Lake Macquarie City Council v Hammersmith Management Pty Limited

The application by the Land and Environment Court of the Newbury test to s 94 of the Act was confirmed by this Court (Beazley JA, Priestley and Sheller JJA agreeing) in Russo & Ors v Burwood Municipal Council , Court of Appeal, 25 November 1996 (unreported). 53 The third Newbury test is a restatement of the test of reasonableness in the special sense expressed by Lord Greene MR in Associated Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 at 229. It is a test going to the validity of a condition and is not to be confused with the merit requirement of reasonableness mandated by s 94(2). 54 So far as the first Newbury test is concerned, it would generally be satisfied if one or other of the limbs of the statutory phrase was satisfied. The same comment applies (at least in most cases) to the second Newbury test. As was submitted by the Council during argument, the reference in the statutory phrase to "public amenities and public services" is in general terms and not directed to any particular public amenity or public service. In other words, it refers to a type of amenity or service rather than a particular amenity or service. Thus, in Peterson the statutory phrase was satisfied because the development generated a need (in that it increased the demand) for the provision of an off-street car park. The only question in that case related to the particular off-street car park in respect of which the monetary contribution was sought. It was in that context that the second Newbury test became relevant. 55 The type of public amenity relevant to the present case is that of a conservation corridor. Therefore, the relevant question was whether the primary judge was satisfied that Hammersmith's development was or was likely to increase the demand for such a corridor. If not, the enquiry needed go no further. If it did, then a second question would have arisen as to whether a condition requiring payment of a monetary contribution towards the acquisition of the particular corridor "fairly and reasonably" related to that development. It is only at that point of the enquiry that the question whether the development would be benefited by the corridor would become relevant. 56 The foregoing analysis finds support in the later decision of Stein J in Stockland (Constructors) Pty Limited v Shellharbour Council, 24 April 1996 (unreported). The issue in that case was whether Council administrative offices and a technical services depot (in respect of which the monetary contribution was sought) constituted a "public service" or a "public amenity". His Honour held that they did, provided they were operated for the benefit of the public. However, in the course of his judgment he said (at 4): "A broad construction of the statutory phrase 'public amenities and public services' should not be a matter of concern because of the extensive accountability provisions built into the Act. For example, a development needs to be likely to result in an increase in the demand for public services or amenities (s 94(1)) to qualify for a contribution. The contribution, of course, has to be a reasonable one for the provision, extension or augmentation of the public services or amenities (s 94(2)). A contribution must also satisfy the Newbury tests of validity: · be for a planning purpose · fairly and reasonably relate to the development (the nexus test) · be reasonable." (emphasis added) 57 It is apparent from the above passage that his Honour considered that before a monetary contribution for a public amenity or service could be extracted from a developer, three conditions had to be satisfied. The first was compliance with the statutory phrase. The second was the reasonableness of the contribution. The third was the satisfaction of the Newbury tests. It is noteworthy that his Honour refers to the second test as "the nexus test". 58 There is no reason to think that Stein J's approach in Peterson was intended to be any different to that which he later adopted in Stockland. There was no issue in Peterson with respect to the first two conditions outlined above. It was only the third condition, the second Newbury test in particular, that was in issue. 59 If the Council's submission is correct, then it follows that the statutory phrase need not be addressed, as it adds nothing to the Newbury tests. Provided that the condition purports to be imposed pursuant to s 94(1) and satisfies the Newbury tests (the second in particular), the condition may be validly imposed. In my opinion, such a construction of s 94(1) cannot be accepted. As Hammersmith submitted, the rationale in s 80A(1)(h) of the Act empowering the imposition of a condition if "it is authorised to be imposed under…s 94…" is that conditions which mandate the payment of money or the dedication of land free of cost are, and should be, the subject of more onerous requirements for their validity than conditions which do not have that effect. 60 In my opinion, it follows from the foregoing that the primary judge did not err when he held in [30] of his judgment that s 94(1) was not satisfied merely because the "residents of the proposed subdivision may conveniently make use of the conservation corridor". 61 The final aspect to be dealt with in relation the fourth proposition arises from the primary judge's finding, when considering the validity of the contributions plan, that the fact that persons within the release area would derive some benefit from or make use of the conservation corridor, provided the necessary nexus between the corridor and development within the surrounding area. The Council submitted that such a finding was inconsistent with his Honour's later finding that the development of Hammersmith's land would not generate a need for the corridor for the purposes of s 94(1). 62 It is apparent from the primary judge's reasoning on the contribution plan issue that he considered the question to depend, at least in part, on there being the "necessary nexus" between the conservation corridor to which the plan referred and the development proposed for the release area, that nexus being satisfied by the fact that the future population of the release area would derive some benefit from or make some use of the corridor. His finding went no further than that, although it would, in all probability, have resulted in the satisfaction of the second Newbury test (the "nexus test" as Stein J referred to it in Stockland) when applied to the condition under appeal. 63 The Council referred in its submissions to clause 27(1)(c) of the Environmental Planning & Assessment Regulation 2000, which provides as follows: "(1) The contribution plan must include particulars of the following: ….. (c) the relationship between the expected types of development in the area and the demand for additional public amenities and services to meet that development." 64 No doubt the passage from section 6.2 of the contributions plan referred to in [7] above would satisfy the requirement of that sub-clause of the regulation. It is not apparent that any non-compliance with the provisions of that sub-clause expressly constituted a basis for the challenge by Hammersmith to the lawfulness of the contributions plan. However, one of the two reasons for that challenge identified by the primary judge in [23] of his judgment was that: "There was and is no nexus between the conservation corridor and the development within the Northlakes Urban Release Area which will not and is not likely to require the provision or increase the demand for such corridor." 65 The primary judge seems to have answered the first part of the question so tendered by Hammersmith in the affirmative, holding that the derivation of benefit from the conservation corridor by future residents within the release area "provides the necessary nexus between the corridor and development within the surrounding area". However, I do not believe that his Honour's finding, sufficient though it may have been to the issue of validity of the contributions plan, can be converted (as the Council seeks to do) into a finding that development within the release area will or is likely to require the provision of or increase the demand for the conservation corridor. The primary judge addressed that question specifically when considering the Class 1 appeal and answered it in the negative. I have rejected the Council's submission that Peterson is authority for the proposition that the statutory phrase is satisfied by a "nexus" arising from a prediction that future development in the release area will be benefited by the conservation corridor. It follows therefore that there is no inconsistency between the primary judge's findings which support the validity of the contributions plan on the one hand and his finding of invalidity of the specific condition proposed pursuant to s 94(1) on the other. Accordingly, there was no error by his Honour in this regard. 66 For the sake of completeness, I should refer to a submission by the Council that, although the primary judge accepted the evidence of Mr Sanders that the need for conservation of the land in the corridor arose from its intrinsic characteristics and not by reason of the proposed development, nonetheless the corridor had instrumental or utilitarian value which justified its conservation. It was said that this value would generate the provision of or increase the demand by the development for the facility. 67 Although the Council referred to some evidence of a Mr Murray and Associate Professor Adam that might have supported such a submission, there is no indication that the primary judge accepted that evidence or that he was prepared to infer from it an affirmative answer to the two questions posed by the statutory phrase. Any error in failing to do so (if there is one) could not, in my opinion, give rise to a question of law and would involve no more than an error of fact: see Randwick Municipal Council v Manousaki (1988) 66 LGERA 330 at 333 where Clarke JA (with whom Hope and McHugh JJA agreed), held that even perverse or unreasonable findings of fact do not constitute errors of law.