The decision of the responsible authority is varied. In accordance with section 85(1)(e) of the Planning and Environment Act 1987 the Tribunal directs that permit 5.2005.598.1 must contain the conditions set out in the permit issued by the responsible authority on 12 October, 2005 with the following modifications:-

Condition 11 must be deleted from the permit and the subsequent condition renumbered.

The responsible authority is directed to issue a modified permit in accordance with this order.

1 This is an application to review a condition placed on a permit issued by the responsible authority for the subdivision of a building comprising ten dwellings at 32 Loller Street, Brighton into ten lots. The condition in dispute is :

Prior to a Statement of Compliance being issued by the Responsible Authority, the owner shall pay to council a sum equivalent to three percent (3%) of the site value of all the land within the subdivision. This amount may be varied in accordance with Section 19 of the Subdivision Act.

2 The application for review was made on the grounds that the open space contribution ought be applied only to the four lots in the subdivision which relate to the additional dwellings constructed in accordance with a permit issued in 2004, and that because the other six lots relate to dwellings constructed prior to 30 October, 1989, no open space contribution ought to be applied to those lots.

3 At the commencement of the hearing Mr Tweedie advised that he would be submitting that no contribution can be required for this subdivision under the provisions of the Subdivision Act 1988, or in the alternative any contribution should only be calculated on the basis of the four additional dwellings.

4 Pursuant to Section 66 of Schedule 1 of the Victorian Civil and Administrative Tribunal Act 1998 both parties agreed to the Tribunal as presently constituted determining a question of law arising in the proceeding.

5 The subject site is located within an established residential area on the south east side of Loller Street, Brighton. An older style, double storey, medium density housing development comprising six dwellings was constructed on the site in approximately 1938. In 2004 the Council issued a permit (No. 5.2003.824.1) to increase the number of dwellings from six to ten, with a reconfiguration and substantial upgrade of the existing six dwellings forming part of the development approved under that permit.

6 The permit issued by the Council in 2004 has been acted upon, the development has been completed and a certificate of occupancy issued for the ten dwellings. Private open space for each of the dwellings is provided by way of courtyards of between 15m2 and 47 m2 for the ground level dwellings, and balconies for the upper level dwellings.

7 An application for a permit for a ten lot subdivision was submitted to the Council in July 2005 and a permit issued in September 2005. The permit contained the condition which is the subject of this review. I was advised that the permit applicant made representations to the Council with respect to the imposition of a condition requiring an open space contribution, to the effect that any contribution ought to be limited to the four additional dwellings and should not be applied to the existing six dwellings. I was further advised that the Council considered the applicant's request and resolved that the contribution ought to apply all ten dwellings but that in recognition of the pre-existing dwellings the contribution would be reduced from 5% to 3%.

8 The review site is zoned Residential 1 under the Bayside Planning Scheme. A permit is required to subdivide land pursuant to Clause 32.01-2.

9 Clause 52.01 of the planning scheme relates specifically to public open space contributions and subdivision. This clause requires a person who proposes to subdivide land to make a contribution to the council for public open space in an amount specified in the schedule to the clause. If no amount is specified, a contribution for public open space may still be required under Section 18 of the Subdivision Act 1988. Circumstances under which subdivisions are exempt from the making of public open space contributions are specified in clause 52.01. These include, inter alia, the subdivision of a building used for residential purposes provided each lot contains part of the building and the building had been constructed or used for residential purposes before 30 October 1989.

10 No amount is specified in the schedule to clause 52.01 of the Bayside Planning Scheme. Section 18 of the Subdivision Act 1988 is therefore the relevant provision under which the responsible authority may require an open space contribution. Section 18 (1) states that if a requirement for public open space is not specified in the planning scheme, a responsible authority or a referral authority may require the applicant who proposes to create any additional separately disposable parcel of land, to provide public open space by either setting aside a percentage of the land not exceeding 5%, paying a percentage not exceeding 5% of the site value of the land, or a combination of the two methods so that the total of the percentages required does not exceed 5 per cent of the site value of all the land in the subdivision.

11 The tests to be applied in determining whether an open space contribution ought to be made and what the quantum of the contribution ought to be are set out in Section 18(1A) of the Subdivision Act:

(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.

12 The applicable policy framework as it relates to the subdivision of land generally and to the provision of public open space in particular is contained in clause 19.01 of the State Planning Policy Framework of the planning scheme, and at Clause 21.11 of the Municipal Strategic Statement (MSS). Clause 19.01 establishes the objective of controlling the subdivision and consolidation of land through planning schemes, within the framework of the Planning and Environment Act 1987 and the Subdivision Act 1988. Under the heading General implementation it is stated that planning schemes should enable the referral of applications, the removal or variation of easements and restrictions and the adjustment of boundaries, and also significantly, the placing of open space requirements on development proposals (my emphasis). This policy is of course consistent with and gives effect to Section 4(2) of the P_lanning and Environment Act 1987_ which states that one of the objectives of the planning framework in Victoria is:

(b) to establish a system of planning schemes based on municipal districts to be the principal way of setting out objectives, policies and controls for the use, development and protection of land;

13 Clause 21.11 of the MSS provides an overview of the open space resources available within the municipality and the key issues confronting the council in managing those resources. In broad terms these issues relate to resolving conflicting demands between passive and active recreation users, protecting the natural environment and vegetation cover in bushland and foreshore areas, the changing needs of residents resulting from an ageing population structure, the need to change the emphasis in open space provision from quantity to quality and the need to improve linkages between open spaces.

14 The Bayside City Council Open Space Strategy, November 1996 is one of five reference documents cited in Clause 21.11.

15 The fact that a dispute exists in this matter about whether a public open space contribution can or ought to be required, and if so, what that contribution ought to be, arises from the failure of the council to amend its planning scheme to include requirements in the Schedule to Clause 52.01. By incorporating such requirements into the planning scheme, a contribution to the council for public open space in an amount specified in the schedule to the clause is mandatory[1]. Having regard to the objectives of the planning framework in Victoria in Section 4(2) of the P_lanning and Environment Act 1987_ and Clause 19.01 of the State Planning Policy Framework of the planning scheme, the Schedule to Clause 52.01 is intended to be the appropriate mechanism through which councils are able to place open space requirements on development proposals.

16 The opportunity to incorporate open space contribution requirements into planning schemes arose through the introduction of VPP format planning schemes in the mid 1990's and was intended to provide a straight forward mechanism through which councils would be able to specify their requirements without having to negotiate the otherwise complex provisions of Section 18 of the Subdivision Act 1988[2] on every subdivision application made to the Council.

17 There are considerable benefits to be gained through the incorporation of open space requirements into the Schedule, not the least of which is that it provides transparency and certainty for both the applicant and the council about what the open space contribution for a development will be. It also ensures that the council is able to secure a contribution where an existing building is being subdivided, subject to the exemptions contained in clause 52.01. Admittedly under Section 18 of the Subdivision Act 1988 there is a high degree of flexibility and discretion available about whether a contribution ought to be made and what that contribution ought to be, and that discretion will be lost where open space requirements are incorporated into the schedule to Clause 52.01, unless of course a discretion is built into the schedule. I suspect however that the time and cost associated with disputes about open space contributions are quite considerable not only to the Council but also to the applicant. These costs need to be taken into account by a council when it determines whether it wishes to retain the flexibility available under the Subdivision Act 1988, or whether it wishes to achieve a greater degree of certainty in these matters. The costs and delays associated with such disputes can be avoided where the Council is prepared to undertake the necessary strategic work in the first place, to justify an amendment to the Scheme and the incorporation of its requirements into Clause 52.01.

18 Notwithstanding the benefits of incorporating its requirements into the schedule to Clause 52.01, this Council for reasons best known to itself, has not pursued that course of action. Ms Bowden informed me that it is the council's intention to amend clause 52.01 but as Mr Tweedie correctly pointed out, the council's open space strategy is now ten years old and it has had ample opportunity to do the work necessary to amend its planning scheme.

19 Because there is no amount specified in the schedule to Clause 52.01, the power to impose a requirement to make an open space contribution derives from section 18 of the Subdivision Act 1988 and under the provisions of that Act, such a requirement can only be imposed where the council, and on review of a council decision, the Tribunal, is satisfied that as a result of the subdivision there will be a need for more open space.

20 It was Mr Tweedie's submission that there is no evidence before the Tribunal that establishes the approval of this subdivision has resulted in a need for more open space. Mr Tweedie went further and submitted that not only is there no evidence that the Council has any intention to acquire more open space but that the evidence which is available establishes that the contrary is the case, and that the council's intentions are limited to carrying out maintenance on or making improvements to existing open space. Mr Tweedie relied on Clause 21.11 of the MSS and on the council's open space strategy in support of his submission. Mr Tweedie referred me to the findings of that strategy document (at page 16 part 1) where a summary of the municipality's open space resources is provided and it is concluded that there is an adequate amount of open space with an adequate range of facilities to meet the needs of the community.

21 Mr Tweedie further submitted that while open space contributions do not necessarily need to be used for the acquisition of new open space and may be used for capital works/improvements to existing open spaces in accordance with the principles established by the decision of the Tribunal in Peter Herbert and Associates Pty Ltd v City of Stonnington 17 AATR 31, (the Herbert case) the test that more open space is needed must still be met before a contribution can be sought.

22 I am not persuaded by Mr Tweedie's submission on this point. A reading of the decision in the Herbert case indicates to me that the analysis in that decision proceeded on the basis that any distinction between whether more open space is needed or whether existing open space is in need of improvements, is more arbitrary than anything else. In my view it is reasonable for the council to carry out an assessment of whether a subdivision generates a need for more open space and whether it generates a need for improvements of existing open space, in determining whether a contribution ought to be made.

23 In the circumstances of this case however, my conclusions on this point are not fatal to the applicant's submission that no contribution ought to be imposed, because the council has not demonstrated to my satisfaction that there will be a need for more open space, or improvements to existing open space, as a result of this subdivision.

24 Mr Tweedie acknowledged that while it may reasonably be concluded that the addition of four dwellings might cause a marginal intensification of the use of public open space, this arises out of the construction of the four additional dwellings and not the approval of the subdivision. This is clearly the case. There are currently ten dwellings on the site (six of which were constructed in the 1930's and four which were constructed in accordance with a permit issued in 2004) and the subdivision makes no difference to that and it cannot therefore be concluded that the subdivision makes any contribution to the need for more open space. My findings in this respect are consistent with those of Morris J in J Palenkas v Whitehorse CC (2003) VPR 15 237, a case in which His Honour considered the merits of a permit condition requiring a public open space contribution be made in respect of an application to subdivide two dwellings on a lot. His Honour concluded in that case as follows:

However the existence of a power and a discretion does not mean that it ought to be exercised so as to make such a requirement. Indeed under section 18(1A) there is a limit on the exercise of that discretion and that limit is in the form that it is necessary for the tribunal hearing this matter on appeal from the council to be satisfied that, as a result of the subdivision, there will be a need for more open space. Given that there are already two dwellings on the land, and there have been for two dwellings for over 50 years, I cannot see how the subdivision will have the result that there will be a need for more open space. Open space not only means hectares of open space, but also the quality of the open space.

But we have two dwellings on the land and the subdivision will make no difference to that. By facilitating the opportunity for the two existing dwellings to be on separate titles, it cannot be said that the subdivision will result in there being a need for more open space.

25 The council's submission that a need for more open space did exist as a result of the subdivision was based on little more than a reference to extracts from budget papers which indicate that, unsurprisingly, the council has allocated funds to the maintenance of and improvements to existing facilities, and that based on the scale which was previously included in Vic Code 2 (a document which was replaced by the Good Design Guide in 1995 and which has in turn been replaced by the Rescode provisions found in Clause 55 of the planning scheme, neither of which contain the scale relied on by the council) a 5% contribution is required for a subdivision of 6 lots or more. The Council submitted that it was being generous in reducing the contribution to 3%.

26 I do not find these submissions to be persuasive. The council did not refer me to or seek to rely on its open space strategy and it is of some concern that in response to a question from myself, I was advised that the council did not have an open space strategy.

27 The Council also referred me to a number of decisions of the Tribunal in which conditions imposing open space contributions on permits for the subdivision of residential developments in the City of Bayside have been upheld, although the contribution required by the council was invariably reduced[3].

28 My perusal of those decisions indicates that the issues canvassed in this case were not raised by the parties in those decisions, except in Dragicevic v Bayside CC unreported No_._ 2000/072944, 13 February 2001. In that case Member Komesaroff found that the subdivision is the "...totality of the permissions sought and cannot be confined to this subsequent subdivision permit only." Member Komesaroff concluded that by looking at the subdivision as a whole, rather than just lines on the page, a need for more open space can be substantiated.

29 I note that the decision in Dragicevic, predates the decision of Morris J in J Palenkas v Whitehorse CC, to which I have referred previously, and upon which I rely.

30 Having regard to my findings on this point, the question arises as to whether an open space contribution can ever be required where a residential development is constructed but not subdivided until after the development has been completed and occupied. This question is especially pertinent given that there is no opportunity to require an open space contribution other than in relation to a subdivision[4].

31 The short answer to that question is that an open space contribution can be imposed in accordance with the schedule to clause 52.01, unless of course the building was constructed before October 30 1989 in which case the exemptions in that clause apply and a contribution cannot be required. For the reasons I have outlined previously it is my view that the Schedule to Clause 52.01 is the appropriate mechanism through which Councils are able to place open space requirements on development proposals, and where a council has not incorporated its requirements into the Schedule, it is I think very difficult to substantiate the imposition of such a requirement on a permit authorising the subdivision of an existing development.

32 It follows from the above reasons that it is my conclusion that the decision of the responsible authority should be varied by deleting the condition requiring a public open space contribution.

[1] Refer to the decision of Morris J in Grochowski v Glen Eira CC VCAT Reference No. P302/2004, April 2004.

[2] For a discussion of the background to the public open space contribution provisions of the Subdivision Act 1988 and also the background to the introduction of clause 52.01 via the VPP format planning schemes, refer to the decision of Morris J in J Palenkas v Whitehorse CC (2003) VPR 15 237.

[3] CK Development Pty Ltd v City of Bayside No. 2000/51490, Bardoel Homes Pty Ltd v Bayside CC No. 2000/0622463, Dragicevic v Bayside CC No. 2000/072944, Rylands of Brighton v Bayside CC No. P51864/2001, Hellier McFarland v Bayside CC No. P2369/2003, Parsons & Associates v Bayside CC No. P417/2004, Brian Moxham Surveying v Bayside CC No. P810/2005.

[4] Refer to the decision of Morris J in Hand v Warnambool CC [2004] VCAT 19. In that case His Honour found that a condition requiring an open space contribution imposed on a permit for the construction of 15 dwellings was beyond the power of the responsible authority.