Kameel Pty Ltd v Casey City Council [2005] VSC 23

5. Section 114 is in the following terms:

(1) A responsible authority or any person may apply to the Tribunal for an enforcement order against any person specified in sub-section (3) if a use or development of land contravenes or has contravened, or, unless prevented by the enforcement order, will contravene this Act, a planning scheme, a condition of a permit or an agreement under section 173.

...

(3) An enforcement order may be made against one or more of the following persons -

(a) the owner of the land;

(b) the occupier of the land;

(c) any other person who has an interest in the land;

(d) any other person by whom or on whose behalf the use or development was, is being, or is to be carried out."

The background

12. The events which give rise to the appeals date back to 1997. At that time, the appellant, Kameel Pty Ltd, was the owner of a parcel of 13.8 hectares of land in Berwick, bordered on the east by Clyde Road and on the South by Greaves Road. The land was zoned residential normal under the Berwick Planning Scheme.

15. By 1997, part of this land had been disposed of so that the remaining portion comprised an area of 11.29 hectares fronting the same two roads. This is the land shown as Lot B on Plan of Subdivision 325389F and being the land being described in Certificate of Title Volume 10231 Folio 742.

18. In 1997, Kameel entered into negotiations with the then City of Berwick for a rezoning of its land. In the reasons for decision of the Tribunal it is said that the land the subject of this proposed rezoning was the southern portion of Lot B comprising 4.91 hectares[2]. Whether this be correct, the rezoning achieved by Amendment L115 to the Planning Scheme which introduced cl. 5203 to the scheme refers to the whole of Lot B. The incorporated document referred to in the schedule to the amending clause is the Site Specific Control - Berwick South dated April 1999. This document permits the land to be used for a comprehensively planned development subject to a number of requirements. I was not told what were previously the permitted uses for land in a residential normal zone other than that the level of commercial development which was permitted under the amendment would not then have been possible. Under cl. 1.2.2 of the incorporated document the following uses are allowed without permit: convenience shop, function centre, hotel, mechanical car wash, medical centre, motel, petrol station, restaurant, takeaway food premises and veterinary centre. Clause 1.2.1 allows the following uses subject to permit and subject to certain conditions: bottle shop, chemist shop/pharmacy/video. Clause 1.5 provides as follows:

"1.5 Prior to the development or use of the land being commenced, the owner must enter into an agreement with the responsible authority pursuant to Section 173 of the Planning and Environment Act 1987 providing for: * Road widening in Clyde Road and Greaves Road; * Contribution to traffic management works in Clyde Road and Greaves Road; and * A bicycle path along the Clyde Road frontages."

22. On 2 December 1997, Casey City Council and Kameel entered into an agreement pursuant to s. 173. The expressed purpose of the s. 173 agreement was to facilitate the adoption of amendment L115 and to formalise an understanding reached between the parties regarding the use and development of the subject land.[3] The subject land is defined in cl. 1.0 as being the land described as "Proposed Site Area 4.91 hectares on the plan attached to the Agreement as Schedule 1 being part of the Land in Certificate of Title Volume 10231 Folio 742 situated at and known as 248 Clyde Road, Berwick". The attached plan shows that the subject land is indeed an area of 4.91 hectares comprising the southern portion of Lot B. I shall refer to this portion of Lot B as "the subject land".

25. By cl. 4.1 of the s. 173 agreement, Kameel (which is there described as "Owner") entered into the following specific covenants with Casey City Council:

"4.1 Land Transfer for Road Widening It will subdivide the Subject Land and transfer to Council (without compensation and at the Owner's cost) the Road Widening Land within three months of the Approval Date or such further period as is reasonably necessary to achieve transfer of the Road Widening Land to Council. 4.2 Provision of Pedestrian/Bicycle Path It will: (i) carry out construct and Complete the works specified in clause 4.2.2 to the satisfaction of Council; or (ii) pay or agree to pay Council the cost of the works incurred. The cost of the works incurred for the purposes of this clause, shall be determined as follows: (a) the parties agree that a certificate signed by Council's chief executive officer or his nominee and accompanied by a statement from a qualified engineer or quantity surveyor verifying the cost of the works, shall be prima facie proof of the cost of those works; (b) the Owner has 14 days from the receipt of such a certificate within which to dispute this amount by notifying Council in writing that the amount is so disputed; and (c) in the event of a dispute as to the cost of the works, the matter is to be determined by a quantity surveyor appointed by agreement between the parties or in the absence of agreement by the President for the time being (or his nominee) of the Australia Institute of Quantity Surveyors of the National Surveyor's House, 27 Napier Close, Deakin, Australian Capital Territory and such decision shall be final and binding upon the parties. 4.2.2 It will construct and Complete a shared pedestrian/bicycle path along the entire eastern boundary of the Subject Land to the satisfaction of Council. The design of the pedestrian/bicycle path shall be to the normal design standards regularly used by Council with a minimum width of two and one half (2½) metres. 4.4 Access to the Subject Land 4.4.1 Prior to lodgement of development plans or a planning permit application for the Development, the Owner will submit a traffic report. This traffic report will include the estimated traffic generation from the Development, timing of the Development, traffic engineering analysis of all proposed access points and full details of the mitigating road works to be undertaken during each stage of the Development. 4.4.2 All vehicular access points to the Subject Land will be restricted to only points and designs which have been approved in writing by Council and the Roads Corporation. 4.4.3 It will construct traffic management works in accordance with the design approved by Council and the Roads Corporation, including (but not limited to) left turn deceleration lanes, protected right turn lanes, roundabouts, median strips or other works reasonably required by Council and the Roads Corporation for all approved access points to the site to the satisfaction of Council and the Roads Corporation. 4.5 Contribution Towards Upgrading of the Intersection of Clyde Road and Greaves/O'Shea Road 4.5.1 It will pay Council an amount of $23,400 as adjusted in accordance with clause 15 (`the Contribution') towards the upgrading of the intersection of Clyde Road and Greaves/O'Shea Roads upon the earlier of: (i) completion of construction of the upgrading of the intersection by Council; or (ii) three years from the Approval Date;"

30. The agreement provides in cl. 4.3 that the time within which the pedestrian/bicycle path is to be constructed[4] is not later than three years after the approval date, that is, by 21 April 2001. As appears in cl. 4.5, the payment of the $23,400 for the intersection upgrade was to be made by the same date.

33. The Planning Amendment L115 was duly made in April 1998. The development contemplated by the amendment took place pursuant to Planning Permit P515/98 issued on 31 December 1998 to Kameel. As a matter of interest, I note that the permit allows on Lot B a "varied density residential subdivision in accordance with endorsed plans" subject to 41 conditions. Condition 35 is in these terms:

"The owner of the land shall comply with all requirements as specified in the agreements made under Section 173 of the Planning and Environment Act 1987 executed on 11 August 1992 and 2 December 1997 respectively."

But no party relied upon this as a breached condition and I put this matter to one side.

38. The road widening land referred to in cl. 4.1 was transferred to the Casey City Council and the road works were carried out. The construction of the bottle shop and hotel was, however, not undertaken by Kameel. By contract of sale taking effect from 10 July 1998, Kameel sold to the secondnamed defendant, Hopin Pty Ltd, 1.557 hectares at the northwest corner of Greaves Road and Clyde Road. This land which is Lot C on a plan of subdivision 421774R was and is used by Hopin for the hotel.

41. Kameel constructed the pedestrian/bicycle path along the eastern border of the subject land as required by cl. 4.2 of the s. 173 agreement, but not along the border of Lot C which had been transferred to Hopin. It therefore breached cl. 4.2.

44. Kameel has also failed to pay the agreed contribution of $23,400 towards the intersection upgrade. I was told from the bar table that Kameel contends that it has made this payment but I proceed in these appeals on the finding of the Tribunal[5] that the payment had not been made, Kameel is in breach of cl. 4.5 of the s. 173 agreement.

47. Kameel is also in breach of its obligation under cl. 4.4 of the s. 173 agreement to pay for the traffic management works[6].

50. As a consequence of this, three proceedings were commenced in the Tribunal in 2001 and 2002:

Proceeding P50546/2001 was commenced by Casey City Council against Kameel on 4 July 2001. In this proceeding Casey City Council sought orders pursuant to s. 114 to enforce the three obligations under the s. 173 agreement which Kameel had breached. On 6 March 2003, enforcement orders were made by the Tribunal in the following terms:

"1. That the respondent comply within 90 days of the date of this order with the specific covenants in the Section 173 agreement between the Responsible Authority and the respondent dated 2 December 1997 as follows: 1.1 That the respondent carry out, construct and complete the works specified in Clause 4.2.2 of the Section 173 agreement, being the construction of a shared pedestrian/bicycle path along the entire eastern boundary of the subject land (as described in the Section 173 agreement) to the satisfaction of the Responsible Authority. 1.2 That the respondent construct traffic management works in accordance with the Clause 4.4.3 to the satisfaction of the Responsible Authority and VicRoads. 1.3 That the respondent pay the Responsible Authority the sum of $23,400 (as adjusted for CPI) towards the upgrading of the intersection of Clyde Road and Greaves/O'Shea Roads.

The proceeding against these orders is Proceeding No. 8879 of 2003.

Proceeding P51283/2001 was commenced in the Tribunal by Kameel against Hopin on 28 September 2001. In this proceeding Kameel sought against Hopin orders pursuant to s. 114 to enforce the same three obligations under the s. 173 agreement.

This agreement faced an immediate difficulty in that the agreement had not been registered on the title to the subject land pursuant to s. 181 so that Kameel was unable to avail itself of s. 182 which provided that, when registered, the burden of the covenants in the agreement runs with the land and, therefore, bind the transferee. The proceeding was dismissed on 6 March 2003.

The proceeding against this dismissal is Proceeding No. 8877 of 2003.

Proceeding P2547/2002 was commenced in the Tribunal by Kameel on 30 September 2002 seeking declarations including a declaration that Casey City Council was required to have the s. 173 agreement registered. This proceeding, too, was dismissed on 6 March 2003.

The proceeding against this dismissal is Proceeding No. 8878 of 2003.

64. The debate on this appeal concerns two, or perhaps three, points raised on behalf of Kameel in the Kameel Proceeding as to the meaning and effect of s. 114.

(1) Were the breaches by Kameel of the s. 173 agreement "uses or developments of land which contravened or may have contravened the s. 173 agreement" within the meaning of s. 114(1)?

(2) Was Kameel one of the persons against whom an enforcement order may be made under s. 114, having regard to s. 114(3)?

(3) Did the Tribunal err in making an enforcement order against Kameel which it is not possible to comply with?

70. Other matters were raised in the notice of appeal in the Kameel Proceeding, but these were not pressed. Likewise, the appeal in the Kameel Declarations Proceeding diminished in importance as the argument unfolded. The burden of the appeals, therefore, fell upon the three suggested errors of law which are summarised above.

74. The short point made on behalf of Kameel was that the payment or non-payment of a sum of money is not a use or development of land. It will be recalled that s. 114(1) operates only where "a use or development of land" contravenes a planning scheme, permit condition or s. 173 agreement. The argument, insofar as it concerned the non-completion of the bicycle/pedestrian path took this one step further - the failure to perform a positive covenant in a s. 173 agreement, whether it be a covenant to pay money or to do work, cannot be a "use or development of land".

77. It is necessary for this purpose[7] to identify what is this contravening use or development.

80. In paragraph 2 of its order, the Tribunal identified the use or development as follows[8]:

"The uses and development which contravene the s. 173 agreement are the uses or developments now occurring on the third parcel of land described in the schedule to clause 53.02 of Casey Planning Scheme and in particular the use and development constituted by the hotel complex on the northwest corner of Clyde Road and Greaves Road."

The third parcel of land referred to in this statement is the 11.29 hectares which I have referred to as Lot B. Since the s. 173 agreement is concerned only with a portion of that land, being 4.91 hectares which I have called the subject land, it may be supposed that the statement is intended to refer only to those uses or developments occurring on the subject land. The hotel complex is certainly on that portion, as are other permitted developments and uses.

85. The question as to the identification of the contravening use and development was the subject of much attention before and by the Tribunal. Counsel for Casey City Council conceded that the mere payment of money would not be a use or development of land[9]. It would follow that the failure to pay money, likewise, could not be a use or development. This concession was qualified, however, in the case where the money to be paid was to be earmarked for specific works, in the present case, for road widening. It was put, then, that the payment of money in such circumstances could be properly characterised as development, namely, the road widening works and that, likewise, the failure to carry out the works, consequent upon the non-payment of the money was also a development.

88. The Tribunal rejected this submission as well as the further submission part on behalf of Casey City Council that the non-construction of the path could be a development. The Tribunal concluded that the contravening use or development must be one that exists; not one that does not exist. Accordingly, the failure to construct the path could not constitute the use or development. Likewise, the failure to pay money which led to the non-performance of works. No party before me sought to challenge these conclusions.

91. The Tribunal also rejected the submission put on behalf of Casey City Council that paragraph 1.5 of the incorporated document[10]

, which obliges Kameel before the development or use is to commence to enter into the s. 173 agreement containing the three breached obligations, contains an implied term that the obligations to be undertaken in the s. 173 agreement be performed before the commencement of the development or use. This conclusion, likewise, was not challenged before me.

96. The conclusion of the Tribunal as to the point presently under consideration was that the requirements of the s.173 agreement were but one aspect of the permitted use and development which was the subdivision and construction of the hotel complex and of the other commercial and residential uses permitted under the amendment subject to certain terms. The development and the uses were permitted only where they were carried out in accordance with the provisions and conditions of the amended planning scheme including those in the s. 173 agreement which it required the developer to enter into. [11]

99. It was this conclusion which was attacked on behalf of Kameel. It was put that the s. 173 agreement is an agreement and enforceable in the courts like any agreement, but with two statutory characteristics: it may be registered on the title to the land to which it relates[12] with the consequence that the burden of any covenant runs with the land; and, second, it may be summarily enforced under s. 114. To this may be added a third, that it may be enforced by the responsible authority which would probably not have that power at law[13]; and a fourth, that the agreement may be amended with the approval of the Tribunal[14].

102. Thus far, the Kameel argument cannot be doubted. But the submission went further: the s. 173 agreement was, subject to the statutory characteristics, nothing more than a contract. This I do not accept. A s. 173 agreement plays an important role as one of a number of instruments available for achieving the objectives of planning in Victoria. In this regard I gratefully adopt the discussion by Morris J sitting as the President of VCAT in Solid Investments Australia Pty Ltd v Greater Geelong City Council[15]. The planning objectives of the Act are sought to be achieved by s. 173 agreement as, indeed, they are by permits granted under a planning scheme and by the scheme itself. They will also be effected by the statute itself. It follows that where a use or development is permitted, subject to terms contained in the scheme or in a permit granted under a scheme or in a s. 173 agreement, the use or development is a contravention where that term is not complied with for it is then not a permitted use. In short, the jurisdiction of the Tribunal under s. 114 is enlivened, not because a developer or user of land breaches a term in a s. 173 agreement, but because the use or development which is permitted subject to compliance with that term is thereby not permitted.

105. When s. 114(1) is understood in this way, the difficulties raised by Kameel disappear. The jurisdiction of the Tribunal does not depend upon the answer to the often difficult question whether a covenant in a s. 173 agreement is, in truth, a positive or a negative one. It depends rather upon the broader question whether the use or development of the subject land is unlawful in the sense that it contravenes one or other of the instruments of planning control under which it is permitted.

108. This jurisdictional issue is, of course, entirely different from the question which will then confront the Tribunal in the exercise of that jurisdiction: whether in the given case an enforcement order should be made.

111. I should add before leaving this point that this appears to have been the basis for the assumption of jurisdiction by the Tribunal to make an enforcement order to compel a developer to erect an acoustic fence in Jala Pty Ltd v Whittlesea City Council[16].

114. The first suggested error of law has not been made out.

118. By s. 114(3) an enforcement order may be made against one or more of the following persons:

(a) the owner of the land;

(b) the occupier of the land;

(c) any other person who has an interest in the land;

(d) any other person by whom or on whose behalf the use or development was, is being, or is to be carried out.

The Tribunal found that Kameel was a person by whom the development was carried out[17].

124. It was submitted on behalf of Kameel that it had subdivided the subject land by excising Lot C which it sold to Hopin in 1998 and that the development of the hotel complex was carried out by Hopin thereafter. Accordingly, it did not fall within s. 114(3).

127. I am not persuaded that the Tribunal fell into an error of law as suggested. First, as the Tribunal observed, the development included the subdivision and there is no doubt that Kameel carried that out. Furthermore, Kameel carried out the use and development on the whole of the subject land other than Lot C[18]. As a finding of fact this cannot be challenged. The Tribunal was therefore entitle to conclude as it did that Kameel fell within s. 114(3)(d).

130. Again I mention that we are here concerned with the power of the Tribunal to make an order and not with the further question whether the power should be exercised in a given way.

Whether an order should have been made against Kameel

137. The argument here moves to the area of the manner of exercise of the Tribunal of the power under s.114. The present point is concerned only with the exercise of that power where the Tribunal ordered Kameel to construct the pedestrian/bicycle path along the eastern boundary of Lot C which is owned by Hopin.

140. I am far from satisfied that this point is in fact directed to an error of law. If, however, it might be said that in making a coercive order of this kind the Tribunal should as a matter of law have regard to the enforceability of the order, there is here no evidence that compliance with the enforcement order is impossible, rather the contrary. The owners of the land on which the path is to be constructed - Hopin, insofar as the path runs over Lot C and Casey City Council, insofar as it runs over the road reserve, made it clear before me that they would cooperate with Kameel in its compliance with the enforcement order. In this regard the case again resembles Jula v Whittlesea City Council[19]. This ground, too, fails.

144. Council for Kameel sought before me to raise a fourth objection to the Tribunal order insofar as it ordered that Kameel construct the traffic management works in accordance with cl. 4.4.3 of the s. 173 agreement to the satisfaction of Casey City Council and VicRoads. It was said that this order was so imprecise as to be incapable of enforcement.

147. This point was not raised in the notices of appeal. I will not entertain it.

150. It will be recalled that a difficulty in this case arose because Casey City Council failed to register the s. 173 agreement over the subject land or over Lot B pursuant to s. 181. This would have rendered Hopin liable for compliance with the three obligations contained in that agreement, at least to the extent that these concerned land of which it was or had been owner or occupier. In the third application before the Tribunal, Kameel sought declarations including a declaration that Casey City Council was obliged to register the s. 173 agreement and orders that it do so. This application was dismissed.

153. In the appeals in the Kameel Proceeding and the Kameel Declarations Proceeding, Kameel seeks to raise as a question of law :

"Is the power contained in Section 181 Planning and Environment Act 1987 (the Act) to register on the Register of Titles an agreement made under Section 173 of the Act subject to the implied limitation that registration can occur only if the registration proprietor or owner for the time being of the land subject to the agreement consents to registration?"

157. I decline to deal with this matter. First, it is of no utility in the present case. Whatever answer was given would not take the matter before me further. Second, in a case where the statute is silent on such a matter I would be reluctant to provide an answer which might affect the practice of the Land Titles Office, at least without some assistance from the Registrar of Titles.

160. The remaining points - questions of law 1 and 2 in the Kameel Proceeding and questions of law 2 and 3 in the Kameel Declarations Proceeding were not pressed.

[1] All references to sections in this judgment are references to the Planning and Environment Act 1987 unless otherwise indicated.

[7] Also in order to satisfy the requirements of s. 119(a)(i)

[8] The paragraph, as it appears in the notices of appeal was subsequently corrected by the Tribunal to read as is here set out.

11] See cl. 1.0, definition of "development", and cl. 12.3

[12] Section 181

[13] Section 182(b)

[14] Section 184

[15] [2004] VCAT 2356 at [43]- [59]