Longboard Developments Pty Ltd and Ors v Byron Shire Council

Finally, Mr Meineke expresses the opinion that obligations imposed upon the developer by various nominated conditions of the Development Consent relevantly involve "embellishment works of the open space lands".

Thus, according to Mr Meineke's opinion, conditions C35, C40, C46, C59 relevantly impose obligations for the embellishment of passive open space and condition C40 relevantly imposes obligations for the embellishment of active open space.

In total Mr Meineke identifies the following works to be relevantly "embellishment works of active and passive open space" and he attributes to each work the cost thereof as estimated by Mr Cottrell:

Item of Work Estimated Cost of Work Filling to Lot 52 and the pathway 77,000 Tennis Court 34,100 Half size basketball court 17,600 Pavilion 8,250 BBQ and brick support structure 1,650 Children's playground 5,500 Landscaping rehabilitation to parks 7,100 Street tree planting Stage 1 42,700 Street tree planting Stage 2 44,000 Walkway to beach 35,200 $273,100 TOTAL

Mr Cottrell's affidavit provides the details of his estimates of the costs of carrying out the works listed by Mr Meineke as embellishment works and adopted by the latter.

Mr White's affidavit contains his valuations of the three lots (lots 50, 51 and 52) and the pathway leading to the beach dedicated as required by Condition C11 of the Development Consent as follows: (i.) lot 50 $65,000 (ii.) lot 51 $30,000 (iii.) lot 52 $160,000 (iv.) the pathway leading to the beach $40,000

Mr White's valuation of Lot 52 reflects a rate per m2 of $90 and his valuations of lots 51 and 52 each reflect a rate per m2 of $10.60 and his valuation of the pathway reflects a rate per m2 of $10.

These rates per m2 reflect Mr White's opinion that the value of lands within the Scientific Zone (Zone 7(j)) designated by the Byron Local Environmental Plan (the LEP) would be approximately 10 per cent the value of land within the Residential 2(a) Zone designated by the LEP.

Mr White notes that lots 50 and 51 are located within the Scientific Zone and lot 52 is located in the Residential 2(a) Zone and the pathway is located in a mixture of zones - Residential 2(a), Scientific 7(j), Habitat 7(k) and Urban Coastal Lands 7(f).

Mr White's aforesaid valuations were current values but he confirmed in oral testimony that his adopted values would also be relevant as at two further dates - namely March 1996 when the Development Consent was granted and October 1999 when the Subdivision Plan of the approved development was registered.

The Council adduced affidavit evidence of Mr Montgomery, its "Section 94 and Tree Preservation Officer". I have already referred to Mr Montgomery's evidence seeking to explain why the Schedule of Contributions attached to Condition C30 applied the required contribution for "active open space acquisition" to 21 lots rather than the 82 additional lots created by the approved subdivision.

According to Mr Montgomery's evidence, there were in force at the date when the Development Consent was granted two further s 94 Contributions Plans (ie additional to the Plans relating to "Open Space" and "Community Facilities"), namely a Plan relating to "Bikeways" and a Plan relating to "Street Tree Planting".

Mr Montgomery expresses a number of opinions on the intent and the effect of Condition C30 which I shall refer to in more detail later in these reasons. Whereas there is little difference between the opinions of Mr Montgomery and Mr Meineke on the requirements for open space land dedication in terms of the Council's s 94 Contributions Plan - Open Space their opinions significantly diverge on the question of what works qualify as "open space embellishment works".

C. THE DISPUTED MEANING OF CONDITION C30 OF THE DEVELOPMENT CONSENT

The dispute arises entirely from the Contents of the "Note" appearing at the end of the Schedule of Contributions attached to Condition C30.

But for the existence and effect of the "Note" it is common ground that the Schedule of Contributions would require payment of a total amount of $298,080 (plus adjustments for relevant Consumer Price Index increases, which adjustments are not relevant in these proceedings).

The Council does not submit that the "Note" is simply to be ignored. Rather it submits that on a proper construction, its true meaning is as follows: (i.) the requirement to reduce the contribution by "the value of land dedicated for active and passive open space" does not apply to lands that have been dedicated pursuant to Condition C11 of the Development Consent which required "dedication at no cost to Council" (as occurred in the present case upon registration in October 1999 of Deposited Plan 1006418); (ii.) in the alternative, any reduction in contribution should be limited to the value of the quantum of dedicated land that exceeded the maximum quantum of land required to be dedicated under the Council's S 94 Contributions Plan - Open Space; (iii.) the requirement to reduce the contribution by "the cost of active and passive open space embellishment work" does not apply to expenditure unless it:- (a) relates to "embellishment work" that is identified as such in the s 94 Contributions Plan - Open Space and is agreed to by the Council as "Works in Kind", within the meaning of that Plan; and (b) is not otherwise required to be undertaken by virtue of conditions of the Development Consent (other than Condition C30).

The Applicant's competing submissions may be summarised as follows: (i.) the true meaning of the Note to the Schedule of Contributions is that it requires the total amount of contributions specified in the Schedule to be reduced by a number of factors, including the following which are relevant to the present case: (a) the value of any land dedicated for active a and passive open space; and (b) the cost of any active and passive open space embellishment work. (ii) the Council's primary submission that the Note does not apply to the value of land that is dedicated pursuant to Condition C11 "at no cost to Council" would involve a confession of an excess of the power conferred by s 94 of the EP&A Act and should on that account, be rejected, in favour of a construction which harmonises the effect of conditions C11 and C30 as conditions operating within the limits of the power conferred by s 94; (iii) the Council's alternative submission reads important restrictive words into the text of the Note without any justification; and (iv) the Council's submission that the reduction from the required contributions of "the cost of active and passive open space embellishment work" is only allowed if the Council has agreed to the embellishment work as a "work in kind" involves an "impermissible" gloss on the text of the Note.

It is important to emphasise at the outset that the sole issue presented by the parties for adjudication is the question of the proper construction of Condition C30. Importantly, there is no claim made by either party seeking rectification of the condition, and as I have earlier noted, the Applicant has abandoned its claim that the condition is invalid and severable from the Development Consent. Accordingly, the sole question is what is the scope and content of the obligation imposed upon the developer by Condition C30. In this respect, as earlier noted, no difficulty arises from the terms of Condition C30 or from the terms of the Schedule of Contributions. The sole difficulty is that posed by the content of the 'Note" appearing at the end of the Schedule.

The principal difficulty posed by the content of the Note concerns its reference to "land dedicated for active and passive open space". What precisely is being referred to here? Is it a reference to all of the land that has been dedicated as required by condition C11 (as contended for by the Applicant) or is it a reference to land that has been dedicated otherwise than as required by Condition C11 (as is principally contended for by the Council)?

As a matter of ordinary construction, each of these possibilities lays some initial claim to acceptance, but upon analysis, each solution also presents some difficulty.

Take first the Applicant's contention where the problem can be exposed by asking the following question: Why is the reference in the Note to "land dedicated for active and passive open space" to be taken to include land dedicated as required by Condition C11 when (i) there is nothing in that condition that in terms speaks of "active and passive open space"; (ii) where the condition requires dedication "at no cost to Council"; and (iii) there is no apparent nexus or connection between the separate obligations created by Conditions C11 and C30?

Yet a further difficulty with the Applicant's contention is why should there be a reduction in the required contribution on account of land dedicated for active and passive open space in circumstances where (i) no contribution is imposed in respect of passive open space acquisition; and (ii) there is only a partial contribution imposed in respect of active open space acquisition (namely that based upon 21 lots instead of the additional 82 lots created by the approved subdivision when it is by reference to those 82 lots that all other contributions are imposed by Condition C30, (as are the "water, bulk water and sewer" levies pursuant to the Water Supply Authorities Act 1987 as required by Condition C29of the Development Consent?)

The Applicant's answer to these apparent difficulties proceeds along the following lines.

Condition C30 imposes requirements for monetary contributions conformably to s 94 of the EP&A Act. That section provides the exclusive power for conditions to be imposed upon a development consent requiring "(a) the dedication of land free of cost or (b) the payment of a monetary contribution or (c) or both", subject to a number of specific limitations, namely: (i.) the condition must only require a reasonable dedication or contribution for "the provision, extension or augmentation of the public amenities and public services": subsection (2); and (ii.) the condition must be "of a kind allowed by, and determined in accordance with a contributions plan approved under s 94AB": subsection (7).

Not only was condition C30 a condition "authorised by s 94" within the meaning of the EP&A Act, s 91(3)(h) (since repealed and re-enacted in the current EP&A Act as s 80A(l)(h)) but so was condition C11, requiring the dedication of the specified lots as "public reserves for recreation at no cost to Council".

Once it is appreciated that both Conditions C30 and C11 are conditions authorised to be imposed by s 94, then not only is each condition required to satisfy the two aforesaid limitations on the s 94 power, but the operation and effect of the two conditions can be readily harmonised. In particular, that harmonisation readily justifies reading the reference to "land dedicated for active and passive open space" in the Note to the Contributions Schedule attached to Condition C30 as including the lands required to be dedicated by Condition C11 because both conditions are concerned with s 94 contributions.

Notwithstanding the attractiveness of this argument, there remains this fundamental difficulty - why should there be allowed a reduction in the required contribution on account of the value of land dedicated for active and passive open space when the required contribution does not itself require any contribution in respect of passive open space acquisition and requires only 25 per cent of the permissible maximum contribution for active open space acquisition?

The Applicant's answer not only fails to deal with this serious anomaly, but itself proffers a solution which on its face is not consistent with the Applicant's suggested operation of s 94 or the Council's s 94 Contributions Plan - Open Space.

Moreover, given the very narrow context of the present proceedings raising only the question of the proper construction of Condition C30, there is obvious difficulty standing in the way of accepting the Applicant's argument that Condition C11 should itself be regarded as a condition entirely dependent upon the power conferred by the EP&A Act, s 94. In the first place, unlike Condition C30, the Condition is not itself expressed to be a s 94 condition. Secondly, there is no obvious nexus between the conditions. The Applicant argues that as a matter of legal power, condition C11 must be read as if it were a condition authorised solely by s 94.

Whereas long standing decisions of this Court (eg Fitch v Shoalhaven City Council (1987) 67 LGRA 165 per Stein J) have held that s 94 provides "the exclusive source of power for contributions or dedications for public amenities" in the sense that a consent authority cannot avoid the express limitations on the s 94 power by seeking to impose the same type of condition pursuant to its general power to impose conditions, it is very important to appreciate that s 94 is premised upon the fact that it is the consent authority that probably must bear the impact of increased demand for public amenities and public services generated by the approved development.

However, where in the case of a development like the present, creating a sizeable residential subdivisional estate, it is the developer who conventionally under planning law and practice, must bear responsibility for the provision, extension or augmentation of many public amenities and services. For example, in the present case, the developer must build the subdivision roads to the standard required by the Council and then dedicate them: vide Condition C12(a). Likewise, the developer must extend into the residential estate the existing Council sewerage and water mains: vide Condition C15. Likewise, the developer is required to construct traffic devices pursuant to Conditions C33 and C39.

In a real sense, all these obligations involve the provision of "public amenities or services". However, the conditions imposing them are not on that account simply to be supposed to be conditions emanating from s 94 for the reason that the obligations are wholly imposed upon the developer as integral and essential features of the approved development. For that very reason they are not public amenities and services within the purview of the s 94 regime because the consent authority itself is not required to provide them. It follows that the Applicant's argument that as a matter of power, these identified conditions must be held to emanate from s 94 must be rejected.

However, having clarified the proper limits of the principle enunciated in Fitch, there is, it must be conceded, greater difficulty in determining as a matter of construction, whether or not Condition C11 is relevantly a condition that emanates from s 94.

However, having regard to the Council's own evidence and its arguments advanced on the hearing, I think that it is both fair and legitimate to regard Condition C11 as having been intended to impose a condition for dedication for open space purposes of the relevant lots free of cost, conformably to s 94.

In particular, Mr Montgomery specifically acknowledges in par 9 of his affidavit that the dedication of lots 50 and 51, having a combined area of 9774 m2 far more than satisfied the passive open space requirements of 2,977 m2 contained in the Council's s 94 Contributions Plan - Open Space. It is also to be noted that whereas Mr Montgomery for whatever reason did not bring into his account of lands dedicated for open space (passive or active) the land comprising the pathway to the beach, the Council, in its final address acknowledged that this land contributed an additional area of 3,731 m2 dedicated passive open space, with the Council conceding that an area of 10,528 m2 had been dedicated in excess of the area of a passive open space that was required by the Council's s 94 Contributions Plan - Open Space.

This result is to be contrasted with the area of land dedicated for active open space which involved a deficit of 2,211 m2 in the area of active open space required by the Council's s 94 Contributions Plan - Open Space.

Turning for the moment to the Council's primary argument that the Note to the Schedule of Contributions simply did not apply in respect of land that had been dedicated for active and passive open space as required by Condition C11 because that condition had required dedication "at no cost to Council", the Applicant's argument that such an outcome would significantly transgress the limitations on the s 94 power, provides, I think, a cogent rebuttal of the Council's contention, particularly in the light of the Council's case that freely conceded an overall excess in the dedication of lands for open space (active and passive) of 8,317 m2 (representing an excess area of passive open space of 10,528m2 and a deficit area of active open space of 2,211 m2).

However, the Council's alternative argument does, I think, present an attractive solution having all the hallmarks of fairness of ultimate contributions impost, and consistency with the limitations on the s 94 power and with the Council's s 94 Contributions Plan - Open Space. That alternative argument, it is to be recalled, is that the reference in the Note to the Schedule of Contributions to "land dedicated for active and passive open space" is intended to refer only to so much of such land that is dedicated in excess of the maximum requirements that may be imposed consistently with the express limitations on the s 94 power. As a matter of mathematical calculation, this means applying to the excess area of 8,317 m2 the value of that land by applying thereto the rates per m2 adopted by Mr White in his valuations of the lands dedicated for passive open space ($10.60) and the dedicated pathway lands ($10) resulting in a total value of $85,930 made up as follows:

Area Value (i) 4586 m2 @ $10.60 $48,620 (ii) 3731 m2 @ $10.00 $37,310 TOTAL VALUE $85,930 TOTAL AREA 8,317 m2

Subject to a necessary adjustment to the calculation of the value of excess land dedicated as active and passive open space, I think that the Council's alternative contention proffers an available solution by way of construction of the Note to the Schedule of Contributions, which operates with even-handed fairness to both parties.

The adjustment to the calculation that I consider to be necessary is that which recognises the following facts: (i.) there is an excess in area of 10,528 m2 of land dedicated for passive open space; and (ii.) there is no deficit in the area of land dedicated for active open space because the Schedule of Contributions includes a component for "active open space acquisition" (which component was, according to the unchallenged evidence of Mr Montgomery, included in the required contributions to make good the deficit of 2211 m2 in the area required to be dedicated).

Accordingly, instead of the Council's calculation earlier recited, the appropriate calculation that determines the reduction in the contributions, by virtue of the value of excess lands dedicated for active and passive open space, is to apply to the excess area of 10,528 m2 for passive open space the rate of $10.60 per m2 that was ascribed by Mr White in his valuation of lots 50 and 51, resulting in an amount of $111,597. This amount represents the relevant reduction in contributions.

My reasons for adopting the Council's alternative construction of the Note to the Schedule of Contributions can now be stated as follows: (i.) As a matter of construction, the phrase appearing in the Note "pursuant to Section 94 of the Environmental Planning and Assessment Act 1979" means, in context, that the ultimate impost by way of s 94 conditions (namely conditions C11 and C30) must be "reasonable" (s 94(2)(b)) and must be "of a kind allowed by and determined in accordance with" the Council's s 94 Contributions Plan - Open Space. That Plan not only prescribes the maximum rates of open space contributions (expressed in terms of (i) required land dedication; and (ii) monetary contributions for (a) land acquisition and (b) embellishment of open space) but also contains express provision for offsetting the value of land dedication against required monetary contributions. It is these particular features of the Contributions Plan, read in the light of the limitations imposed upon the s 94 power, which are given effect to by the total operation of the Schedule of Contributions and the Note thereto; (ii.) the reference in the Note to "land dedicated for active and passive open space" is a reference only to such land which has been dedicated in excess of the requirements for dedication contained in the Council's s 94 Contributions Plan; (iii.) such an interpretation is justified and supported having regard to the following features of the content of the contributions specified in the Schedule:- (a) no contribution was imposed for passive open space acquisition presumably because of the existence of Condition C11 which was known by the parties to have imposed requirements for dedication of lands for passive open space far in excess of the area required to be dedicated by the Council's s 94 Contributions Plan; and (b) only a partial contribution was imposed for active open space acquisition presumably because of the existence of Condition C11 which was known by the parties to have imposed requirements for the determination of lands for active open space containing an area less than the area required by the Council's s 94 Contributions Plan); and (iv) the adopted interpretation of the Note is one that plainly harmonises the operation and effect of Conditions C30 and C11 (as conditions emanating from s 94) and produces overall fairness to both parties in terms of the ultimate contributions impost imposed by s 94 whereas the competing constructions advanced both by the Applicant and by the Council in its primary submission, manifestly fail to provide any harmonisation in the operation and effect of Conditions C30 and C11 and also manifestly fail to achieve a fair and reasonable result, inasmuch as the construction contended for by the Applicant would give the Applicant the unmerited boon of avoiding altogether any requirement for contributions for open space (active and passive) acquisition, and the Council's primary argument would likewise give the Council the unmerited boon of acquiring gratis an area of 10,528 m2 dedicated as passive open space in excess of the maximum requirement allowed for under its s 94 Contributions Plan - Open Space.

For all the foregoing reasons, I hold that the reduction in contributions on account of "the value of land dedicated for active and passive open space" as I have interpreted that expression is $111,597.

The remaining dispute concerns that part of the Note that allows a reduction in contributions on account of "the cost of active and passive open space embellishment work". Although I think that the dispute is principally confined to the application of that particular expression rather than in its true meaning, I need to firstly determine that meaning.

Before doing so I should note that it is common ground that only two of the debated "embellishment works" (as itemised in Mr Meineke's affidavit) have in fact been carried out, namely (i) landscape rehabilitation to the value of $7,100; and (ii) street tree planting to the value of $42,700.

Since I do not understand the Applicant to dispute the Council's contention that the relevant allowable reduction in contributions is in respect of "the costs of embellishment works", and accordingly the works must be first carried out in order that relevant costs be incurred, this aspect of the Applicant's claim to declaratory relief is (unlike the other aspect of its claim concerning the reduction in contributions on account of the value of lands dedicated for open space) simply to have clarified at the present time the nature of the Applicant's necessarily future and contingent entitlements to reductions in the contributions it is required to pay pursuant to Condition C30, in the event it carries out those works.

The question of construction that is raised is simply what is meant by "active and passive open space embellishment work" appearing in the Note to the Schedule of Contributions.

This question is much more simply answered than the other question of construction raised in the proceedings. Although "embellishment" is an ordinary English word, it has long been used in the context of a Council's powers and responsibilities in respect of "public reserves". Thus, the Local Government Act 1919, s 349 provided:

The Council may improve and embellish public reserves which are under its care, control and management.

The contributions imposed by the Schedule of Contributions reflect the maximum requirements for embellishment provided for in the Council's s 94 Contributions Plan - Open Space.

The clear intent and purpose of the Note allowing a reduction in contributions on account of "the cost of active and passive open space embellishment work" is to provide the developer with the choice of either paying the requisite monetary contributions or undertaking "works in kind" (in part or total satisfaction of the relevant contribution). Such an entitlement is expressly provided for in the Council's s 94 Contributions Plan provided that the works satisfy the following requirement stated on p 5 of the Council's Plan:

Those works must be included in a schedule of facilities in the Plan…. "

An example of such an identification of works is provided in Appendix 6 to the Plan which contains under the heading "Approximate Costing Local Neighbourhood Play Space" the following items:

Play Equipment:- Main Structure $8,000 Swing Sets $2,500 Infants $1,200 School Aged Edging $600 Impact Absorbing Material $2,000

Landscaping:- Pathways $2,000 Seating $1,000 Plantings $1,000 Earthworks $1,000 Concrete Surfacing $1,000 Plumbing Etc. $500 Fencing $700

Labour $2,000 Survey Investigation & Design $1,500 $25,000 Total

Accordingly, and for the moment confining attention to Condition C30 in isolation from other conditions of the development consent, the proper construction of the relevant expression contained in the Note to the Schedule of Contributions is one that reflects the relevant content of the Council's s 94 Contributions Plan - Open Space, namely works embellishing active or passive open space (in the sense of improving and enhancing that open space), being works that are identified as embellishment works in the Contributions Plan.

However, there remains the possibility that this interpretive result may require some revision or modification in the light of other conditions of the Development Consent imposing obligations upon the developer to undertake particular works on the lands dedicated for open space purposes.

A good example is provided by Condition C40 requiring the developer to construct at his own cost on the lot (dedicated for active open space) the following facilities: · tennis court and pavilion · children's' playground · half size basket ball court · barbecue facilities

Mr Montgomery stated that when these works were constructed, the Council would allow a credit against the s 94 contribution for the cost of such works. He so concluded, notwithstanding the obligation cast upon the developer by Condition C40 to construct such works "at his own cost" reasoning in par 40 of his affidavit "that it would be unreasonable to interpret Conditions C30 and C40 so as to require the applicant to both provide for the relevant open space embellishment and thereafter pay the contribution for the same purpose".

This eminently fair reasoning process strikes me as providing a just solution to any conflict that might otherwise be thought to arise between the operation of Condition C30 including the Note to the Schedule of Contributions and other Conditions of the Development Consent that impose obligations on the developer to provide facilities on the open space lands.

In my opinion, having regard to the Council's s 94 Contributions Plan - Open Space and to the limitations on the s 94 power, the proper construction of Condition C30 and the Note to the Schedule of Contributions, is that the imposition of the monetary contributions for embellishment of open space is to be reduced by the cost of "open space embellishment works" whether or not they are the subject of any separate obligation imposed by any other conditions (including any conditions requiring such works to be undertaken "at the developers cost" or "without cost to the council").

Having adopted this interpretation of the Note to the Schedule of Contributions attached to Condition C30, it remains for me to apply it to the various items of works in dispute by deciding whether such works are relevantly "embellishment works", being such works that are relevantly identified in the Council's s 94 Contributions Plan - Open Space.

The disputed works are the following works as itemised in Mr Meineke's affidavit: (i.) filling lot 52 and the pathway (ii.) landscaping rehabilitation to parks (iii.) street tree planting - Stage 1 (iv.) street tree planting - Stage 2 (v.) walkway to beach

In my judgment, the following works do not qualify as relevant "active and passive open space embellishment works" as I have interpreted that expression in its context - (i.) filling of lot 52 and the pathway; (ii.) street tree planting Stage 1; (iii.) street tree planting Stage 2

In so concluding, I prefer Mr Montgomery's opinions to the competing opinions of Mr Meineke in respect of these items.

In particular, I also accept the Council's submission that filling of the land as required by Condition C55 applied to the lands to be dedicated for active open space and the beach pathway.

Moreover, I accept the Council's argument that the filling required by Condition C55 was in the nature of an essential pre-condition to bring the development site into a developable state. As such, the works were not in the nature of "embellishment works" but were in the nature of "pre-development works" (the two types of works being very different in kind).

It is also to be noted that "filling" of the land as required by Condition C55 is not relevantly identified by the Council's s 94 Contributions Plan - Open Space as an "embellishment" work.

The claim for street tree planting is not, in my opinion, even remotely an "open space embellishment work" because it is simply not located on the relevant open space lands.

I do, however, consider the other works in dispute, namely landscaping rehabilitation to the dedicated lands for passive open space and (ii) the boardwalk to be erected on the beach pathway qualify as "active and passive open space embellishment works" as I have interpreted that expression. In so concluding, I here prefer Mr Meineke's opinions to the competing opinions of Mr Montgomery.

For all the foregoing reasons, I hold that in the future event of the developer carrying out the following works the Note to the Schedule of Contributions to Condition C20 would allow for the reduction in the required contributions in respect of the cost of carrying out these works relevantly being "active and passive open space embellishment works": (i.) tennis court (ii.) half size basket ball court (iii.) pavilion (iv.) barbecue (v.) children's' playground (vi.) landscaping rehabilitation to parks; and (vii.) boardwalk erected on pathway to beach.

For all the foregoing reasons, I hold that the contributions required by condition C30 to be paid by the developer are reduced by the sum of $111,597 in respect of the value of land dedicated for active and passive open space, and in the event of the developer carrying out the works listed in the preceding paragraph, the said contributions are to be further reduced by the cost of undertaking those works.

The Applicant is invited to bring in draft short minutes within 21 days to give effect to my adjudications on the matters in dispute.

108. Exhibits (other than Exhibit B) may be returned.

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