[2004] VCAT 546

Certificate of Title Volume 10601 Folios 659, 660, 661

Development Contributions Plan Overlay - Schedule 1 - Development Contributions Plan Overlay (Schedule 1)

This application for an enforcement order that the respondent pay to the council the principal sum of $20,374, together with interest on that principal sum as calculated from 6 March 2001 pursuant to Section 227A of the Local Government Act 1989, is dismissed, with no order as to costs.

1 This is an application under section 114 of the Planning and Environment Act 1987 for an enforcement order to enforce condition 9 of Permit No. M/2000/555 issued on 6 October 2000 (corrected on 29 December 2000 and amended again on 23 September 2002), which condition requires payment of a development contributions levy prior to the commencement of development.

2 The subject land is in a Business 2 zone under the Maroondah Planning Scheme and very specifically affected by a Development Contributions Plan Overlay Clause 45.06-1. Pursuant to that clause:

A permit must not be granted to subdivide land, construct a building or construct or carry out works until a development contributions plan has been incorporated into this scheme.

This does not apply to the construction of a building, the construction or carrying out of works or a subdivision specifically excluded by a schedule to this overlay. [The subject land is not so excluded].

* Be consistent with the provisions of the relevant development contributions plan.

* Include any conditions required to give effect to any contributions or levies imposed, conditions or requirements set out in the relevant schedule to this overlay.

3 Pursuant to Clause 3.0 Schedule 1 to the Development Contributions Plan Overlay, certain specific amounts per square metre of floor space or site area are expressed as the levies for traffic management, streetscape and environment and drainage works.

Alleged Contravention and Order sought by council

4 On 25 September 2003, Council commenced proceedings alleging that the subject land has been developed for the purpose of three two-storey office buildings without the required payment having been made to Council in contravention of Condition 9 of the permit, and sought the following orders:

that the Respondent be directed to pay to Council the principal sum of $20,374, together with interest on that principal sum as calculated from 6 March 2001, pursuant to Section 227A of the Local Government Act 1989 within 14 days of being served with a copy of this Order.

The Respondent is directed to pay the Council's costs for this application.

5 Planning Permit No. M/2000/555 permitting development of three, two storey office buildings over the subject land was issued on 6 October 2000 pursuant to delegated authority by a planning officer of the Responsible Authority.

6 The delegated officer's report dated 6 October 2000 makes it clear in the preamble that:

"The land is also affected by the Development Contributions Policy Overlay. The provisions of this overlay will require the payment of development contributions to Council for car parking, drainage and streetscape works".

7 However in that same report the delegated planning officer recommends a set of conditions, which omit the condition required to implement and comply with the Development Contributions Plan Overlay (hereinafter called `the levy').

8 On 13 October 2000 plans were endorsed pursuant to Condition 1 of this permit and approximately a week later the permit holder obtained a building approval from a private licensed building surveyor and commenced construction. Mr Vita, Director of FTV Properties Australia Pty Ltd, gave evidence under oath that building works commenced immediately after the building permit issued. The building permit that issued, clearly omitted any condition requiring payment of the levy or even imposition of the levy.

9 Condition 3 of the planning permit also required:

Construction plans for all parking areas and access lanes and the drainage thereof shall be submitted to and approved by the Responsible Authority prior to the commencement of any buildings or works authorised or required by this permit, except with the further consent of the Responsible Authority.

10 Mr Doyle, solicitor for the Responsible Authority argued that Mr Vita commenced development illegally, because construction plans for the parking areas and drainage were not endorsed until 23 March 2001 and the permit holder had no lawful right to commence building in the absence of endorsed parking area and drainage plan.

11 Mr Vita attested that he started work based on the endorsed planning permit plans and on the building permit, and then applied later for the endorsed parking areas and drainage plans, implying that he had the above condition 3 consent from the council to commence building. I note the consent did not have to be in writing. Mr Vita says he is an experienced builder who has built between 6 to 7 million dollars worth of development in this municipality and was at that time, also building near Cairns in Queensland.

12 Mr Vita attested that he left someone else in charge of the construction works and came down every three weeks from Cairns to check on the job during 2001. Mr Vita obtained a subdivision permit, subdivided the offices and on sold them to third parties.

13 The first contract of sale may have been entered into during 2001 because the transfer of land of Volume 10601 Folio 661 indicating sale of one of the office units from FTV Properties Australia Pty Ltd to Opalwood Investments Pty Ltd occurred in the Titles Office on 19 February 2002. This is a critical date which will also be referred to later.

14 Other transfers occurred on 27 November 2002 and 25 February 2003, thus disposing of all the subject land.

15 By 29 December 2000 the planning officer discovered his error and wrote out the following Modification of permit file note/checklist.

A/Correction of Mistakes: (Section 71)

Does the permit contain a clerical mistake or an YES

error arising from any accidental slip or omission.

Please modify the above permit under Section 71 of the Planning and Environment Act 1987 by:

Condition 9 to be added to the permit requiring the payment of a Development Contributions levy as required by the Development Contributions Plan Overlay (DCPO1). The condition for payment of the levy was to be included, but was omitted by accident (clerical error). Payment of the levy is mandatory under the Maroondah Planning Scheme.

16 Of course, by this date, the time limit for the permit holder to be able to review conditions had expired.

17 The permit holder received the `corrected' permit, which had been purportedly corrected pursuant to Section 71(1)(a) of the Planning and Environment Act 1987 during January 2001.

18 The corrected permit, includes the following Condition 9:

9. Prior to the commencement of any buildings or works hereby permitted, or at such later date as the Responsible Authority may approve in writing, a Development Contributions levy shall be paid to the Responsible Authority. The value of the Development Contributions levy shall be calculated in accordance with the Schedule to the Development Contributions Plan Overlay (DCP01) under the Maroondah Planning Schedule, and to the satisfaction of the Responsible Authority.

This permit was amended on 29 December 2000 in accordance with Section 71 of the Planning and Environment Act 1987. This permit was amended to include Condition 9.

19 Of course, this condition could not be complied with before commencement of works, as it only came into being afterwards.

20 On 6 March 2001 the Responsible Authority discovered that building works had commenced and sent a letter to the permit holder saying:

I refer to the above planning permit which was issued on 6 October 2000 for the construction of three (3) two-storey offices on the land, and I wish to advise that it has come to my attention that the owner/developer has acted in contravention of Condition 9 of the permit, which requires the payment to Council of a contribution as required by Schedule 1 of the Development Contributions Plan Overlay under the Maroondah Planning Scheme "prior to the commencement of any buildings or works...."

Given that works have now commenced, payment of this contribution is required to be made immediately in order to avoid any enforcement proceedings.

Could you please ensure that Condition 9 of the above permit is satisfied within 14 days of the date of this letter, or Council will be obliged to undertake legal action to enforce compliance with the permit."

21 Nothing happened in response to this letter of 6 March 2001.

22 Fifteen months passed until 12 June 2002 when the Council sent the following letter to the permit holder:

I refer to the above planning permit and the continued non-compliance of Condition 9 of the abovementioned permit.

As you are aware, Council notified on you 6 March 2001 (copy attached) that a payment of the contribution levy be made within 14 days.

Council has not yet received payment of $20,374 and therefore has no option but to commence legal enforcement proceedings against the property owner for failure to comply with the permit conditions and the Maroondah Planning Scheme.

Should payment be received within 14 days from the date of this letter, legal action will be withdrawn.

23 Until 12 June 2002, neither permit Condition No. 9 nor this letter dated 6 March 2001 contains a dollar amount of the levy.

24 On 5 July 2002 the Council explained to the permit holder how it had arrived at the figure of $20,374 as follows:

I refer to our previous letter dated 13 June 2002 (addressed to "HPV Properties" C/- EJ Grech & Associates, as per the details contained on the Application for Planning Permit form), regarding the required Developer Contribution for the proposed development at the above address, and I wish to advise as follows:

A detailed assessment of the contribution which is required to be paid to Council has been carried out, and this has confirmed that the required amount of $20,374 as per our previous advice:

* Total floor area of the proposed development is 525m2

Further investigations have also confirmed that at no stage has Council, or any of its officers, agreed that this contribution was not required to be paid or that the permit would be amended to delete the requirement.....

25 On 29 July 2002 Council issued an infringement notice against the Respondent.

26 Following the issue of the planning infringement notice with its $1,000 fine, the Respondent's solicitors first wrote back on 13 August 2002 followed by letters of 16 September 2002 and 18 November 2002 asserting that:

a) There was an agreement by the Council officers that the levy would be waived.

b) The use of s.71 was an inappropriate use of Council's power and any desire Council had to amend the permit based on a mistake made by it should have been exercised pursuant to s.87 of the Planning and Environment Act 1987.

Submission by Respondent as to the exercise of my discretion

27 The Respondent submits that, by the end of 2001 and well before the council genuinely started to implement the corrected condition, it changed its circumstances as a result of the permit originally issued on 6 October 2000.

28 It commenced construction in accordance with endorsed plans and a building permit that issued immediately thereafter, without any real idea of what sum was involved until June 2002, which was the first time in all correspondence received from the Council that a dollar figure was actually expressed for the levy By then it had sold part of the development and had altered its financial position accordingly, because it was unable to include the cost of the levy in the sale price. Therefore, even if the s.71 slip rule under the Planning and Environment Act 1987 was an appropriate method of correcting the permit, (which it denies), it submits it would be inequitable for that levy to be visited against them in this enforcement application because they have altered their position to their detriment in the meantime through no fault of their own.

29 To the Council's submission that the Respondent did not challenge the corrected permit soon after January 2001, for example by way of application for declaration under s.149A of the Planning and Environment Act 1987, the Respondent replied that:

(i) he thought only a nominal sum was involved and was not aware, neither from Condition 9 itself nor from the subsequent March 2001 letter, that an amount in the order of $20,000 plus was involved, and that

(ii) experienced as he was as a builder, using architects for plans and lawyers for conveyancing purposes, he had never come across such a form of "corrected permit" before and thought he could rely on the original permit.

30 The first issue is whether the correction of the permit using the s.71(1)(a) Planning and Environment Act 1987 tool or power was open to the Responsible Authority. In other words, was it open to the council to use s.71(1)(a) to correct the permit, or was a different power, such as s.87(1)(c) material mistake the only power available to council? Put another way, is this the sort of correction that can be made using the slip rule?

31 The second issue is whether, even if that tool was available to the council on the facts of this case, the council should have given notice to the permit holder that it intended to exercise that power, before it unilaterally issued a corrected permit, applying the logic of Batagol and Anor v Monk and Anor [2000] VSC 48.

32 The third issue is whether, even if the council was not obliged to give notice (natural justice) that it proposed to correct under s.71(1)(a), I should not exercise my discretion under ss.114 - 120 Planning and Environment Act 1987, to enforce that permit condition 9 to order that the respondents pay $20,374.00 to the council plus interest plus costs.

33 Ms Davis submits that even though only three months passes before the permit was corrected, the ramifications of same were not realised until June 2002, by which time the permit holder had altered its position financially, and it would be inequitable to seek to enforce that permit condition now.

34 The fourth issue is whether, even if I enforce the permit against the respondents, they should bear the costs - or whether council should pay the respondents' costs in all the circumstances of this case.

Was the s.71(1)(a) P.E.A. slip rule correction power open to the Responsible Authority?

35 The Responsible Authority maintains that it had a mandatory statutory obligation to impose the levy, that it had no discretion in the matter, and that therefore it was appropriate for it to use the s.71(1)(a) tool of slip or omission to correct the permit and add in the omitted condition 9. It's mandatory obligation arises from cl. 45.06-1 itself as well as from Planning and Environment Act 1987, s.46N, which reads:

46N. Collection of development infrastructure levy

(1) Without limiting section 62 if -

(a) an approved development contributions plan provides that a development infrastructure levy is payable in respect of the development of any land;

(b) an application is made under this Act for a permit to carry out that development on that land -

the Responsible Authority must include a condition in the permit that the applicant -

(c) pay the amount of the levy to the relevant municipal council within a specified time or within a time specified by the municipal council; or ......

36 The Responsible Authority distinguishes Flintwell Pty Ltd v Pakenham SC (1991) 6 AATR 265 on the basis that that case involved the imposition of a discretionary condition (the provision of a footbridge), whereas in the present case no discretion was available to council to impose the levy. The levy had to be imposed as a permit condition.

However, Section 71(1)(a) is not available to allow a change of mind by the Responsible Authority once it has passed a resolution that expressed correctly its mind on the matter at the time. It does not matter how much of a mistake that state of mind might afterwards be thought to be. As we have said, Section 71(1)(a) is not available to amend, as opposed to correct, a permit that correctly reflects a mistaken decision of the Responsible Authority. It cannot be used to change a decision that the Responsible Authority intended to make at the time.

In this case there is no clerical mistake or error in the permit at all. It correctly reflects the determination and fact made by the Responsible Authority as found in the resolution and in fact passed by the Responsible Authority. Not only that, the resolution reflects the intention and decision of the Responsible Authority. The Responsible Authority adopted the recommendation of the officers and that recommendation contained nothing about a foot bridge. If the permit had contained reference to a foot bridge, than it would have contained a mistake.

What is proposed here is the amendment of the substance of a permit, not the correction of a slip or clerical mistake in it. There are other provisions in the Act for making such amendments.

38 The Responsible Authority submits that, following the High Court in Ivanhoe Gold Corporation Ltd v Symons [1906] HCA 71; [1906] 4 CLR 642, that this was not a deliberate error on its part but an accidental error which is available to be corrected using the s.71 slip rule, because they had at all times intended the levy to be imposed by way of condition (indeed they had no choice in the matter) but accidentally omitted it.

39 His Honour Judge Wood, in Halpin v Boroondara City Council (unreported No 24284/2000, 13 November 2000) referred to various slip rule cases including the decision of McHugh JA in Storey v Keers P/L v Johnstone (1987) 9 NSWLR 446 at 449. This decision contained the following propositions:

Firstly, the rationale of the slip rule requires an omission or mistake not be treated as accidental if the proposed amendment required an exercise of an independent discretion or, is a matter upon which real difference of opinion might exist.

Secondly, the test of whether a mistake or omission is 'accidental' is whether, had the matter been drawn to the court's attention at the time, it would have made the correction at once.

The court always has a discretion to refuse to make an order under the slip rule if something has intervened which would render it inexpedient or inequitable that it be made.

40 Council argues that given the mandatory nature of the condition, it would have immediately corrected the error once it was recognised.

(i) Had the condition been imposed originally on 6 October 2000, they would have been able to exercise a s.80 Planning and Environment Act 1987 right of review and appeal the validity or reasonableness of the condition to VCAT;

(ii) a s.71(1)(a) correction generates no right of review to VCAT;

(iii) the s.71(1)(a) tool should only be used for a clerical correction and using it in this way for such a substantial amendment deprived them of natural justice and deprived them of an ability to alter their circumstances accordingly.

42 In my opinion, it is clear from the legislation[1] and the subordinate legislation[2] that the council had no choice but to impose that contributions levy condition, that the delegate turned his mind to it in his report, but omitted from actually including it, and therefore it is a classic type of slip rule correction.

43 In Batagol and McGill v Monk and the City of Port Phillip [2000] VSC @ 48 the Victorian Civil and Administrative Tribunal exercised its power under the slip rule more than 12 months after it had directed the issue of a permit. In that case the Applicants had incurred expenditure in reliance on the permit in accordance with its terms and the court quashed the Tribunal's order under the slip rule and remitted it back to the Tribunal, holding:

It is a fundamental rule of the common law doctrine of natural justice expressed in traditional terms that, generally speaking, when an order is to be made which will deprive a person of some right or interest or the legitimate expectation of a benefit, he is entitled to know the case sought to be made against him and to be given an opportunity of replying to it ......

Kioa v West [1985] HCA 81; (1985) 159 CLR 550 per Mason J at 582-5

44 As to whether the council should have given notice to the permit holder that it intended to exercise its slip rule power, the council rhetorically asked of what benefit it would have been, given it was the sort of condition against which no review was possible as they were obliged to impose it. They distinguish the Batagol facts.

Exercise of discretion under s.117(2)(b)

45 Miss Davis for the Respondent referred me to L Shaddock & Associates Pty Ltd and Another v The Council of the City of Parramatta (No. 2) [1982] HCA 59; 1983 151 CLR 590 @ pg 597 where the High Court held:

Third, we would observe that an order under the slip rule is not available as a matter of course. There is a discretion in the court to refuse an order if something has intervened which would render it inexpedient or inequitable that it be made ....... In the present case, there was considerable delay in filing the notice of motion. The Court's decision was given on 28 October 1981 and the judgement entered at the end of November 1981. The motion to amend the order is dated 22 July 1982. The general principle in support of finality in litigation together with the fact that a party against whom judgement in a money sum is entered is entitled to regard that judgement as finally determining the extent of his liability combine to stress the importance of prompt action under the slip rule.[Tribunal emphasis]

(i) the fifteen month delay in following up on the demand for payment of the levy,

(ii) the delay of about eighteen months in advising the monetary value of the levy and

(iii) the fact that this delay means the respondent has altered its financial circumstances to its detriment if I enforced the condition against it,

I exercise my discretion pursuant to the PEAct 1987 s.117(2)(b) not to enforce the permit condition.

47 In this case, the Batagol point of view persuades me because the respondent had altered its financial position on the basis of the original permit, and the Shaddock principles of finality in litigation together with the importance of prompt action have finally persuaded me.

48 Given that I have exercised my discretion not to enforce the corrected permit against the respondent, and not to order that the respondent pay the council the sum of $20,374, together with interest on that principal sum as calculated from 6 March 2001, pursuant to Section 227A of the Local Government Act 1989, I will not further disadvantage the council by awarding costs against it.

49 True, the respondent has also been put to costs and expense, but has avoided paying what would otherwise have been an obligatory development contributions levy. Had the Responsible Authority pursued the condition vigorously, it may well have succeeded implementing the levy, involving the respondent in different costs.

50 I exercise my discretion under the VCAT Act 1998, s.109(2) not to order costs against the council, whose actions have not been contumelious.

51 In summary I have found that the application for enforcement fails for the above reasons and I so disallow it.

[1] Planning and Environment Act 1987, s.46N

[2] Maroondah Planning Scheme Development Contributions Plan Overlay Clause 45.06-1