Hill v Blacktown City Council and the Minister administering the EPA Act 1979, Pluijmers and Anor v Blacktown City Council and the Minister administering the EPA Act 1979

Hill v Blacktown City Council and the Minister administering the EPA Act 1979, Pluijmers and Anor v Blacktown City Council and the Minister administering the EPA Act 1979 - [2008] NSWLEC 203 - NSWLEC 2008 case summary — Zoe

[20]

(a) The landowner and his or her heirs, successors or assigns shall be bound by the terms of the Deed; (b) The landowner shall be obliged to obtain a copy of the Deed signed by each party and provide the same to any proposed purchaser, mortgagee or any other person taking an interest in the land prior to any transfer, mortgage or creation of any other interest in the Land; (c) That the Deed will cease to have effect if: (1) This development consent lapses under s 95 of the Environmental Planning and Assessment Act 1979 (or equivalent); (2) The land is acquired for a purpose other than a purpose specified in the State Environmental Planning Policy (Sydney Growth Centres) 2006 (or equivalent); (3) The land is not acquired within twenty five years from the date of execution; (d) Upon acquisition of the land, the parties agree that compensation payable by the Department under the Land Acquisition (Just Terms Compensation) Act 1991 (or equivalent) shall be agreed to be assessed in accordance with the following formula (with each term used to have the meaning given in the Land Acquisition (Just Terms Compensation) Act 1991): 'Compensation' (for the purposes of that word wherever appearing in the Act as capable of being "agreed") is agreed to comprised of (1) + (2) + (3), as follows: (1) Market value of the land as at the date of acquisition excluding the value of any improvements on the land; (2) Market value of improvements on the land as they existed prior to the entering into of the Deed ("The 2008 improvements"); (3) Disturbance -excluding disturbance that only arises as a direct and natural consequence of the improvements the subject of this consent, but including disturbance which would likely have been incurred had the 2008 improvements remained on the land; (e) The manner in which the market value of the 2008 improvements to be used in the assessment described in (d) above can or shall be agreed (f) For the release of the Department from any claim arising under the Land Acquisition (Just Terms Compensation) Act 1991 for compensation except as provided for in the Deed. 15 Section 63 of the Land Acquisition (Just Terms Compensation) Act 1991 (the JT Act) referred to in the proposed deed in the previous paragraph provides that parties may reach agreement on the amount of compensation to which the owner will be entitled if land is acquired by compulsory process within a time specified in the agreement.

[21]

Minister's evidence 16 Mr Hurst, valuer, analysed the impact on market value of improvements, being a new dwelling, over a 5-25 year period. His analysis suggested there was no impact on market value after 25 years (which is the term identified in the proposed deed par 14) owing to the depreciation of any improvement such as a new dwelling over that time frame. 17 Mr McKenzie, town planner, gave evidence about the planning implications of not imposing condition 46 (Hill) or condition 15 (Plujimers) given the requirement to consider cl 14(2)(c) of the SEPP. He considered the increased cost of acquisition is a relevant planning consideration and was a determinative matter if not appropriately addressed by a relevant condition of consent. The additional cost is a matter that must be considered under cl 14(2)(c). The proposed condition is a responsible response to protect the public authority from paying higher acquisition costs as a result of granting concurrence to the grant of development consent. There is potential for additional costs to arise in the future when acquisition occurs at an undetermined date. The additional cost to the public authority resulting from the carrying out of the proposed development is an important public interest matter as the grant of consent without a condition limiting cost to the public authority will potentially have a detrimental impact on the public authority's ability to acquire the land. 18 The Applicant's solicitor cross-examined him as to whether he had any instructions concerning cl 14(2)(a) in relation to the need to develop the land. He did not have any instructions on that matter. He agreed there was no particular biodiversity identified on the Hill land. He agreed that most of the land in the zone was in private ownership. When he considered public interest he did consider the interests of the private owners in the zone. When he weighed these up he gave more weight to the Minister in light of the zone objectives and the need for the Minister to acquire the land. If a consent is issued without the condition sought then the Minister will have to pay the value of the new dwelling on acquisition. If the Minister considered he would acquire the land in a short time frame it is likely concurrence would be refused.

[22]

Submissions 19 The Minister argued that as a matter of discretion the Court would refuse the modification application as the Applicant has failed to demonstrate any material change in circumstance since this Court granted the development consent and reviewed the specific condition the subject of the present application, relying on Walton v Blacktown City Council [2006] NSWLEC 451 at [64]. The condition is for a planning purpose and satisfies the Newbury test (see Newbury District Council v Secretary of State for the Environment [1981] AC 578), as found by Jagot J in Hill v Blacktown at [42]. 20 That new information is available which was not put before the Commissioner in relation to the Applicant obtaining a mortgage to finance the development for which he has consent does not mean these are new circumstances in the context these were considered in Walton. There is no suggestion that the Applicant's financial position has altered in any material way since the decision of Bly C. Nor are there any other material changes in circumstances. While the Minister has made a specific admission that there is no present plan to acquire the land, Bly C's decision was made on the basis that acquisition was not imminent in any event. 21 In addition, whether or not the Applicant is able to afford the development for which he has consent is not a relevant matter to consider in the public interest under s 79C. Individual economic impact of the development consent on the applicant for development is not a relevant matter under s 79C, relying on Patra Holdings Pty Ltd v Minister for Land and Water Conservation (2002) 119 LGERA 231 per Pearlman J at [15] and Randall Pty Ltd v Willoughby City Council [2005] NSWCA 205. 22 Precedent is an important issue in this case because the application before Bly C was one of the first development applications made since the SEPP was created in 2006. If consent is granted without the condition sought by the Minister, the consent will be objectionable in that it will establish a negative precedent for subsequent consents which will seek to rely on the absence of such a condition to oppose the Minister granting concurrence subject to the imposition of such a condition, see Goldin v Minister for Transport (2002) 121 LGERA 101 per Lloyd J at [28] and [34]. Apart from the two matters before me, the only other developments considered in the Marsden Park North area by the Court were two development applications for new dwellings considered by Tuor C (see Liberty Investments Pty Limited v Blacktown City Council [2008] NSWLEC 1153 and Liberty Investments Pty Limited v Blacktown City Council and Tringas v Blacktown City Council [2008] NSWLEC 1154). The Commissioner refused both applications on merit grounds.

[24]

Finding 24 Bly C gave development consent for the new dwelling on the basis that it was a replacement dwelling for one already in use. As part of his reasoning in the s 97 appeal, Bly C considered the test in cl 14(1)(a) of the Growth Centres SEPP was satisfied as the proposal could have been carried out under the LEP. He considered cl 14(1)(c) of the Growth Centres SEPP was also met in that the dwelling was not inconsistent with the aims of the policy and the objectives of the ECZ. In relation to the matters in cl 14(2) of the SEPP Bly C stated that the existing residential use would not cease until the land was acquired and acquisition was not imminent. The increase in the potential cost of the property in the event it is acquired was a relevant consideration and an important public interest consideration. He considered that if development consent was given and that resulted in increased cost in the future when the land was acquired, that consent should not be granted. He considered development consent should therefore be granted subject to, inter alia, condition 46. 25 In relation to possible precedent, Bly C considered that if the dwelling was to be replaced in circumstances where the site was to be improved and there is no financial disadvantage to the community, an inappropriate precedent was not set in this matter. That there be no financial disadvantage to the community as a result of the development was achieved by requiring the imposition of condition 46. It is clear from Bly C's decision that condition 46 was an important part of his reasoning in deciding to grant development consent. In light of cl 14 of the SEPP, which enables concurrence to be given to prohibited development in certain circumstances, it is not a condition which can be deleted from the development consent as a discrete issue. Further I agree with the submissions of the Minister that based on Walton, there are no material changes in circumstances which suggest that in this s 96AA appeal a condition imposed in the s 97 appeal ought be deleted for the same reasons as stated by Preston J at [64]. 26 I do not agree with the submission of the Applicant's solicitor that the fact that cl 115(1)(e) and cl 115(1)(f) of the EP&A Regulation do not refer to a change in material circumstances means that the considerations in Walton are not apposite. I am able to conclude on the basis of these matters that the alternative condition (par 14) ought be imposed. I consider that is more appropriate than the general wording of condition 46. 27 In response to other submissions made, firstly as to whether condition 46 has a planning purpose I note that in her decision on the s 56A appeal, Jagot J held that condition 46 satisfied the Newbury test, which includes that it was for a planning purpose, and was reasonable for a consent authority to impose. Apart from the submission made by the Applicant that the condition was not for a planning purpose, no other evidence or submission is made to support that submission. There is no basis to suggest I should not apply the finding of Jagot J that the condition satisfies a planning purpose. In any event, given (i) the aims and objectives of the Growth Centres SEPP identified in cl 2 (par 4), (ii) the fact that dwelling dwellings are now prohibited in the ECZ and (iii) the provisions of cl 14(2)(c), the condition clearly does have a planning purpose. 28 In relation to individual economic hardship caused to the Applicant, in Patra Holdings at [15] Pearlman J held that economic viability in the sense of profitability of a particular business cannot be relevant, relying on Kentucky Fried Chicken Pty Ltd v Gantidis (1979) 140 CLR 675 at 687. In Randall Basten JA (Giles and Santow JJA concurring) suggested that economic viability could be considered as a planning consideration under s 79C of the EP&A Act. He held at [36]: It remains, of course, to consider whether there is some inviolable constraint on the statutory concept, which has been contravened in the present case. At the point of greatest limitation, it may be argued that the economic impact of a proposal on the application for development consent may not be the kind of impact which should be considered. Nevertheless, as is illustrated by the judgment of Kerr LJ in R v Westminster City Council; Ex parte Monahan [1989] 3 WLR 408 at 425, quoted by Bignold J in City West at [139], the imposition of a condition may involve financial constraints on the economic viability of a particular development, which may be of significance in particular circumstances. At the very least, such a consideration will not necessarily fall outside the boundary of "planning" considerations sought to be identified by the Claimant .

[30]

Applicants' evidence 37 The Applicants relied on an affidavit of Mr Pluijmers sworn 15 May 2008 which set out when he purchased the property at 5 Barton Place, Marsden Park being April 2004. He had filed a development application for a dwelling on the land in 2005. This was delayed. He has made inquiries about obtaining a bank loan from St George Bank. A manager of the bank has told the Pluijmers that it would be unlikely that they would be able to obtain finance should the condition in question be imposed. Mr Pluijmers could not obtain a form of deed from the Council as referred to in the condition, but was provided with a copy of the deed between the Minister and Australian Conference Association Limited which was shown to the manager. The manager said that if the deed contained the restrictions sought to be imposed by the Minister, the bank would be unlikely to grant a loan. 38 The statement of Mr Falson, planner, dated 27 April 2007 was relied on. He was not cross-examined. He attaches a copy of a dilapidation report of Mr Simpson which states the existing dwelling is in a state of poor repair. It has been lived in for a number of years. Mr Falson refers to cl 14 of the SEPP and considered that there is not a demonstrated need to develop the land for environment and conservation at the present time and that acquisition is not imminent. He agrees that the increased cost of acquisition is a relevant planning consideration (cl 14(2)(c)) but cannot be considered in isolation from the other components of cl 14(2). He does not consider it is determinative as Mr McKenzie, planner, does. Given that acquisition is a long way off any increased cost of acquisition resulting from the development will be substantially reduced. Existing dwellings in the zone are limited so that replacement dwellings will be relatively few. The likely additional cost cannot be assessed as it is too vague and remote. He also argued the condition does not meet the Newbury test and is possibly in conflict with the JT Act. Both these opinions are contrary to the findings of Jagot J in Hill. 39 Mr Archer, mortgage broker, also made a statement about the basis on which a bank would make a loan for a new dwelling to be built. His view was that as long as the property is affected by the deed in question, no recognised lending institution would lend $400,000 to build a new dwelling and pay out the existing mortgage unless the vacant land value exceeded $500,000. His instructions were that the property was valued at $495,000 including improvements. If the deed in question did not apply, the Applicants would have no difficulty borrowing $460,000. He was cross-examined on assumptions made that the dwelling was $200,000 and agreed that the capacity for a loan would vary if a different amount was sought. If there was a deed in place the bank would consider the risk involved. If there was no value attributed to the proposed new dwelling it was unlikely that the bank would lend the amount sought. 40 Mr Woods, valuer, provided a valuation report. There was no need to refer to this in detail in the proceedings.

[31]

Submissions 41 The existing dwelling is recognised as having legal status under the Council's "Scheduled Lands" Interim Policy. This was emphasised as an important consideration and a reason why this matter is distinguishable from Hill. 42 The Applicants' counsel argued that the finding of Jagot J in Hill that the condition satisfied the Newbury test at [41]-[47] should not be followed. The first limb of Newbury, that the condition be for a planning purpose, is not met. It is designed solely for the benefit of the Minister and is based on an uncertain and distant possibility of acquisition in the future. Clause 14(2) of the SEPP should be weighed against the evidence in this case that there is no current plan to acquire the land, and that if acquired it will be in conjunction with land releases envisaged by the SEPP. The land is not needed as a conservation zone as a matter of priority and there is no evidence about timing of implementation apart from the timeframe of 25-30 years. It will not take place within the life of the development consent of two to five years. The land releases which trigger the need for the Applicants' land for conservation land may not take place together so that the increase in land value when acquisition occurs may be lost to the Applicants. The timing is completely in the control of the Minister and there is no evidence suggesting the acquisition is imminent. 43 The condition is unjust and unfair and is so unreasonable that no planning authority could have properly imposed it, based on Wednesbury (see Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223). 44 The condition circumvents the operation of the JT Act. Jagot J's finding that the condition in Hill was not inconsistent with the JT Act should also not be followed. While s 63 of the JT Act envisages that agreement on compensation matters can be reached (and is the section pursuant to which the deed proposed by the Minister is to be made) there is no agreement in this case. Rather the Minister is seeking to impose an agreement. 45 The operation of the condition is harsh and unjust for the Applicants and should be considered as a matter of public interest under s 79C(1)(g). These are issues which are likely to affect several members of the public being other land holders in the area. The objectives of the EP&A Act identified in s 5(a)(i) and (ii) were relied on. 46 The evidence of Mr Hurst is speculative. If there are land releases in the future, these will underlay an increase in the value of the Applicants' land with a consequent diminution in the impact of the cost of any improvements. Any cost to the Minister on acquisition as far into the future as 25-30 years will be minimal.

[32]

Finding 47 While the Applicants relied on the existing dwelling having legal status under the Scheduled Lands policy, given the provisions of the Growth Centres SEPP, this is not significant. Regardless of the legal status enjoyed by the dwelling before the SEPP was passed, new dwellings are prohibited unless concurrence is given under cl 14. The legal status was essentially undefined and was not argued, for example, on the basis of existing use rights. This is not a relevant factor in this merits assessment. 48 The Applicants have argued the decision of Jagot J in Hill should not be followed in relation to the Newbury test and in relation to inconsistency with the JT Act. Judicial comity suggests that the decision of a judge at first instance should be followed by another judge at first instance unless there are convincing grounds provided as to why the judge is wrong. The arguments put forward as to why Jagot J is wrong are not persuasive and do not really engage with the reasoning process of her Honour. There is nothing in her Honour's reasoning that suggests error. Accordingly, I consider that the alternative condition now proposed by the Minister meets the Newbury test and is for a planning purpose (as I also concluded in Hill at par 25). Further, in accordance with Jagot J's finding, the proposed condition does not give rise to inconsistency with the JT Act in light of s 63 of that Act. No authority was provided in relation to the Applicants' argument that there would not be a genuine agreement as referred to in s 63 because essentially the Applicants are being forced into the deed. The Applicants do not have to enter into the deed and take up the development consent so that I consider there is an agreement for the purposes of the JT Act. 49 Much of Mr Falson's affidavit gave opinion evidence which was contrary to findings made by Jagot J in Hill and was not therefore correct concerning legal issues relevant to this case. Further there is no evidence that the existing dwelling has existing use rights as he stated and consequently there is no legal basis to distinguish this matter from Hill, contrary to his affidavit at par 8. His interpretation of the operation of cl 14(1) and (2) is incorrect. He did not deal at all with the circumstance that the proposed dwelling is prohibited under the SEPP. 50 There was also an assumption in the Applicants' argument that because there is an existing dwelling which is sought to be replaced that there was a presumption this should be approved. That submission overlooks the legal position that a new dwelling, regardless of whether it replaces an existing one, is prohibited development under the SEPP. 51 Clause 14(2) identifies three matters which must be considered. They do not all need to be considered, "and" is not included at the end of each subclause. I agree with Mr McKenzie that the consideration under s 14(2)(c) can be determinative. The purpose of the SEPP is to provide for, inter alia, expansion of the growth centre areas which requires the acquisition of land for public purposes, including for environmental conservation. As part of that purpose the SEPP requires in cl 14(2)(c) that the likely additional cost to government be considered. Clause 14(2)(c) is clearly directed to taking into account the need to reduce the cost of land intended for acquisition for public purposes under the SEPP. It is an important planning matter that the costs of acquisition be minimised as that acquisition requires the use of public funds. 52 As held in Hill at par 28-29, economic hardship caused to the Applicants as a result of the imposition of the condition is not a relevant matter unless particular circumstances exist suggesting that it should be. While the Applicants' solicitor made a broad submission that the objects of the EP&A Act in s 5(a)(i) and (ii) support such an approach whether a development was economically viable for an individual could be taken into account in s 79C in relation to public interest is debatable. Section 5(a)(i) makes no reference to individuals but is directed to the community as a whole. Section 5(a)(ii) refers to the orderly and economic use of and development of land which supports the Minister's arguments in relation to the operation of the SEPP. 53 I must determine on the merits whether the alternative condition should be imposed as a condition of development consent. Limiting the compensation payable in the event of acquisition for 25 years so that the value of the new dwelling will not be part of that compensation is, I accept, difficult for the Applicants and may mean that they are not able to build the dwelling they have approval for based on their current financial situation. As the alternative condition proposed by the Minister clarifies, the other components of market value are otherwise not affected, particularly that of land value which is likely to be the significant component of market value. To reduce the timeframe for operation of the deed to be within the terms of the development consent, so that acquisition if within the life of the development consent of two to five years will not give rise to additional cost to the Minister, is not realistic in the timeframe for development of this area under the Growth Centres programme. As identified by Mr McKenzie if the acquisition programme was imminent, that is within two to five years, it is unlikely that concurrence for a new dwelling would be granted at all. 54 As identified in relation to Hill at par 30, precedent is a relevant consideration in this matter given that this is one of the first applications seeking development consent for a prohibited development under the Growth Centres SEPP. This suggests that imposing the condition sought is an important consideration and that without such a condition development consent ought be refused for what is otherwise prohibited development under the SEPP. 55 On balance I consider a condition in similar terms to the alternative condition proposed by the Minister should be imposed. A concern was raised by the Applicants' solicitor (as in Hill) about difficulty in finalising a deed with the Department. I will ask the parties if they wish to explore finalising the deed now as part of the proceedings. I also need to hear from the Applicants whether they agree to the condition being a deferred commencement condition.

At a glance

Court

Decision date

Before

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Judgment (33 paragraphs)

Cases Cited (9)

Cited By (2)