) and s 94(3) be spent for that purpose, as I noted at par 42 in Question 1. The only basis, however, on which a condition seeking monetary contribution under s 94 can be levied is on the basis of a contributions plan under s 94(7) of the EP&A Act.

66. I held earlier in Question 1 that there was an obligation imposed under s 94(3), in the context of s 94(1) and (2), to apply the money for the purposes for which it is held. It is problematic for the application of the statutory "trust" under s 94(3) to specify the purpose for which s 94 contributions must be held, but maintain it can be spent in a way that does not meet that purpose. Further, by virtue of s 94(7) the only basis for levying a s 94 contribution after 1 July 1993 is under a contributions plan. The scheme of the Act from 1 July 1993 together with the EP&A Regulations cl 47F, 47L(1) and (2) (see par 16, 17, 18) makes clear the purpose for which money is received under s 94, being the contributions plan as implemented by the consent conditions made in accordance with the contributions plan, is also the basis on which money must be expended pursuant to s 94(3). The relevant contributions plan in relation to which monies must be expended is the one in force at the time development consent is granted because it is at that point the relevant "nexus" between the development and the amount to be contributed for amenities and services must be fixed. As s 94 contributions can only be imposed for the purposes stated in a contributions plan, the contributions can only be spent on that basis as implemented by the relevant conditions of development consent imposed in accordance with the contributions plan.

67. This interpretation is supported by the Regulations introduced in 1992 which provide specific requirements for the content of contributions plans under s 41F, including the details establishing the nexus between the expected types of development in an area and the demand for additional public amenities and services to meet that development (cl 41F(c)). Clause 41L(1) requires that accounting records for s 94 contributions must be kept so that they may be distinguished from other money held by the Council. Clause 41L(2)(a), (b) and (c) require expenditure of s 94 contributions to be recorded. The recording of expenditure must specify "the amounts spent in accordance with the plan by reference to the various categories of public amenities or services for which they have been spent" (cl 41L(2)(c)).

68. My disagreement with the submissions of the Council relates to the extent to which there must be a clear link between the purpose for which money is collected under a s 94 contribution plan and the facilities and services it is spent on in accordance with that plan. I consider there must be a clear link. There are, however, some circumstances where the Council may not spend money precisely in accordance with a contributions plan and not be in breach of s 94. Further, these limited circumstances are supported by the wording of s 94(3). They are all circumstances which the Council raised in support of its arguments. Three of the limited circumstances relevant to this case follow.

(1) Contributions exhausted 69. I agree with the Council's argument that it is open on the wording of s 94(3) that not all of the amenities identified in a contributions plan must be built if, due to cost increases between collection and later application of s 94 contributions, it is no longer possible to build the same number or extent of facilities from the amount of s 94 contributions collected. Section 94(3) recognises the need to apply the s 94 contributions "towards providing public amenities or services or both … and in such a manner as will meet the increased demand for those amenities or services or both." Under this scenario all the s 94 contributions would nevertheless be spent on amenities and services specified in the contributions plan but on a reduced basis. This circumstance would not be a breach of s 94(3) in my view.

(2) Less demand for services 70. If there has been an unforeseen reduction in the actual level of increased demand compared to that anticipated in a contributions plan for a greenfields site so that facilities and services are not proceeded with to the same extent as originally envisaged is that a breach of the EP&A Act? Arguably not in that the collection of monies pursuant to a s 94 contribution plan is proper at the time of collection and it may well be (as the Council argued here) that there has been expenditure towards the provision of these facilities and services in accordance with s 94(3), just not to the extent envisaged in the contributions plan. It does not automatically follow that in these circumstances there will be "excess" money. Whether there is "abandonment" and excess funds under this scenario will depend on the evidence.

(3) Extent of discretion to substitute works for those in a contributions plan 71. The extent to which works can be substituted for those in a contributions plan was raised in argument. Since 1 July 1993 contributions plans have been required as the basis upon which s 94 monies are collected by councils and I have held contributions must be spent for purposes defined in a contributions plan as implemented by the imposition of consent conditions imposed in accordance with the contributions plan. Councils have less flexibility than before 1 July 1993 in exercising their discretion in how s 94 money ought be spent. I do not consider that councils have as wide a discretion in the use of s 94 funds outside a contributions plan as the Council has argued.

While I can agree there is some flexibility in how s 94 contributions are spent, as recognised by the Applicants in their first argument (see par 56), the extent of the discretion available to the Council depends in large part on the wording of the relevant contributions plans and the facilities or services in question. The Council gave an example of collecting s 94 funds to pay for six netball courts but then using the funds to pay for a basketball court which is more expensive to build than a netball court. That may well be acceptable. In the case of roadworks, however, there may be far less scope to enable substitution which is still in conformity with the contributions plan. The terms of the contributions plans will define the scope of the Council's discretion. To what extent the Rodmac "workable and manageable" approach (see par 55) can be applied will depend on those terms and the nature of the facilities and services to be provided.

I do not accept the alternative argument (argument (2)) put by the Applicants (par 56) that there can only be substitution of facilities on the basis of a subsequent contributions plan.

The actual wording of the development consent conditions are also relevant in considering what the Council's obligations are in each case. Nelson and Rodmac demonstrate how the development consent conditions can allow more or less flexibility to councils in carrying out works using s 94 contributions. The Applicants relied on Nelson v Ballina Shire Council (1993) 80 LGERA 271 in support of their argument. In Nelson the council had required a s 94 contribution for a specific public amenity - the sealing and draining of a portion of road - as a condition of the development consent. The council had not carried out the works and requested the applicant to pay more money before it would carry out the work. The applicant sought a declaration and a mandatory injunction to compel the council to carry out that work. Bignold J found that the council was in breach of its obligation under s 94(3) and so declared.

The key factual difference between Rodmac and Nelson related to the general nature of the development consent conditions in Rodmac in contrast to the specific development consent conditions in Nelson which the council was obliged to apply. The decisions in Rodmac and Nelson concerned the statutory position before 1993 but are useful to refer to as demonstrating the importance of development consent conditions.

For the development consents granted after 1 July 1993 in this case, the relevant conditions provide for the payment "towards the improvement of local roads to which the subdivision has its frontage, and having the benefit of local access thereto …". These consent conditions, underpinned by a contributions plan in this case, are quite general in nature. Such conditions arguably provide broader scope to the Council in its application of s 94 contributions pursuant to a contributions plan than if the consent conditions specified particular facilities and services by name.

The answer to Question 5 is that s 94 contributions must be applied to the schedule of works in the contributions plan in force at the time development consent is granted, not a works schedule in a later contributions plan. There are circumstances outlined above where failing to precisely carry out that schedule of works will not be a breach of s 94. Have the Applicants satisfied the onus of proving that there is a breach of s 94(3)? 78. The Applicants claim for abandonment can only be considered in relation to the four development consents granted after 1 July 1993. The Applicants may only have a claim in relation to works "abandoned" in the 1993 Contributions Plan as evidenced by their absence from the 1996 Contributions Plan. The Applicants bear the evidentiary onus of proving there is a breach of s 94 on this basis. Much of the Applicants' case relied on the Council's alleged failure to carry out any roadworks specified in the 1987 DCP. I have already held there is no breach of s 94 resulting from that alleged failure.

79. The Applicants' evidence was presented largely in table format, produced by their expert Mr Price, which purported to show those works Mr Price considered to have been abandoned between the 1993 and 1996 Contributions Plans (Table 14 by Price in exhibit W). It is difficult to work out what exactly the Applicants are claiming by way of refund. The expert evidence of Mr Price relied on by the Applicants suggests that a failure to complete the whole project constitutes abandonment. Some of the Applicants' arguments suggested that the Applicants were claiming a percentage unspent based on the percentage of work alleged to be incomplete. In either case, the Applicants' arguments do not take into account that substantial partial work may have been carried out, so that, while the whole project has not been completed, contributions are nevertheless entirely spent.

80. The Council argues there is no abandonment of any works in breach of s 94 because works specified in the 1993 Contributions Plan or appropriate substitutes which satisfy s 94(3) have been undertaken. It is clear from the evidence produced by the Council (Exhibit Z - affidavit of Michael Brearley sworn 22 March 2002, annexure A) that s 94 contributions have been spent on specific roadworks identified in the 1993 Contributions Plan, although not always to the extent originally intended. Further, funds far in excess of those received from the Applicants have been expended by the Council on roadworks in East Bowral in accordance with the 1993 Contributions Plan. Council's evidence is that $88,016 was received from Frevcourt and Rutar for consents received after 1 July 1993. (This does not take into account contributions received, if any, in relation to the 23 lots consented to in the amended Kettle consent 483/88. According to the Council's records no payments were received from Kettle for post 1 July 1993 consents, but it does not consider that consent to be post 1 July 1993. In any event, applying the relevant contributions figures per lot would not greatly increase the $88,016 figure). On the Council's evidence there is no s 94 contribution received from the Applicants for the consents granted after 1 July 1993 which is unspent. Further, the spending of the s 94 contributions has been lawful.

81. Large road projects in East Bowral require contributions from a large number of contributors to enable sufficient funds to accumulate to enable the roadworks to be built by the Council. In Toadolla Pearlman J stated at 267 - 8: s 94 contemplates that a contribution may not be sufficient to defray the whole of the cost of providing public amenities and services because it provides that the Council will "… apply the money towards …" the provision of those amenities and services.
82. Whether there are excess funds as a result of not precisely fulfilling a works schedule in a contributions plan in the three circumstances set out at par 69 - 76 will depend very much on the facts. I am here considering roadworks. The Applicants have contributed a proportion of the total funds necessary for particular road projects, not all of which have proceeded to their full extent. It is unclear from the evidence presented by the Applicants that there are circumstances of non-compliance with the 1993 Contributions Plan which are a breach of s 94(3). In light of the evidence produced by the Council the Applicants have failed to discharge their evidentiary burden of proof. The Applicants have therefore failed to establish on the evidence that there has been a breach of s 94. Council's obligations in holding s 94 contributions Questions 6 and 7 Is the correct description of the legal obligation arising under s 94 and affecting the Council's holding and application of s 94 contributions (the so-called "trust") one which gives primacy to the Council's duty to administer the funds for statutory purposes in the interests, and for the benefit, of the public? (Q6) If so, is payment out of the s 94 fund to a former contributor of money by way of "refund" consistent with that obligation and with the Act? (Q7)

Applicants' argument 83. The Applicants argued that s 94 contributions are held on the basis of a statutory trust as described in Toadalla. Unlike the Council however, the Applicants maintained that in circumstances where the Council did not spend the s 94 contributions as it was required to do, it would be in accordance with the terms of the trust that the unspent contributions be returned to the contributor of those funds. This would not be a breach of the statutory trust in which the money was held, it not being a charitable trust where payment could only be made for charitable purposes defined by the trust which precluded payment to a person who was not a "beneficiary" under that trust. There is no claim made by the Applicants that there has been a breach of any "trust" which entitles the Applicants to specific relief. Reliance is placed once again on Levadetes, see par 25.

84. The Applicants referred to several decisions of this Court in which observations were made relating to the power of the Court under s 124 to remedy breaches of s 94 including the potential for the giving of "refunds" of s 94 contributions. There does not appear to be any case in which the Court has ordered a refund to be paid.

85. The Applicants submitted that the ability to make a claim for the return of contributions where a Council did not comply with s 94(3) was, by implication, approved by Pearlman J in Toadalla. In Toadalla, a refund of s 94 funds or an order that s 94 monies be spent on specific public amenities was sought. Pearlman J found there was no breach of s 94 and did not have to make orders as sought by the Applicant. As her Honour made no suggestion in the judgment that such orders were beyond power, the Applicants submitted this supported their case.

86. Statements by Stein J in the Class 1 appeal by Frevcourt to the effect that if a certain facility did not proceed then there ought to be a refund were also referred to by the Applicants (see Frevcourt Pty Ltd v Wingecarribee Shire Council (1992) 80 LGERA 75).

87. The case of Denham Pty Ltd v Manly Council (1995) 89 LGERA 108 is a key case relied on by the Applicants. Denham had been granted development consent for a hotel subject to a condition that it make a contribution for open spaces and other public amenities. After commencing work the construction was discontinued and Denham later lodged an application for a different development. This was granted on the basis that another s 94 contribution for public amenities and services be paid. His Honour appeared to approve the proposition that the Applicant was entitled to a refund under s 124 of the EP&A Act of the first contribution if the contribution had not been spent. His Honour stated at 115: If the purpose cannot be achieved then arguably the contributors to the fund may be entitled to such proportion of their contribution as the total amount unexpended bears to the total paid in. As it was not possible to identify the first contribution as remaining in the general fund kept by the Council, Talbot J refused to order a refund.

Council's arguments 88. The Council relies on Toadolla as authority for the proposition that, due to the nature of the obligation under s 94, the Council must administer the trust in the interests of the "public as a whole" (and not the contributors) in providing the public amenities and services. The public as a whole becomes the beneficiary of the trust. Accordingly, provided the Council can show that it has complied with s 94 in the collection and disbursement of money it cannot be liable to the contributors of that money. Bathurst City Council v PWC Properties Pty Ltd (1998) 100 LGERA 383 means that little or no weight should be placed on earlier cases such as Levadetes, Idameneo (No 9) Pty Ltd v Great Lakes Shire Council (1990) 70 LGRA 27 and Denham. In circumstances where a breach of s 94 is found the appropriate beneficiaries to whom payment could be made are arguably the current owners of the subdivided land, not the Applicants. Alternatively, it could be retained by the Council and applied for the benefit of the community.

89. The Council relies on PWC to assert that the Council holds the contributions in trust "for the public benefit", such that those funds cannot lawfully be used for another purpose, i.e. payment to the Applicants. The Council argues that although there may be some cases decided prior to PWC where a view was expressed in obiter remarks that a refund could be given (such as Levadetes, Denham and Idameneo), it would be inconsistent with the nature of the obligation expressed by the High Court in PWC to order a refund. The Council therefore asserts that little or no weight should be given to the views in the earlier cases.

90. The Council argued that the observations of the Court in Denham suggesting refunds were possible were obiter dicta and were made before PWC. The Council further argued that Denham was particular to the facts in that case, namely there were two development consents for the one site, one of which did not proceed. Contributions were paid for both development consents. The Council argues that Denham reflects the unusual facts of that case. If the Applicant had received the money back it would have been because the contributions should not have been paid in the first place, not because of a breach of the Act due to a failure to expend funds properly collected. The Council also pointed out that at the time Denham was decided, there were no other possible beneficiaries who could claim the money, the site still being in the Applicant's hands.

Finding on Question 6 91. Section 94 contributions are held on statutory trust by the Council. Question 6 asks whether that "trust" gives primacy to the Council's duty to administer the funds for statutory purposes in the interests, and for the benefit, of the public. It is clear from Toadalla and PWC that the application of the "trust" by a council must be on this basis, but that does not mean the Council's duty in administering the trust is clear in all situations.

92. In Toadolla Pearlman J was required to consider whether there had been a breach in relation to money paid pursuant to s 94 and held in trust by the Council. Pearlman J stated (at 267): when one examines the statutory trust created by s 94 in the town planning context, it becomes obvious that there are features which distinguished that "trust" from "trusts" that are usually the subject of trust law. The s 94 "trust" refers to monetary contributions which the Council receives in order to discharge public administrative functions. There are no circumstances here of enforcement of private rights between private citizens. Next, I would be loathe to conclude that the beneficiary of the trust is the contributor who paid the monetary contribution, in the sense that the Council, as trustee, would need to act solely in that beneficiary's interest. That is not at all the case - there is a special purpose attached to the trust which involves the public as a whole in the provision of public amenities and public services.
93. Her Honour stated at 268 that: it is … inappropriate to apply general principles of trust law to the "trust" created by s 94(3) so as to find breaches of trust, unless the language of the section expressly or by necessary implication imports those principles ".

94. In PWC the High Court was required to consider whether certain land vested in the Council was "land subject to a trust for a public purpose" and thereby taken to be classified as "community land" under cl 6(2)(b) of Sch 7 to the Local Government Act 1993 (the LG Act).

95. The Court concluded that the land was "land subject to a trust for a public purpose" and stated at [67]: The term "trust" in cl 6(2)(b) of Sch 7 is apt to include those governmental responsibilities which, whilst not imposing a trust obligation as understood in private law, may fairly be described as a "statutory trust" which bound the land and controlled what otherwise would have been the freedom of disposition enjoyed by the registered proprietor of an estate in fee simple. The trust was "not a trust for persons but for statutory purposes". [footnotes omitted]

96. It should be noted that at the time relevant to the facts in PWC, s 94 of the EP&A Act did not exist. However, PWC arguably confirms the statements of Pearlman J in Toadalla about the nature of the trust under which s 94 contributions are held. Neither case deals precisely with the question of whether a "refund" can be made to a contributor from that statutory trust. Indeed, that issue could not arise in PWC. Given that the scope of the statutory "trust" under s 94 is largely undefined in the legislation, the precise nature of the trust is difficult to lay down in the abstract. Finding on Question 7 - Is payment out of the s 94 fund to a former contributor of monies by way of "refund" consistent with that obligation and with the Act?
97. The EP&A Act is silent as to whether a refund of s 94 contributions is appropriate. Toadalla does not rule out a payment from the statutory "trust" in which s 94 contribution monies are held to the contributor of those funds. Pearlman J's comments in Toadalla on the nature of the trust to the effect that the beneficiary of the trust is not necessarily the contributor also do not suggest that in no circumstances can a refund ever be made. PWC did not deal with the issue of a "refund" at all as it did not deal specifically with s 94.

98. PWC is not conclusive on what the terms of such a trust are and does not preclude the Council or the Court deciding that money should be repaid to a contributor in appropriate circumstances. I do not think that PWC changes the law in relation to the basis on which s 94 contributions are held by councils to the extent the Council has argued. PWC certainly emphasises that the holding of property by a council must be for the public benefit, but I do not consider that rules out the theoretical possibility that a refund could be made to the contributor of that money. The circumstances in which the refund will be open are likely to be extremely limited however. Arguably, administering the trust "for the public benefit" will require the Court to ascertain if there are uses to which the money can be put by a Council which will fulfil the terms of the trust under s 94(3) and such possibilities ought be exhausted before a refund should be considered. That is, it is only if there is no possibility that the purpose of the trust can be fulfilled that a refund should be considered.

99. It is clear from Toadalla, Idameneo, Levadetes and Rodmac, all of which predate PWC, that the Court is reluctant to order a refund and will generally look to other remedies. Denham, the case where a refund was most seriously contemplated by this Court, reflects the unusual circumstances of that case, as the Council argued. If the opportunity to obtain a refund is theoretically open to the Applicants it would only be if all other avenues for spending the money appropriately can be exhausted and provided there are not discretionary grounds suggesting that such an order ought not to be made. Court's jurisdiction Question 8 (i) Does the Court have jurisdiction to require a council to make a payment out of the s 94 fund to a former contributor by way of "refund". (ii) If the Court has jurisdiction, upon what basis can it make such an order?

(iii) If the Court were satisfied that a council had not applied monies "within a reasonable time", would any other remedy be available?

Applicants' submissions 100. The Applicants' submissions address this argument only on the basis that there is a breach of the EP&A Act in this case. Section 124 of the EP&A Act provides: (1) Where the Court is satisfied that a breach of this Act has been committed or that a breach of this Act will, unless restrained by order of the Court, be committed, it may make such order as it thinks fit to remedy or restrain the breach. The Applicants are seeking a substantial refund of monies paid to the Council on the basis that the Court has a wide discretion under s 124 to remedy any breach of the EP&A Act and can so order.

101. The Applicants relied on F Hannan Pty Ltd v Electricity Commission of New South Wales [No 3] (1985) 66 LGRA 306 and Scharer v State of New South Wales (2001) 116 LGERA 217 to show the wide nature of the discretion that this Court has in granting relief. In Hannan the Court of Appeal had to determine the validity of an environmental impact statement. In the course of their judgements the members of the Court of Appeal made observations regarding the jurisdiction and power of this Court. Street CJ noted (at 311) that: Well-established cannons of construction require a mandatory significance to be placed upon the phrase in [s 124(1)] "may make such order as it thinks fit to remedy or restrain the breach". Where an actual or threatened breach has been established the Court is obliged to consider what should be done to remedy or restrain the breach. In determining this, the Court is given an extremely wide charter. … This … phrase empowers the Court to mould the manner of its intervention in such a way as will best meet the practicalities as well as the justice of the situation before it. The Applicants assert that the nature of this power would allow this Court to grant a refund to them in this case.

Council's argument 102. The relief available under s 124 of the EP&A Act while not limited as to type is limited by the Court's jurisdiction in class 4 proceedings as defined by s 20(2) of the Court Act. The Applicants must establish that an order to refund money will be within jurisdiction because it will "enforce a duty or obligation" under the EP&A Act or correspond with a "command to exercise a function" under the EP&A Act and further, that to order such a refund will "remedy a breach of the Act".

103. The breaches the Applicants seek to establish are not clear but can be assumed for this argument to be a failure to apply some s 94 contributions within a reasonable time.

104. The funds contributed must be regarded as having been contributed in accordance with the valid requirements of a valid consent. All consents have been implemented and none are now challenged. There are no appeal rights remaining and the Court has no other power to step in. The decision of Talbot J in Mirvac Homes (NSW) Pty Ltd v Baulkham Hills Shire Council (2000) 110 LGERA 100 cannot be interpreted as a finding that the Court has a general supervisory jurisdiction to watch over councils and developers. Even if it were shown that sums paid by the present Applicants could have been avoided or challenged, the fact is they were not. These proceedings, taken years after the event and after the funds contributed have been subjected to the "trust", are too late. The consents must be taken to be valid. It is not open for the Applicants to mount a challenge or take review proceedings in relation to any matter arising out of the consents or their implementation. While the Applicants say they do not do so overtly, the fact is these proceedings are an attempt to do so.

Finding on Question 8 105. I make the following findings in relation to the three questions posed: (i) The cases relied on by the Applicants clearly suggest that the Court does have power to order a refund, assuming jurisdiction can be established on the facts in a particular case. I agree with and adopt the Council's submissions that the Court does not have jurisdiction under s 124 of the EP&A Act in the absence of a breach of that Act. The Applicants' arguments are based exclusively on the assumption there is a breach of s 94(3) of the EP&A Act in this case. However, it is far from clear on the facts presented to the Court in relation to roadworks that any breach of s 94 has occurred as a result of the Council's actions. (ii) It is unnecessary to answer (ii), and its meaning is unclear in any event.

(iii)Assuming there is a breach of the EP&A Act because the Court was satisfied that a Council had not applied monies "within a reasonable time", the case law makes clear that the Court can make orders such as requiring that work for which monies have been collected be carried out by the Council. I also stated in answer to questions 6 and 7 that while a refund cannot be ruled out, the Court will first look to other remedies such as whether contributions can be spent in conformity with the trust on public facilities and services required to meet the demand from the development. The only relief sought by the Applicants here is that of a refund and if I had found there was a breach of s 94 I would have provided an opportunity to the Council to address me on what other remedies are available to the Court. 106. I also note that in Hannan Street CJ thought that a right that can be enforced in any ordinary court will not necessarily be enforced by this Court; this Court in exercising its power under s 124 must have regard to the objects of the EP&A Act (at 313). His Honour noted (at 313) that: This involves, in appropriate cases, the evaluation of matters extending beyond the mere determination of the rights and matters in dispute between the immediate parties. It involves due weight being given to the public interest and the interests of other affected persons in the overall context of the pursuit of the objects broadly set out in s 5 . These comments have particular application in a case of this nature where a statutory trust to be administered for the public benefit is concerned.

Question 9 Assuming that the Court has power or jurisdiction to make an order that a council "refund" monies to a former contributor, is the contributor entitled to such an order where the contributor cannot prove that the actual funds contributed by him/her/it have not been spent in accordance with s 94(3). That is, is the contributor entitled to an order whether or not the funds contributed by him/her/it (as opposed to funds paid by others) are unspent?

Applicants' arguments 107. The Applicants submitted that Denham showed that in an appropriate case a refund can be made by a Council provided that sufficient money remained in the s 94 account. On the Applicants' expert evidence of Mr Price there are monies left in the account. According to Mr Price excess funds remain in the amount of $871,767. (This amount is disputed by the Council).

Council's arguments 108. The accounts show that all the s 94 contributions paid by the Applicants have been spent. The Council submits that for the two Frevcourt post-1993 consents (338/95 and 102/96) total payments of $41,846 were received during 1997. For the one Rutar post-1993 consent $46,170 was received in 1997. (As set out earlier at par 51 the amounts paid for consents granted before 1 July 1993 totalled $462,912).

109. The Council's evidence (Exhibit Z - affidavit of Michael Brearley sworn 22 March 2002, annexure A) establishes that actual expenditure on roads to serve the demand created by development in East Bowral completed by 2001, with much of the work completed earlier, totalled $4,691,007. $1,558,499 was identified as properly to be funded by s 94 contributions. A further sum of $2,401,863 is required to be spent, of which $2,047,887 should come from s 94 contributions. The total of s 94 contributions paid by the Applicants (even including the $462,912 paid pursuant to the pre 1 July 1993 development consents which I have said cannot be claimed) is far less than the amounts spent on roadworks in East Bowral by the Council.

110. The evidence of the Council shows that the process of expenditure by the Council has been attenuated. Much of the work for which s 94 contributions have been collected was not commenced or completed until the mid to late 1990s (leaving aside the argument whether the roundabout at Kangaloon and Old South Roads built in 1991 - 1993 was not within the description of works for that intersection program in the DCP). It is clear that sums expended on roadworks were attributable to the demand resulting from development of East Bowral and the sums spent vastly exceed the amount paid by the various Applicants (even if the Kangaloon Road roundabout issue is ignored). The Applicants have failed to establish that it was not their money which was expended. As in Denham, the absence of any requirement that the Council treat funds within its accounting system in a manner so that they can be traced means the Applicants would have an impossible task to establish their monies were unspent.

Finding on Question 9 111. This question as drafted assumes that the Court does have power to order a refund to a contributor, but it should be noted that in this case I have made no finding that there is a breach of s 94, which is necessary to found the Court's jurisdiction to do so. The Applicants must show, applying Denham, that the s 94 contributions claimed by them for the four post 1 July 1993 consents, totalling at least $88,016, have not been spent. They have failed to discharge the evidentiary burden on them to do so. The findings of Talbot J in Denham (at 115) are directly applicable to this case and are worth repeating here: The applicant has not proved by tracing or any other accounting procedure that the contribution paid in the sum of $173,915.20 remains in the fund. It cannot do so by showing that the balance in the account at any relevant time appears to have exceeded that amount. The Council expended an amount significantly in excess of $173,915.20 out of the fund in the period between payment in and the demand for a refund. The only reason money remained in the account was that further contributions were being received on a regular basis. The surplus funds were not there as a consequence of a failure by Council to incur expenditure. … In the absence of a capacity to isolate any unspent part of the applicant's contribution from the balance in the fund at the relevant date, no refund can be made. … There being no means of distinguishing any part of the fund as being the applicant's contribution, the claim must fail. This may be an unjust result in the eyes of the applicant but it flows from the nature of the scheme established by s 94.

112. Even allowing for disputes between the parties on the amounts spent on certain roadworks, particularly whether the costs of a roundabout at Kangaloon and Old South Roads should have been paid from s 94 funds, it is clear the Council has spent well in excess of the Applicants' s 94 contributions under the post 1 July 1993 consents for roadworks specified in the 1993 Contributions Plan. (The Council's evidence is that it has also spent well in excess of all the contributions ($462,912) received pursuant to development consents granted before 1 July 1993).

113. In this case the Applicants were early contributors for a large ongoing project, namely roadworks in East Bowral, which roads the Applicants' subdivisions fronted. It is clear from Denham that once Council has spent the money contributed by a contributor, the contributor will be unable to recover that amount. That result must follow because of the nature of the scheme established by s 94. In the present case the Applicants have been unable to show that their money remains unspent.

114. There is also a dispute between the parties as to whether the Council was correct in transferring $605,539 from the Council's s 94 fund to the general fund in September 2002, after these proceedings were commenced. The Applicants' expert, Mr Price, argues that $871,767 should remain in the s 94 fund. It is unnecessary that I resolve this factual dispute as it will not assist the Applicants' case. As can be seen from Denham, the fact that money remains in the account because of later contributions is not enough to entitle the Applicants' to recover money. It is not enough to show that the total amount that remains in the fund is enough to cover the Applicants' claim. The amount that remains in the fund is essentially irrelevant if the Applicants cannot show that their money remains unspent. The Applicants have failed to do so.

Conclusion on abandonment claim 115. I do not think there is any claim available to the Applicants for contributions concerning "abandonment" of roadworks in relation to the development consents issued to the Applicants before 1 July 1993. Nor, on the evidence presented, is it clear that there is any breach of s 94 in the way the Council has disbursed s 94 contributions paid pursuant to development consents granted after 1 July 1993. The Applicants have failed in their claim in relation to abandonment and in proving that any of the Applicants' funds actually remain to be refunded in the event a breach of s 94(3) was able to be established. Legal issues - Overpayment and damages (i) Is the Applicants' claim for overpayment maintainable? 116. The Applicants' claim for overpayments relies upon the principle that a Council is only entitled to collect a s 94 contribution based upon a s 94 Plan which was operative at the time the consent was granted: see Stockland (Constructors) Pty Ltd v Baulkham Hills Shire Council (Pearlman J, NSWLEC, 10 July 1996, unreported) and Mirvac.

117. The Applicants argue that, in breach of s 94 of the EP&A Act, the Council has collected contributions for some consents based upon the s 94 Contributions Plan adopted in 1993 when, at the time the consents were issued, the 1987 DCP applied. For other consents contributions were paid based upon the 1996 s 94 Contributions Plan when the 1993 s 94 Contributions Plan was applicable at the time the relevant consent had issued.

118. It is important to state what this case is not. It is not a challenge to the validity of the consent conditions in the eight development consents in question, the last of which was granted in 1996. Apart from two successful Class 1 appeals in 1993 against conditions concerning s 94 contributions in development consents granted to Frevcourt, there has been no challenge to any of the development consent conditions in issue. Accordingly, the development consent conditions contained in the development consents in these proceedings are valid.

119. The fundamental difficulty with the Applicant's argument in relation to overpayment is that the development consent conditions pursuant to which the overpayments are said to have been made are valid. The Applicants did not challenge the consent conditions or the sums payable at the time the payments were made but, as the Council noted, now essentially seek to do so many years after the money was paid. The Applicants' argument that there had been overpayment relied on the decision in Mirvac. Mirvac was a Class 4 application seeking declarations in relation to the meaning of certain conditions and alternatively that certain development consent conditions were invalid. Whether such an argument would be successful in this case is not before me for decision as the Applicants have not sought to have any of the consent conditions declared invalid. In the absence of a declaration of invalidity of the conditions in question or the amounts payable under them, this argument is simply not maintainable.

120. Accordingly, the declarations and orders sought by the Applicants in relation to overpayment will not be made.

(ii) Does the Court have power or jurisdiction to award "damages" for breach of the provisions of s 94 in relation to overpayment? 121. The Applicants are arguing, as an alternative to the claim for a refund of overpayments, that there has been a breach of the EP&A Act and the Applicants are entitled to damages. For the reason stated in par 119 I have found the Applicants cannot maintain their claim for overpayment. Their claim for damages in relation to overpayment must also fail as the Applicants did not put forward any argument to demonstrate that the Court has jurisdiction in circumstances where their primary argument has been dismissed, because it has not been shown there has been a breach of s 94 of the EP&A Act.

122. Nor do I think it is sufficient to found a damages claim to rely simply on N & S Oliveri Pty Ltd v Fairfield City Council [2002] NSWLEC 35 as the Applicants did with no elaboration whatsoever as to how liability might arise in this case. Concluding remarks
123. In this judgment I have considered the Applicants' claim in relation to roadworks. I do not intend to make any of the declarations or orders in relation to roadworks sought by the Applicants. The overall claim also relates to s 94 contributions paid for open space and community facilities. The Applicants may wish to consider this judgment to see if they have any argument open to them in relation to those two areas. The only possible legal claim in relation to which the Applicants could bring forward evidence is "abandonment" of works not done pursuant to the 1993 Contributions Plan. There are significant evidentiary hurdles for the Applicants to overcome to mount a successful claim, based on the findings in this judgment.

124. Before this matter proceeds any further the issue of whether the Court should exercise its discretion in the Applicants' favour, assuming they could demonstrate there was a refund payable, needs to be considered. I will set out my preliminary thoughts in relation to roadworks noting that I have not heard argument on this matter from either party at this stage. It is important that the Applicants are aware of my preliminary view to consider whether they wish to take matters further.

Discretion to apply s 124 of the EP&A Act 125. It is worthwhile given the length and complexity of these proceedings to provide my preliminary view on whether, had I found that a "refund" ought to be made by the Council to the Applicants in relation to roadworks, I would have awarded a refund on discretionary grounds.

126. The Court has broad discretion to consider whether or not to make orders for relief under s 124. That broad discretion is well recognised: see Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335. The Applicants have sold off the 320 subdivision lots in issue to various parties and no longer have an interest in the land. The precise dates of sale were not provided to the Court but submissions from the Applicants' counsel suggested sales took place from 1996 with completion of sales during 1999/2000. These proceedings were commenced on 8 November 2000.

127. Pearlman J in Toadalla at 266 relied on Bignold J in Progress & Securities Pty Ltd v North Sydney Municipal Council (1988) 66 LGRA 236 where he refused relief because the applicant sought to be relieved of the burden created by the imposition of a condition, yet it had accepted the benefit of the development consent. In Toadalla relief was also refused for the same reason although her Honour found that the challenged development consent conditions were invalid. The Applicants have not sought declarations of invalidity of the development consent conditions in this case but rather have argued that there has been a breach of s 94(3) of the EP&A Act. Nevertheless I consider the same discretionary considerations ought to apply in this case.

128. Once the developer of a subdivision sells the lots it is undesirable that it seek refund of s 94 contributions from a Council after the sale, when it has had the benefit of the development consents granted by the Council. This situation is compounded when this occurs many years after the development consents were issued by a council. Accordingly, had I found a breach of s 94(3) and ordered a refund I am unlikely to have exercised my discretion in favour of awarding a refund to the Applicants.

Orders 129. I will make no formal orders at this stage. The Applicants should consider this judgment for a set period and then advise the Court of whether or not they wish to pursue the matter any further. If the matter is to proceed further the first issue about which I will require argument is in relation to the exercise of the Court's discretion. The issue of costs in relation to this part of the proceedings will also need to be dealt with in due course.

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