//
© 2026 Zoe. All rights reserved.
Zoe is a legal information platform. Always consult the Federal Register of Legislation for authoritative text.
[2003] NSWCA 313
respondent. Appeal dismissed with costs. The primary judge’s order deleting the contribution condition was left undisturbed.
A council cannot impose a development contribution under s 94 merely because future residents might use or benefit from a public amenity. It must have a basis to conclude that the particular development will or is likely to require that kind of amenity or add to demand for it. The Court of Appeal found the primary judge applied that test, upheld the deletion of the contribution condition, and dismissed the Council’s appeal.
AI-generated legal information, not legal advice. Zoe can make mistakes. Check the cited source, and for advice about your situation consult a qualified Australian lawyer.
2,371 words · generated 01/10/2026
Lake Macquarie City Council appealed a Land and Environment Court decision concerning a monetary development contribution for acquiring the Cocked Hat Creek conservation corridor. The contribution was imposed under s 94(1) of the Environmental Planning and Assessment Act 1979 (EPAA) as part of a consent for Hammersmith Management Pty Limited’s subdivision.
No linked legislation citations have been extracted yet.
Hammersmith owned Lot 104, a 129.1-hectare parcel forming about 30.5 per cent of the Northlakes Urban Release Area ([3]). The Council’s 1996 rezoning placed most of Hammersmith’s land in residential use, while a 36.59-hectare corridor around Cocked Hat Creek was zoned for open space ([5]). The Council later adopted the Northlakes Section 94 Contributions Plan No. 2. The plan treated the corridor as a conservation item and proposed to recover its full acquisition cost, stated as $7,334,466 ([9]–[11]).
Hammersmith applied to subdivide part of its land into 37 community title lots. The Council granted consent on 26 June 2002. Condition 53(a) required a $66,267 contribution towards acquiring the corridor ([12]). Hammersmith challenged that condition in a Class 1 appeal. It also brought a separate Class 4 challenge to the validity of the contributions plan. Lloyd J dismissed the plan-validity challenge, but allowed the Class 1 appeal and deleted the contribution condition ([13]–[14]). Hammersmith did not appeal the ruling that the plan was valid.
The Court of Appeal’s jurisdiction was limited to questions of law because the primary judge had exercised the Land and Environment Court’s Class 1 jurisdiction ([2]). The Council argued that Lloyd J had applied too demanding a test by requiring a “need” generated by the particular development, instead of asking whether the development would benefit from or increase demand for the corridor ([24]–[25]).
The appeal was dismissed with costs. The Court held that the primary judge had not made the asserted legal errors, and that his separate finding of unreasonableness under s 94(2) was unchallenged and independently supported the result ([68]–[70]).
The central question was the meaning and operation of s 94(1). The provision applies where the consent authority is satisfied that a development “will or is likely to require the provision of or increase the demand for public amenities and public services within the area” ([7]). It permits consent to be made conditional on land dedication or a monetary contribution, subject to s 94(2)’s requirement that the contribution be reasonable.
The Court rejected the claim that Lloyd J had ignored one limb of the statutory phrase. The primary judge identified both questions: whether the development would require the corridor and whether it would increase demand for it ([20], [26]–[27]). His use of “need” was, in Tobias JA’s reading, shorthand capable of covering both limbs. A development might exclusively generate the need for a facility, or contribute to that need alongside other development. The former could meet the “require” limb; the latter could meet the “increase the demand” limb ([35]–[37]).
The Court also rejected the argument that “require” should mean no more than “benefit from”. The statutory wording directs attention first to the particular development and the kinds of amenities it will or is likely to require or increase demand for. The Council’s proposed approach instead started with an amenity and asked whether the development could benefit from it. Tobias JA considered that this reversed the focus of the statutory test ([41]). Put simply, the possibility of use or benefit is not the same as evidence that the development creates a need or adds to demand.
The prediction required by “will or is likely to” does not require the development to have already occurred. However, the Court explained that the prediction still needs evidentiary support. In this context, “demonstrate” did not replace the predictive statutory test with a requirement for proof of an already existing need. It meant that there had to be evidence justifying the prediction that the development would generate a need or increase demand ([44]).
The Court treated Parramatta City Council v Peterson as addressing a different stage of the analysis. In Peterson, it was undisputed that a large commercial and retail development would generate a need for more car parking than it provided on site. The dispute concerned whether a proposed car park some distance away had a sufficient relationship to that already-established need ([46]–[51]). The Court said that benefit from the particular car park was relevant to the Newbury relationship test, not a substitute for satisfying s 94(1) in the first place ([51], [55]). Thus, Peterson did not establish that any development capable of benefiting from a public amenity automatically meets the statutory threshold.
Tobias JA described the requirements as cumulative. A condition must satisfy one of the statutory limbs and meet the three Newbury requirements: it must be for a planning purpose, fairly and reasonably relate to the development, and not be so unreasonable that no authority would impose it ([52]). The Court distinguished the third Newbury test from s 94(2). The Newbury test concerns validity in the special sense of extreme unreasonableness; s 94(2) separately requires a reasonable contribution ([53]).
The primary judge had found that the conservation need arose from the corridor’s intrinsic characteristics, rather than from Hammersmith’s proposed subdivision. He also found that there was no suggestion the subdivision created a need for, or increased demand for, either the corridor or the cycleway proposed within it ([21]). The Court held that possible resident use did not displace those findings ([60]). It also declined to treat contested evidentiary material as establishing a legal error: any failure to draw an inference from that evidence would be factual, rather than an error of law within the appeal’s limited scope ([66]–[67]).
Finally, the Court distinguished the primary judge’s two conclusions. The plan could validly provide for the corridor, and future residents’ expected benefit could supply a relationship between the corridor and development in the release area, while the particular Hammersmith subdivision still failed the s 94(1) test ([61]–[65]). Plan validity did not itself prove the statutory precondition for each individual contribution condition.
The judgment presents the statutory and doctrinal framework as it stood in 2003. It did not announce that conservation land could never be a public amenity. The primary judge had rejected that broad challenge, concluding that conservation could be an amenity for s 94(1), and Hammersmith did not appeal that part of the decision ([17]–[19]). The Court of Appeal’s reasoning instead focused on the link between the particular development and the need or increased demand for the amenity.
The judgment draws on Rockdale Municipal Council v Tandel Corporation Limited for the historical use of “need” in this context. Tobias JA noted that the language of ss 94(1) and 94(6) was modelled to a significant degree on Glass JA’s formulation that development could create a need for open space ([30]). It also records that courts and councils had used “generated need” as shorthand ([31]–[32]). The decision therefore does not reject that shorthand; it specifies that the shorthand must remain faithful to the statutory alternatives.
The important clarification is that benefit and need perform different work in the analysis. Section 94(1) asks whether the development will or is likely to require an amenity or increase demand for it. The Newbury relationship test asks whether the particular condition fairly and reasonably relates to the development. The fact that a development may benefit from an amenity can be relevant to the latter without proving the former ([51]–[55]). Section 94(2)’s reasonableness requirement is also separate ([52]–[53]).
The Court’s discussion of Peterson narrows the reading the Council sought to give that case. On Tobias JA’s account, Peterson began with an undisputed increase in the need for car parking. Its issue was whether the particular car park could meet that need and relate fairly and reasonably to the development ([46]–[51]). It did not dispense with the initial s 94(1) threshold.
This judgment does not establish a general rule that every development must independently require a whole facility before any contribution can be made. It recognises the “increase the demand” limb, under which a development may contribute to an aggregated demand ([33]–[37]). The inquiry remains development-specific and predictive, but the predicted demand need not arise exclusively from one development.
At [41], Tobias JA says that both limbs require the decision-maker to focus on the particular development and ask what types of amenities that development will or is likely to require or increase demand for. In plain English, the inquiry starts with the development’s likely demands, not with a facility the council wishes to fund and a general possibility that residents could use it.
At [44], the Court accepts that the legislation is predictive because the development has not yet occurred, while requiring evidence to justify the prediction. In practical analytical terms, a decision-maker need not wait for the demand to materialise, but a contribution cannot rest solely on assertion or the fact that the amenity would be useful.
At [52], Tobias JA sets out the statutory threshold and the Newbury tests as separate requirements. The statutory question is whether the development generates a relevant need or increase in demand. The Newbury questions then address the purpose and relationship of the condition, as well as the extreme-unreasonableness test. The structure matters because passing one part does not automatically answer the others.
At [55], the Court says that if the development does not increase demand for the relevant type of amenity, the inquiry need go no further. If it does, a further question arises as to whether the contribution for the particular facility fairly and reasonably relates to that development. This explains why Peterson did not decide the threshold issue in Hammersmith’s case.
At [65], the Court explains that the plan-validity finding could not be converted into a finding that development would require or increase demand for the corridor. In plain language, a contributions plan’s lawful existence does not establish that every charge made under it satisfies the statutory preconditions in an individual development decision.
The reasoning is most directly engaged where a council imposes a monetary contribution or land-dedication condition under s 94(1), and the developer disputes the link between its particular proposal and the amenity to be funded. Relevant questions include whether the proposal will require the type of amenity, whether it will add to demand for that type, and what evidence supports that prediction.
The distinction is especially significant where the council points to general benefit, possible use by future residents, or a relationship between an amenity and development across a wider release area. Those matters may be relevant to the plan or to the Newbury relationship inquiry, but this judgment says they do not, without more, establish the s 94(1) threshold for a particular development ([55], [62]–[65]).
The “increase the demand” limb is important where several developments contribute to a shared or area-wide need. The Court accepted the conceptual possibility that no individual development, considered alone, would require an entire facility, while developments in aggregate increase demand for it ([33]–[37]). The case does not require the individual development to be the sole cause.
The judgment also matters where the underlying amenity has an independent or intrinsic value. Here, the conservation need was found to arise from the land’s characteristics, not from the subdivision ([21]). That finding did not prevent the corridor from being a public amenity or being included in a valid plan. It was relevant to whether this development generated the statutory need or demand.
The supplied judgment does not describe later courts’ treatment of Lake Macquarie City Council v Hammersmith Management Pty Limited. It therefore does not support a claim about whether later cases followed, narrowed, distinguished, or overruled this decision.
The judgment itself refers to Terrace Tower Holdings Pty Limited v Sutherland Shire Council [2003] NSWCA 289 at [69], alongside Yates Property Corporation Pty Limited (in liq) v Darling Harbour Authority, for the proposition that an unchallenged independent ground could itself justify dismissal of an appeal. That is the Court’s use of those authorities in this case, not a later court’s treatment of Hammersmith.
A related point in the judgment is its explanation of Peterson. The Court distinguishes that earlier authority because the development there was already accepted to generate a need for car parking; the controversy concerned the relationship between the specific car park and that need ([46]–[55]). This is the Court’s account of Peterson, not evidence of later treatment of Hammersmith.
The judgment does not decide how much evidence is sufficient to support a prediction that a development will increase demand. At [44], it states the need for evidentiary support but does not prescribe a particular methodology, evidentiary threshold, or quantitative measure. Nor does it set out how decision-makers should allocate demand among multiple developments when contributions are based on aggregated growth.
The decision also does not determine the permissible scope of conservation as a public amenity in every setting. The plan-validity challenge had been dismissed and was not pursued on appeal; the Court was addressing whether this specific condition met s 94(1), not laying down a universal rule about conservation contributions ([14], [17]–[19]).
The relationship between a valid contributions plan and an individual condition is clarified at a general level, but the judgment does not exhaustively address every circumstance in which a plan’s area-wide nexus might support a contribution condition for a particular development. Its holding is tied to the primary judge’s findings that this subdivision did not require or increase demand for the corridor, and to the evidence and issues before the Court ([61]–[67]).
Nor does the judgment decide how the analysis would apply where the particular development demonstrably contributes to demand for the relevant type of amenity, but the selected facility is distant or benefits a broader population. It explains that, after the statutory threshold is met, the Newbury relationship test becomes relevant, and it describes Peterson as an example of that later inquiry ([51]–[55]). The exact application remains fact-dependent.
This is general legal information, not legal advice. Zoe can make mistakes. Before acting on or relying on this analysis, have a qualified Australian lawyer check it.
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.
Conclusion 68 In my opinion, the various challenges to the decision of the primary judge fail. Even if any of them had been successful it is to be noted that the primary judge expressed an additional and independent ground for rejecting the impugned condition. In [30] of his judgment he concluded: "Moreover, absence of any demonstrated need suggests that the condition is unreasonable, even if it is determined in accordance with the contributions plan and so would not be allowed by the Court pursuant to s 94(2)." 69 There is no challenge to that finding: nor could there be as it was one of fact. That alone is sufficient to justify dismissal of the appeal: Yates Property Corporation Pty Limited (in liq) v Darling Harbour Authority (1991) 24 NSWLR 156 at 177; Terrace Tower Holdings Pty Limited v Sutherland Shire Council (2003) NSWCA 289 at [30]. 70 However, as no error of law on the primary judge's part has been demonstrated, it follows that the appeal should be dismissed with costs. 71 YOUNG CJ in EQ: I agree with Tobias JA.
Last Modified: 10/31/2003 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Lake Macquarie City Council
Hammersmith Management Pty Limited
CITATION : Lake Macquarie City Council v Hammersmith Management Pty Limited [2003] NSWCA 313 HEARING DATE(S) : 17 September 2003 JUDGMENT DATE : 29 October 2003
CATCHWORDS : ENVIRONMENT & PLANNING - whether contributions plan valid - whether condition of monetary contributin imposed by local council on particular development valid - meaning of "will or is likely to require" in s94(1) EPAA - Newbury test - ND LEGISLATION CITED : Environmental Planning & Assessment Act 1979, s54(1), s94(10, s94B, s97, s80, s80A Land & Environment Court Act 1979 cl.27(1)(c), s57(1) Parramatta City Council v Peterson (1987) 61 LGERA 286 Rockdale Municipal Council v Tandel Corporation Limited (1975) 34 LGERA 196 Association for Berowra Creek Inc. v Minister for Planning (2003) NSWLEC 39 Cowra Shire Council v Minister for Urban Affairs & Planning (2001) NSWLEC 113 House of Peace v Bankstown City Council (2000) 48 NSWLR 498 CASES CITED : Newbury District Council v Secretary of State for the Environment [1981] AC 578 Russo & Ors v Burwood Municipal Council - 25 November 1996, unreported Associated Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 Stockland (Constructors) Pty Limited v Shellharbour Council - 24 April 1996, unreported Randwick Municipal Council v Manousaki (1988) 66 LGERA 330 Yates Property Corporation Pty Limited (in liq) v Darling Harbour Authority (1991) 24 NSWLR 156 Terrace Tower Holdings Pty Limited v Sutherland Shire Council (2003) NSWCA 289 PARTIES : Lake Macquarie City Council Hammersmith Management Pty Limited FILE NUMBER(S) : CA 40161/03 COUNSEL : A: D.J. Preston SC / D R Parry R: Dr G Flick SC / J Jagot SOLICITORS : A: Peter Rees R: Mallesons Stephen Jaques
(1987) 61 LGERA 286
(1975) 34 LGERA 196
(2000) 48 NSWLR 498
(1988) 66 LGERA 330
(1991) 24 NSWLR 156
Appeal dismissed with costs. The primary judge’s order deleting the contribution condition was left undisturbed.