Maroondah City Council v Fletcher & Anor [2009] VSCA 250

Court of Appeal (Vic)|2009-10-23|Before: Ms J, Warren CJ, Redlich JA

The applicant or owner must pay to the Council a sum equivalent to 5% of the site value of all land in the subdivision or a particular lot or lots. This payment shall be made prior to the issue of a Statement of Compliance and may be adjusted in accordance with Section 19 of the Subdivision Act.

112 The owner appealed condition 6, to the Tribunal and the grounds of application for review were essentially predicated on the proposition that the application was for a two stage development of two two lot subdivisions.

"It subdivides land into two lots and the council considers it unlikely that each lot will be further subdivided."

In this case the first stage is a two lot subdivision restructuring two existing titles both of which contain a dwelling. The single dwelling covenant remains, and this precludes any logical subdivision potential. The second stage is also a two lot subdivision, creating the additional lot, and it includes a modification to the covenant to limit development to one extra lot.

As this proposal is for two two lot subdivisions, which create lots which cannot be further subdivided, it is submitted that condition 6 is beyond power and should be deleted.

113 The Tribunal dealt with the matter on the following basis:

It is lawful for one permit application to seek permission for more than one development (or one development in two stages); and, in such an instance, the permit application should be disaggregated for the purpose of deciding the matter.[44] The fact that the permit in this case was not so expressed is not decisive; it is the proper characterisation of the application that counts.[45]

The application was thought by the surveyor for the permit application to only involve two lot subdivisions; and, by reason of the timing of the variation of the restrictive covenant, to only involve two lot subdivisions where (in each case) a reasonable council would consider it unlikely that each lot would be further subdivided.

The council submitted that there was a flaw in the approach taken by the permit holder, namely that on the first subdivision a reasonable council would not consider it unlikely that the enlarged Woodland Avenue lot (then of 1,959 square metres) would be further subdivided. (There would appear to be no issue about this in relation to the second subdivision.) The permit holder answered this by characterising the first stage as a "re-subdivision"; and, more particularly, as a type of subdivision that was not intended to be subject to the public open space requirement.

114 The first question of law stated in the notice of appeal is:

Did the Tribunal err in law in characterising the subdivision authorised by Permit No. M/2005/921 as two two lot subdivisions?

115 It can be seen that in a sense this question agitates the disjunction between the form of the permit application and the terms of the permit granted. The Council's position is that it did not permit two subdivisions, although as we have observed, this is what the owner sought permission for. This disjunction was not squarely addressed and resolved by the Tribunal.

116 Section 37(2) of the Subdivision Act requires that if a permit authorises a staged subdivision, that subdivision may be effected either as a series of separate subdivisions each in accordance with the provisions of the Act, or by way of the procedure set out in s 37(3)-(10). The latter procedure envisages the creation of sequential plans of subdivision within the framework of a master plan.

117 In the present case no staged subdivision of the latter sort was ever contemplated. What the owner sought was a permit for two separate sequential subdivisions. What was permitted was one single three lot subdivision. The procedure referred to in s 18(2) and s 37(3)-(10) of the Subdivision Act was not in issue.

118 It seems to us that the dispute with respect to the nature of the primary permission and its consequences for the application of s 18 should also be remitted to the Tribunal. The question of whether a single three lot subdivision should be permitted or whether two separate staged subdivisions should be permitted, is a question which may involve issues of planning discretion. If the view be taken that the staged subdivision is appropriate then that view could only be reached on the basis that the permit would create a situation where potentially only the first stage of the subdivision occurred and there was a period (currently intended to be only intermediate) in which the original lots were saleable and usable in their initial restructured layout. This stage would allow the smaller lot to be sold off before stage 2 was proceeded with.

119 If the Tribunal takes the view the Council was correct to permit only a three lot subdivision, then s 18(1A) will fall to be applied to the proposal as a whole. If it takes the view that Council should (responsively to the application) have granted a permit for sequential subdivision of the land in two separate stages, then s 18(1A) will fall to be applied to each of those stages. Section 18(8)(c) of the Subdivision Act will also fall to be applied to each stage. It may be objected procedurally by the Council that the application for review lodged with the Tribunal did not in terms take issue with the language of the permit permission to subdivide. As we have said however the grounds of application were centrally founded on the proposition that the application for permit was for a two stage development of two, two lot subdivisions. The procedural complications in these circumstances also seem to us to be matters which the Tribunal not this Court should resolve.

120 It follows that the appellant has succeeded in making out the following grounds of appeal:

The Tribunal erred in law in interpreting clause 52.01 of the Scheme as not applying to a subdivision which does not create an additional separately disposable lot.
The Tribunal should have interpreted clause 52.01 of the Scheme more broadly by reference to its language rather than in the confined manner adopted by the Tribunal by reference to a historical review and section 18(1) of the Subdivision Act 1998.

It has also succeeded in part in making out the following ground:

The Tribunal erred in law in concluding (for the reasons it did) that the subdivision authorised by Permit No. M/205/921 was not a subdivision to which the requirement in the schedule to clause 52.01 of the Scheme applies.

121 Finally, we would not consider the taxation question. It was not raised until the appeal and raised questions of fact which in all likelihood would have been the subject of evidence before the Tribunal if raised then.

(a) The limitations upon the power to fix a POS contribution pursuant to s 18(1) had no application to the proposed subdivision before the Tribunal, because it was concerned with a case in which the planning scheme fixed the level of such contributions.

(b) Section 18(1A) did however apply to the proposed subdivision, because it (together with other provisions not expressed to relate to requirements made pursuant to s 18(1)) are of general application to requirements for POS made by municipal councils upon subdivision pursuant to the P&E Act.[46]

(c) In the present case it remains for the Tribunal to determine whether in the terms of s 18(1A) the result of the proposed subdivision would 'be a need for more open space'.

(d) The exemption contained in s 18(8)(c) and repeated in the planning scheme provision also applied, but considered as a staged subdivision this was a case in which the Council was bound to consider at the time of approving stage 1, that one of the lots would be further subdivided.

(e) There is a disjunction between the form of subdivision applied for and that permitted by the Council. This disjunction is a matter for the Tribunal to resolve.

123 The appeal should be allowed. The application for review should be remitted for re-hearing in accordance with law and by a differently constituted Tribunal.

124 This is an appeal from a decision of the Victorian Civil and Administrative Tribunal (the Tribunal) sitting in the Planning and Environment List. The President of the Tribunal found that cl 52.01 of the Maroondah Planning Scheme (the Scheme) which required the making of a contribution for public open space (POS) did not apply to the subdivision being undertaken by the respondent (the landowner).

125 I have had the advantage of reading in draft the joint reasons of Warren CJ and Osborn AJA in which they have conveniently set out the relevant facts. I agree for the reasons they give, that cl 52.01 applied to the first stage of the subdivision and that the Tribunal erred in construing it as not applying to a subdivision which does not create additional disposable lots.[47] I also agree that the second stage would fall within the exception specified in cl 52.01 as the appellant (the Council) would be bound to consider it unlikely that each lot would be further subdivided. But the Council was also bound to conclude, at the time of stage 1, that one of the lots would be further subdivided. I further agree that there is a disjunction between the form of subdivision applied for and that permitted by the Council. I would therefore remit the matter for further hearing by the Tribunal on that limited issue.

126 The Tribunal also concluded that the specification in cl 52.01 of a POS contribution under the Scheme should be construed as subject to those parts of s 18 of the Subdivision Act 1988 (the Subdivision Act) which would have the effect of confining the circumstances in which such a POS contribution should be made. I agree with Warren CJ and Osborne AJA that the provisions of s 18 (1)[48] do not apply

to POS specified under a planning scheme and the Tribunal was in error to conclude otherwise.

127 The primary issue on the appeal was whether s 18(1A) of the Subdivision Act applied to the POS specification in clause 52.01 of the Scheme. For reasons substantially different from those of the Tribunal, Warren CJ and Osborn AJA reached the same conclusion as the Tribunal that clause 52.01 must be read as subject to the limitations contained in s18(1A). I am unable to agree. In my view the operation of this clause is not to be so confined.

128 The joint reasons also conclude that save for s18(1) and s18(1B), the other parts of s18 which are not mirrored in clause 52.01 also apply to a POS contribution specified in a planning scheme. I do not find it necessary or appropriate to reach a concluded view on these questions. They did not assume any prominence in the appeal and were not the subject of separate and full argument[49].

129 Finally, I would reject the landowner's further submission that if s18 (1A) did not apply to the POS contribution specified under the Scheme, clause 52.01 was so broad as to be an invalid exercise of power.

130 The intent of Parliament in introducing the relevant provisions of the P&E Act and the Subdivision Act and the meaning of clause 52.01 must be determined in their respective contexts. That includes anything that 'according to reason and logic can inform an understanding of their texts.'[50] In the course of my reasons I have dealt with these contextual matters. I consider that the context and language reveals a very clear Parliamentary intention that the POS specified in planning schemes should apply without limitation to all subdivisions to which the planning scheme relates. The Subdivision Act confers a residual power upon a council to make a requirement for a POS contribution. The making of the requirement is subject to two preconditions. First, that no POS has been specified in the planning scheme.[51] Secondly, that the council is of the state of mind that, as a result of the particular subdivision, there will be a need for more open space, when regard is had to the matters set out in s 18(1A). It is only where no specification of POS is made for the area covered by a planning scheme that Parliament requires the nexus set out in s 18(1A) be established between a site specific subdivision and the purpose for which POS is required.

131 As the clause applies in common form in planning schemes across Victoria, and its ambit is a matter of general significance, the Minister for Planning was permitted to intervene. He supported the validity of the clause and contended that s 18(1A) has no application to POS specified in a planning scheme.

(1) Clause 52.01 of the Maroondah Planning Scheme

132 The obligation to make a POS contribution contained within cl 52 is in these terms:

A person who proposes to subdivide land must make a contribution to the council for public open space in an amount specified in the schedule to this clause (being a percentage of the land intended to be used for residential, industrial or commercial purposes, or a percentage of the site value of such land, or a combination of both). If no amount is specified, a contribution for public open space may still be required under Section 18 of the Subdivision Act 1988.

A public open space contribution may be made only once for any of the land to be subdivided. This does not apply to the subdivision of a building if a public open space requirement was not made under Section 569H of the Local Government Act 1958 or Section 21A of the Building Control Act 1981 when the building was constructed.

A subdivision is exempt from a public open space requirement, in accordance with Section 18(8) of the Subdivision Act 1988 if:

...

It subdivides land into two lots and the council considers it unlikely that each lot will be further subdivided.

133 The clause is broad in its application. The schedule annexed to it specifies a percentage contribution of five per cent. On its face the clause thus creates an obligation to make a five per cent contribution in any case where approval for a subdivision is given. It provides for no discretion on the part of the responsible authority and is imposed without consideration of any aspects of the individual subdivision.

(2) Planning and Environment Act 1987 (P&E Act)

134 All municipal councils are required to prepare a planning scheme for the area for which they are the 'planning authority.'[52] The power to create a planning scheme is contained in the P&E Act. Section 6 provides:

(a) must seek to further the objectives of planning in Victoria within the area covered by the scheme; and

(aa) must contain a municipal strategic statement, if the scheme applies to the whole or part of a municipal district; and

(b) may make any provision which relates to the use, development, protection or conservation of any land in the area.

(2) Without limiting subsection (1), a planning scheme may-

(b) regulate or prohibit the use or development of any land;

(c) designate land as being reserved for public purposes;

(d) include strategic plans, policy statements, codes or guidelines relating to the use or development of land;

...

(g) subject to section 6A, regulate or provide for the creation, variation or removal of easements or restrictions under section 23 of the Subdivision Act 1988;

(h) require specified things to be done to the satisfaction of the responsible authority a Minister, public authority, municipal council or referral authority;

...

(k) provide that any use or development of land is conditional on an agreement being entered into with the responsible authority or a referral authority;

...

(ke) subject to subsection (3), specify what effect (if any) the planning scheme will have on a use or development of land for which a permit or certificate of compliance has been issued;

(l) provide for any other matter which this Act refers to as being included in a planning scheme.

135 As s 6(1)(a) states, a planning scheme must seek to further the objectives of planning in Victoria. Those objectives are set out in s 4(1) in these terms:

(1) the objectives of planning in Victoria are -

(a) to provide for the fair, orderly, economic and sustainable use, and development of land;

...

(c) to secure a pleasant, efficient and safe working living and recreational environment for all Victorians and visitors to Victoria;

...

(e) to protect public utilities and other assets and enable the orderly provision and co-ordination of public utilities and other facilities for the benefit of the community;

(f) to facilitate development in accordance with the objectives set out in paragraphs (a), (b), (c), (d) and (e);

(g) to balance the present and future interests of all Victorians.

136 Section 7 of the P&E Act dictates the structure of planning schemes in Victoria. It provides:

(1) A planning scheme for an area must include and must specify separately -

(2) The State Standard Provisions must consist of provisions selected from the Victoria Planning Provisions.

137 Pursuant to s 4A of the P&E Act the Minister is given the power to prepare and approve the Victoria Planning Provisions (VPPs) in order to 'assist in providing a consistent and coordinated framework for planning schemes in Victoria'. Section 7(4)(b)(i) provides that if there is an inconsistency between different provisions in a planning scheme, the State Standard Provisions from the VPPs prevail over the Local Provisions. Section 7(5) provides that the Minister may 'issue directions or guidelines as to the form and content of any planning scheme or planning schemes.' The Minister relevantly utilised this power to issue a Ministerial Direction entitled 'The Form and Content of Planning Schemes' ('the Direction') which was at all material times applicable. This Direction was first issued in December 1996, and has been repeatedly amended and reissued. The Direction prescribes which parts of the VPPs are compulsory inclusions in any planning scheme. Relevantly for the present case, the Direction required the 'Objectives of Planning in Victoria' and the 'Purposes of the Planning Scheme' to be included. The Direction stated that a planning scheme must include, inter alia, cls 10-19 and 50-52 (inclusive) of the VPPs which are concerned with POS requirements. The Local Policy Framework also deals with POS in cl 21.06.

If a provision from the Victoria Planning Provisions is required to be included or selected for inclusion in a planning scheme, the entire provision or clause (including all sub-clauses) must be included in the planning scheme in the same form (without modification) following the same sequence and using the same clause numbers as in the Victoria Planning Provisions.[53]

139 The Direction also stipulated that a planning scheme must not include a schedule for any provision for which a schedule is not provided in the VPPs. Where a schedule must be included, the Direction provided that 'if no information is to be included in the schedule the words '[n]one specified' must be included where appropriate to make the intent clear.'[54]

140 Section 7(6) provides that a planning authority must comply with a direction of the Minister under sub-section (5). Section 12B of the P&E Act also requires the planning authority to review its planning scheme at least once every three years to:

... enhance the effectiveness and efficiency of the planning scheme in achieving

(a) the objectives of planning in Victoria; and

(b) the objectives of the planning framework established by this Act.

141 The review is intended to ensure that the scheme is consistent in form and content with the directions issued by the Minister, that it sets out the policy objectives for the use and development of the land in the area and makes effective use of the State and Local Provisions to give effect to State and local planning objectives.[55]

142 Accordingly the planning policy concerning POS, set out at the commencement of the Scheme in cl 15.10 and reflected in cl 52, was empowered by the P&E Act, and its content was in conformity with the VPPs and the Direction made pursuant to that Act. As the VPPs must now by consequence of the Direction be included in every planning scheme throughout Victoria, cl 52.01 is a mandatory provision of every planning scheme.

143 Section 18 of the Subdivision Act 1988 provides:

(1) If a requirement for open space is not specified in the planning scheme, a Council, acting as a responsible authority or a referral authority under the Planning and Environment Act 1987 may require the applicant who proposes to create any additional separately disposable parcel of land by a plan of subdivision to -

(a) set aside on the plan, for public open space, in a location satisfactory to the Council, a percentage of all of the land in the subdivision intended to be used for residential, industrial or commercial purposes, being a percentage set by the Council not exceeding 5 percent; or

(b) pay or agree to pay to the Council a percentage of the site value of all of the land in the subdivision intended to be used for residential, industrial or commercial purposes, being a percentage set by the Council not exceeding 5 percent; or

(c) do a combination of (a) and (b) so that the total of the percentages required under (a) and (b) does not exceed 5 percent of the site value of all the land in the subdivision.

(1A) The Council may only make a public open space requirement if it considers that, as a result of the subdivision, there will be a need for more open space, having regard to-

(a) the existing and proposed use or development of the land;

(b) any likelihood that existing open space will be more intensively used after than before the subdivision;

(c) any existing or likely population density in the area of the subdivision and the effect of the subdivision on this;

(d) whether there are existing places of public resort or recreation in the neighbourhood of the subdivision, and the adequacy of these;

(e) how much of the land in the subdivision is likely to be used for places of resort and recreation for lot owners;

(f) any policies of the Council concerning the provision of places of public resort and recreation.

(1B) If a Council requires an applicant to pay or agree to pay an amount under subsection (1) -

(a) the amount must be paid before the Council issues its statement of compliance; and

(b) subject to paragraph (a), the time for payment of the amount is at the applicant's discretion; and

(c) despite paragraph (a), the whole or any part of the amount may be paid after the Council issues its statement of compliance if the applicant and the Council so agree under section 21(1)(b)(ii).

(2) In the case of a staged subdivision using the procedure under section 37-

(a) if an open space requirement is to be made, it must be made for the master plan, but may be expressed to apply to any particular stage or stages; and

(b) if the requirement applies to the second or a subsequent stage, the location of the open space need not be defined except on the plan for that stage; and

(c) if the requirement applies to the second or a subsequent stage and is a requirement to pay money, the total amount to be paid may be apportioned between particular stages, and the proportion need not be specified except for the plans of the appropriate stages.

(3) Land intended to be used for residential, industrial or commercial purposes includes land set aside on the plan of subdivision for roads or other reserves incidental or ancillary to the use of the land for residential, industrial or commercial purposes.

(4) The applicant may agree with the Council to set aside or pay a percentage other than the set percentage.

(5) A public open space requirement may be made only once in respect of any of the land to be subdivided whether the requirement was made before or after the commencement of this section, unless subsection (6) applies.

(6) A further open space requirement may only be made when a building is subdivided and a public open space requirement was not made under section 569H of the Local Government Act 1958 or section 21A of the Building Control Act 1981 when the building was constructed.

(7) If any amount is paid to the Council under this section and the Council is satisfied that it is no longer intended to subdivide the land to create any additional lot, the Council may refund the amount paid to it.

(8) A public open space requirement is not required if-

(a) the subdivision is of a class of subdivision that is exempted from the public open space requirement by the planning scheme; or

(b) the subdivision is for the purpose of excising land to be transferred to a public authority, Council or a Minister for a utility installation; or

(c) the subdivision subdivides land into two lots and the Council considers it unlikely that each lot will be further subdivided.

144 The comprehensive policy framework of the P&E Act, the VPPs and the Direction indicate that the use and development of land within a scheme is to be controlled and administered in accordance with the P&E Act. It was the Council and the Minister's case that the P&E Act was the source of power for the requirement of a POS contribution. The requirement of a POS contribution plainly falls within the planning objectives under the P&E Act. It is apparent from the content of the State Standard Provisions and Local Provisions in the VPPs and cl 52 that it is planning policy to seek to ensure that a subdivision does not occur without provision for POS.[56]

145 The landowner in his initial written submission contended that the provisions of the Subdivision Act created a comprehensive legislative regime and that by implication it was s 18 of the Subdivision Act which empowered the making of a POS requirement under a planning scheme. Hence it was said that cl 52.01 being a subordinate instrument could not qualify the rights given by s 18 which were incorporated into cl 52 and to the extent that they were inconsistent, they should be read down so as to bring them within power.[57] These contentions were obviously unsustainable. Following the filing of this submission the court invited further submissions on the basis that the empowering provisions of the P&E Act enlivened cl 52. The landowner in his supplementary submission then conceded that the broad power to 'regulate or prohibit' development contained in s 6 of the P&E Act was sufficient to empower POS requirements in a planning scheme but that the power must be read as subject to the specific provisions of ss 18-20 of the Subdivision Act. This suggested basis for construction fails to distinguish between the power conferred upon a council by s 18(1) to make a requirement for a POS contribution where none has been specified in the planning scheme, and the different power conferred by the P&E Act to prepare and create a planning scheme which includes a clause which specifies a POS contribution.

146 Clause 52 speaks of the obligation to contribute 'public open space in an amount specified in the schedule'. Clause 52 also provides that where 'no amount is specified' a contribution may still be required under s 18 of the Subdivision Act. These words correspond with the introductory words of s 18(1) which limit its scope of operation to the circumstance where a 'requirement of public open space is not specified in the planning scheme.'

147 The landowner referred to the explanation given in the Second Reading Speech as to the intended scope of the power under cl 52.[58] The Minister for Housing said:

Planning Schemes will be able to contain standards including lot sizes, siting controls, servicing and road construction standards and public open space contributions[59] ...

OPEN SPACE IN SUBDIVISIONS

The arrangements for provision of open space are an adaptation of the present Local Government Act provisions. Planning schemes may vary the percentage of open space that is to be provided in a subdivision, and a combination of cash and land may be contributed to allow a flexible approach to planning open space.[60]

148 These matters were also stated in the Explanatory Memorandum.[61] In the course of the Parliamentary debate following the Second Reading Speech there was discussion as to the flat rate of five per cent which was at that time to be included as part of the Bill.

149 The landowner submitted that cl 52.01 does not apply to this subdivision because ss 18(1) and 18 (1A) apply to confine a POS requirement under a planning scheme to circumstances where the subdivision creates an additional separately disposable parcel of land and a need for more open space. Quite apart from the erroneous assimilation of the distinct powers of the council to which I have referred, this submission also depends upon the soundness of the following part of the Tribunal's conclusion:

there is no lawful basis for a planning scheme requirement for an open space contribution in respect of a subdivision which does not increase the number of lots.

For a requirement to contribute open space to be a lawful requirement, a subdivision needs to be of a character that is likely to generate a need for more open space; otherwise, the requirement would be a mere tax.

Thus, in my opinion, the effect of the opening words in clause 52.01 of the planning scheme is to fix the percentage (in this case at 5% but which may be greater than 5%) of any contribution for open space, but to otherwise leave in place the provisions of the Subdivision Act as to the circumstances in which a contribution is required, the method of calculating the requirement and the trust in which the funds or land the subject of the contribution must be used.

150 The Tribunal justified this approach to construction on the basis that a planning scheme requirement for open space in respect of a subdivision would be unlawful unless the subdivision increased the number of lots so as to generate a need for more open space.[62] To find the planning scheme requirement to be within power the Tribunal found it necessary to interpret cl 52.01 as subject to the machinery provisions of the Subdivision Act so that the need for more open space would have to be established in every subdivision development. It appears that the Tribunal intended by the phrase 'otherwise leave in place the provisions of the Subdivision Act', that the limitation included in s 18(1) would apply to the planning scheme.

151 The landowner, relying upon the Tribunal view as to the invalidity of cl 52.01 in the event that ss 18(1) and 18(1)(A) were not to be read as an implied limitation on cl 52, argued that the potential invalidity supported the view that Parliament intended cl 52.01 to be subject to the limitations set out in s 18. [63] For reasons which hereafter appear I would reject the landowner's contention that clause 52.01 is invalid if it were not subject to the limitation contained in s18(1A). Even if the clause involved an excess of power, the landowner's approach to construction cannot be sustained.

152 Although delegated legislation should be interpreted where possible to avoid invalidity, cases like the present demonstrate the limits of that principle. Parliament's objective intention is to be ascertained from the meaning of the words understood in the light of the 'background, purposes and objects, and surrounding circumstances'.[64] The objectives of planning in Victoria and the purpose of the planning framework set out in the P&E Act, manifest Parliament's intent that they should be used in interpreting the provisions of the Act and planning schemes.[65] If the context in which the words are used[66] clearly indicates that given their plain meaning they will promote the purposes of the enabling Act (and any cognate statute) no adjustment of their ordinary meaning may be undertaken. If the clear meaning conforms to the declared objectives and purposes of the legislation, the meaning cannot be altered in a quest for validity or to produce what is thought to be a more equitable outcome. It is one thing to argue that cl 52.01 may be invalid either on the basis that it is so broad as to constitute a tax, or that it otherwise exceeds the power of its enabling legislation. It is another thing to say that such invalidity requires the provisions of the Subdivision Act to be construed as though they were intended to limit its scope, when the intent of Parliament, discerned from the language used and contextual considerations negates such a conclusion. Even if ambiguity or conflict did arise, the meaning is to be resolved in favour of a construction that gives effect to the underlying objects or purposes of the relevant legislation.[67]

153 I agree with the joint reasons that cl 52(1) is not to be read subject to the limitation in s 18(1) which only applies 'if a requirement for public open space is not specified in the planning scheme'. The precise terms in which the provision is expressed, the context of the provision within the Subdivision Act, and the purposes of that Act and the related P&E Act ineluctably leads to the conclusion that the Tribunal fell into error. It is for these and other reasons which hereafter appear that I am also of the opinion that cl 52.01 is not to be construed as subject to s 18(1A).

154 As I have said, it is only in the event that the schedule to the relevant scheme fails to specify the amount to be contributed for POS that, pursuant to the terms of cl 52.01 and s 18, a POS contribution may be required by the council acting in its capacity as a responsible authority under the scheme. That is the limited purpose of s 18(1) as made plain by its introductory words.

155 Clause 52.01 is expressed in clear and plain language. Clause 71 of the Scheme requires that its words be construed according to their ordinary meaning or by reference to any definition of those words in the Scheme or in the P&E Act. The words of cl 52.01 are in conformity with the Victorian Planning Policy to which I have referred. There is nothing in cl 52.01 to indicate there is a discretion. The clause is framed in mandatory language employing the term 'must'.[68]

156 The clause by affirmative words designates a course that the responsible authority should follow. The clause contains a number of qualifications. It is not expressed to be subject to any limitation in the Subdivision Act. As Dixon J observed in R v Wallis; Ex parte Employers Association of Wool Selling Brokers & H C Mckay Massey Harris Pty Ltd,[69] where a provision prescribes the course to be followed, that:

usually may be understood as importing a negative, namely that the same matter is not to be done according to some other course. This applies especially when the power or duty is affirmatively conferred or imposed is qualified by some condition, limitation or directions.

157 In my opinion the interpretation adopted by the Tribunal offended this approach to construction as does the approach proposed in the joint reasons. The words that it is proposed be read into the clause, impermissibly qualify the course designated by the affirmative words. The words to be read in to the clause, are not derived from the enabling legislation to the Scheme. No purpose, mischief, disharmony or anomaly has been identified which would justify such a construction. The words to be imported would impose significant limitations on the power conferred by cl 52.01 which changes its substantive effect. In my view, this amounts to rewriting the clause and exceeds 'the proper bounds of statutory interpretation.'[70] It traverses 'beyond interpretation to interpolation and therefore into an exercise of legislative power.'[71]

158 It would require a compelling context, clarity of purpose and clear language to read into a subordinate instrument made under one piece of legislation, words said to be derived from an interpretation of a different piece of legislation. Even if such an approach to construction were permissible, the language of cl 52.01 cannot accommodate an additional reference to the Subdivision Act. It already includes specific references to the Subdivision Act, which the maker of the planning scheme decided were necessary. Such a construction is the more difficult because the additional words proposed contradict the clear language of the first part of the clause.

159 Section 18 is concerned with a requirement made by the 'council' as the 'responsible authority' or 'referral authority' in a case specific circumstance where the planning scheme has not specified such a requirement. By contrast a planning scheme requirement (such as cl 52.01) is general in scope. The introductory words of s 18(1A) relate to the circumstance where a council may 'make a public open space requirement'. That circumstance is the one provided for in s 18(1). It arises where a 'requirement for public open space' is not specified in the planning scheme. It is the provisions of the Subdivision Act which by s 18(1) are subordinated to the provisions of the planning scheme. It is contrary to the plain meaning of the words in sub-ss (1) and (1A) that sub-s (1A) should be construed as also confining a requirement for POS under a planning scheme when that precise circumstance has been specifically excluded from the operation of sub-s(1).

160 The power contained in s 18(1) is to be exercised only when the preconditions are satisfied that there is no specified requirement for POS in the scheme and that the council has formed the view that there will be a need for more open space. The placement of s 18(1A) within s 18 as an adjunct to sub-s (1) confirms what the language makes unambiguously clear; that s 18(1A) qualifies only the exercise of the residual power in s 18(1). The language employed provides no support for the view that the scope of sub-s (1A) was intended to extend to the exercise of powers under the P&E Act.

161 The language chosen by the legislature is significant. The words of s 18(1A) refer to the power of a council to 'make' a public open space 'requirement' being the same exercise of power referred to in s 18(1) - that the council 'may require' a POS requirement. Section 18 refers only to the requirement for a POS contribution which the council 'may require'[72] or 'make'[73] or which is 'to be made'.[74] The heading to s 18 states - 'Council may require public open space.' This further indicates that the purpose of the section is concerned with the circumstance contemplated by the introductory words of s 18(1) and the words in cl 52.01. That is to say, where no amount of POS is specified in the planning scheme. Unlike the power conferred by s 18(1), a council does not 'make' a POS requirement under cl 52.01 of the Scheme. The planning authority under the P&E Act may be the Minister or the Municipal Council.[75] Though a condition requiring a POS contribution may be placed on a permit, the requirement for the contribution arises directly from the scheme itself and not from the condition[76] or any requirement of a council. Neither the planning authority or responsible authority 'makes' or 'requires' a POS contribution under a planning scheme. Properly understood, such an obligation arises from the Scheme itself and not by an independent 'requirement' of any entity. The council 'make[s]' no such a requirement. Neither the P&E Act nor the Subdivision Act speaks in terms of a council 'making' a POS requirement under a planning scheme. It is 'specified' in the planning scheme which imposes the contribution on developers. The POS requirement in the scheme operates of its own force once the planning scheme has been prepared and made. Such a POS clause forms part of the planning scheme by force of statute as it is required to conform with the VPP and is included in compliance with the Direction.

162 If Parliament had intended s 18(1A) to limit the POS requirement 'specified in a planning scheme,' quite different language would have been used. Such an intention would have involved a profound change in planning policy. There is a circularity of reasoning in the landowner's contention that the purpose which supports his construction of sub-s (1A) is to be found within s 18(1A). No other text of the Subdivision Act is said to indicate that sub-s (1A) is to apply to delegated legislation made under separate enabling legislation.

163 In support of an interpretation of s 18(1A) that would see that provision limit a POS obligation under a Planning Scheme, it is said that an implication is to be drawn from the words of limitation contained in a related section, s 18(1B). That section is expressed to apply only where 'a Council requires an applicant to pay or agree to pay an amount under subsection (1)' (emphasis mine). It is said to be significant that s 18(1A) neither contains such an express reference back to sub-s (1)[77] or the phrase 'if a requirement for POS is not specified in the planning scheme'. I do not consider the absence of such references to be evidence of an intention on the part of the legislature to give s 18(1A) a scope that is broader than s 18(1), thereby encompassing POS requirements made under a planning scheme. These submissions proceed upon a misconception as to the relationship between s 18(1) and s 18(1A). The power is conferred by s 18(1). Sub-section 1(A) limits that power by adding a further precondition to its exercise. The power is enlivened once the condition in s 18(1) is satisfied. In my view it was quite unnecessary for the legislature to have repeated the precondition from sub-s (1) or to have referred back to it in s 18(1A). The use of the same terminology in s 18(1A) and s 18(1) provides the strongest indication that sub-s (1A) was only intended to apply to a requirement under sub-s (1). Moreover, the introductory words of sub-s (1B), following sub-s (1A), provide further context in which to construe sub-s (1A). They reinforce the purpose and meaning of each part of sub-s (1), namely that they are intended to operate where the council makes a requirement under s 18(1) and not where POS has been specified in a planning scheme.

164 Sub-section (1B) was introduced two years after sub-s (1A) .[78] The obvious explanation for the words 'pay or agree to pay an amount under sub-s (1)' in sub-s (1B) is that they were intended to relate to the council requirement 'to pay or agree to pay' (something that may occur in any number of ways)[79] in s 18(1)(b). It would be strange if sub-s (1A) was to have a broad application and sub-s (1B) a narrow one. There is nothing in the subject-matter of sub-s (1B) that marks that sub-section out for particular limitation. Section 18(1B) rather serves to confirm Parliament's intent that sub-s (1A) is limited in the same way.

165 The VPP which deals with a POS contribution has been formulated on the assumption that s 18 does not apply to POS requirements under a scheme, hence the final sentence of the first paragraph of cl 52.01 which permits a council to require a POS contribution pursuant to s 18 where no percentage is fixed in the schedule. Clause 52.01 thus identifies the only circumstance in which s 18 may operate where a requirement for POS has been made under a planning scheme. Accordingly s 18 has until now been viewed as a default provision which is only enlivened when no POS contribution has been specified in the planning scheme.[80]

166 There is no conflict between the requirements of s 18(1A) and the scope and purpose of cl 52 unless one assumes that they both relate to the exercise of the same power in the same circumstance - the very thing in dispute. As all parties acknowledge, s 18(1) expressly contemplates that the power to establish a planning scheme carries with it a power to include a general POS requirement within that scheme. Sub-section 18(1A) is directed towards site specific considerations which are to be applied in an individual case and involve a specific evaluation of the circumstances of each particular piece of land and subdivision. A planning scheme, by contrast, must by definition create rules of general planning application.

Context of other provisions of Subdivision Act

167 The Explanatory Memorandum provided by the Minister for Planning and Environment in outlining the draft of the Subdivision Bill, to which the landowner made reference in his submissions, commences with a foreword by the Minister which says:

Local Councils and referral authorities will now need to consider subdivision proposals within a wider context and make key policy and servicing decisions at the planning stage. The processes in the Subdivision Act itself are almost exclusively administrative. The Act merely sets out the procedures to be followed by councils in certifying plans and issuing statements of compliance.[81]

168 The Explanatory Memorandum refers to 'clauses 18-20 - Public open space provisions' as enabling planning schemes to vary the percentage of open space to be provided in a subdivision.[82] It explains that by clause 22 provision is made for POS to automatically vest in the municipalities and that a statement of compliance must be issued when the owner has complied with all conditions of a planning scheme.

169 The User's Guide to the new Act, also put out by the Department and which was also relied upon by the parties, sets out at the commencement that subdivisions are now 'controlled through the planning system,'[83] that contributions for up to five per cent for POS may be required on subdivisions,[84] that the council must use the funds and land received as part of a POS requirement for that purpose.[85] The User's Guide and Explanatory Memorandum assume that the ss 19-21 will apply to POS contributions required under a planning scheme.

170 The landowner submits that if s 18A did not apply to a requirement for POS under a planning scheme, no other part of ss 18-21 of the Subdivision Act could apply to a planning scheme. This, it was said, would be anomalous and tends to suggest that all of ss 18-21 must apply. The submission must be rejected. The first premise of that argument is unsound. It does not follow that, because s 18A will not apply to a POS contribution under a planning scheme, the Council as the responsible authority under the Scheme does not have the necessary power to do such things as are provided for in the balance of s 18 or that ss 19-21 of the Subdivision Act cannot apply to a planning scheme.

171 Although it is unnecessary to express a concluded view on this question, as it was not the subject of any extensive argument, I see no reason to doubt, the application of ss 19-21 to a council acting under the planning scheme. The Minister submitted that such provisions would apply. Section 19 provides for the valuation of land for public open space; s 20 provides restrictions on what a council may do with POS; and s 21 places an obligation on a council to issue a statement of compliance to the applicant. These provisions, unlike s 18(1) do not expressly subordinate themselves to a planning scheme, nor are they linked to s 18. They do not employ language such as appears in s 18(1A) to indicate that they are only intended to operate where s 18(1) is enlivened. Neither do any parts of cl 52 conflict with or exclude the operation of ss 19-21. These are sections of general application. No improbable, anomalous or inconvenient results have in my view been identified which suggest that an alternative construction from the plain meaning of the words would more closely conform with the legislative intent.[86]

172 It is not in doubt that sub-s (1A) and the following sub-sections of s 18 operate to regulate the circumstances in which a council may make a POS requirement under s 18(1). These sub-sections individually provide limitations on the power of the council to make a POS requirement where it has not been specified in the planning scheme. But the appellant relied upon the Tribunal view that it would be anomalous if the various sub-sections of s 18 applied to a council exercising the power under s 18(1) but not to a responsible authority acting pursuant to its general power to make a planning scheme under the P&E Act. The argument also contains the implicit assumption that if s18(1A) were not to apply, then neither would the other parts of s18. It was not contended by the Council or the Minister on the appeal that sub-s (2) to (8) of s 18 could not apply to a POS requirement under a planning scheme. Consequently there was no specific examination of the other sub-sections of s 18 by any of the parties. As I have already stated, I consider it undesirable to express any concluded view on this issue without the benefit of full argument.

173 It is necessary to address the view that it would produce an anomalous result if the other parts of s 18 did not apply to a planning scheme thereby lending support to the conclusion that s18(1A) must also apply. If parts of s18 did not apply to a planning scheme, no 'practical difficulty[87]' or 'pervisity'[88] would arise which would in my opinion compel a construction which does not conform with the plain meaning of the words in their context. Each of the relevant limitations or powers contained in sub-ss (2) to (8), with the possible exception of sub-s (3), either appears in cl 52.01 as a result of the mandatory conformity of planning schemes with VPPs or applies in any event to a responsible authority as a necessary incident of the broad power to make and administer a planning scheme under the P&E Act. The breadth of any incidental powers is confined by the requirement that they be reasonably capable of being related to the function which the council is exercising as ascertained by a consideration of the scheme and the P&E Act.[89]

174 Section 18(2) makes provision for 'staged subdivisions' 'if a public open space requirement is to be made'. These introductory words tend to reinforce the conclusion that this provision relates to the power exercised by a council under s 18(1). In any event, each of the discretionary powers specified in s 18(2)(a), (b) and (c) would be available to a responsible authority as a necessary incident of its obligation to 'efficiently administer' and 'implement the objectives' of the scheme as required by s 14(a) and (b) of the P&E Act. Arguably the responsible authority may be entitled to regard land under the Scheme as the same as land under s 18(3), notwithstanding that by cl 71 of the Scheme it is expressly stated that its terms shall have their ordinary meaning unless defined by the Scheme or the P&E Act. These questions were not the subject of analysis on appeal and I express no concluded view.

175 Section 18(4) provides that 'the applicant' may agree with the council to set aside or pay a percentage other than the set percentage. The reference to the 'set percentage' is a reference to an amount 'set' pursuant to s 18(1)(a). This would also lend support to a conclusion that these sub-sections were not intended to operate in relation to a general power to make a POS requirement part of a planning scheme under the P&E Act. I do not stay to consider whether the arrangement contemplated by this provision could be available to a responsible authority administering and implementing the objectives of a planning scheme as it has not been the subject of any argument.

176 Sub-section (5) in combination with sub-s (6) provides that (subject to certain circumstances involving a building subdivision) a POS requirement may be made only once in respect of any land to be subdivided. This limitation also appears in cl 52.01. The terms of this limitation are prescribed by the VPPs and its inclusion in the Scheme is mandated by the Ministerial Direction. If the limitations in cl 52.01 which are the same as s 18(5) and s 18(6) had not been stated in the VPPs, a responsible authority purporting to impose a POS requirement twice on a particular piece of land in a subdivision would be required to show that this was for a planning purpose and that it was reasonably proportionate, otherwise that particular requirement would be invalid.

177 Sub-section (7) provides the council with a discretionary power to refund amounts paid, where the council is satisfied that it is no longer intended to subdivide the land to create any additional lot. This power would plainly be a necessary incident of the power to administer a planning scheme in which the POS had been specified.

178 Sub-section (8) provides three circumstances in which a POS requirement is not required. The first is where the subdivision is of a class of subdivision that is exempted by the relevant planning scheme. Its only relevance to the present argument is that it further subordinates the power under s 18(1) to the express terms of the planning scheme. The second is where the subdivision is for the purpose of excising land to be transferred to a public authority, council, or a Minister for a utility installation. The third is where the subdivision subdivides land into two lots and the council considers it unlikely that each lot will be further subdivided. This third condition is also to be found in cl 52 as it is a mandatory requirement of the VPPs. As I have said, the power to impose a POS requirement as part of a planning scheme will be limited by the requirement that the power be exercised for a planning purpose.

179 If cl 52 was to be read as subject to s 18, it would have been unnecessary to set out the limitations and exemptions contained in cl 52 which are identical to s 18(5), s 18(6) and s 18(8). I am unable to agree with the view expressed in the joint reasons that the presence in clause 52.01 of matters that are replicated in s18 tends to support the conclusion that by implication s18(1A) also applies to clause 52.01. The fact that these limitations are specified in every planning scheme lends support for the conclusion that Parliament had not intended by the enactment of s18(1A) that its limitations were to be applied to a planning scheme. The qualifications to the power conferred by cl 52.01 support the construction that the power is to be exercised in the manner designated in that clause subject only to the qualifications there specified.

180 Those parts of s 18 which are not also to be found in cl 52.01 do not give rise to an anomaly which would compel a construction of s 18(1A) which departs from the meaning that its application is confined to the power which a council may exercise under sub-s (1). One could reach a similar conclusion with respect to the other parts of s18. Subject to the possible exception discussed above, all of the powers and limitations specified in s 18 are probably available to a responsible authority under a planning scheme. They either appear in the VPPs or are a necessary incident of the powers conferred upon a responsible authority in implementing and administering a POS requirement. The language of the entirety of s 18, including s 18(8), is consistent with the plain meaning of s 18(1A), that the scope of operation of s 18 is confined to the making of a POS requirement by a council under s 18(1).

181 The joint reasons express the view that there is no statutory bar to prevent the removal of the existing qualifications in cl 52.01. This is said to provide further support for the argument that the limitations in s 18 are to be imported into cl 52. In my opinion, such an argument assumes that which is in issue - that cl 52 and s 18 are concerned with the exercise of the same power in the same circumstance. Moreover, the argument does not recognise the legislative controls which restrict the ability to remove such clauses from planning scheme provisions. Clause 52, like many other clauses in the Scheme, is mandated by the content of the VPPs. They receive considerable statutory protection. They must be included in every scheme in compliance with the Direction and must be in conformity with the VPPs. The qualifications could only be removed by amending the form of the relevant VPP. Any amendment to the VPPs is treated under the P &E Act as an amendment to a planning scheme[90] and must be the subject of approval by the Minister[91] and must be published by prescribed Notice[92]. Such Notice must be laid before both Houses of Parliament and may be revoked by either House.[93]

182 The landowner invoked s 35(a) of the Interpretation of Legislation Act 1984 (Vic) in support of the proposition that to the extent that cl 52 appears to be inconsistent, it must be read down to permit a consistent interpretation. There is nothing in this point. It is premised upon a finding of inconsistency. To construe the words according to their plain meaning in the context in which they are used and having regard to their legislative purpose, creates no inconsistency between cl 52 and the Subdivision Act. Clause 52 is made pursuant to a general power to make a planning scheme. Section 18(1A) as I have said, is enlivened where a council makes a POS requirement where the planning scheme does not do so. These are powers which fall to be exercised in a different manner in different circumstances. The presence of limitations on power in one setting does not give rise to any inconsistency in the way in which a power should be exercised in a different setting where such limitations are absent.

The legislative history of the P&E Act and the Subdivision Act

183 The landowner relies upon the view expressed by the Tribunal, that the legislative history of POS contributions supports the conclusion that the power in cl 52.01 is to be subordinated to the terms of the ss 18-20 of the Subdivision Act. The joint reasons express the view that the sequence of the legislation evinces a Parliamentary intention that s18(1A) would apply to planning schemes. In my opinion the legislative history of the P&E Act and the Subdivision Act and the extrinsic materials to which we have been referred strongly support the opposite the opposite conclusion. They indicate that a broad power was conferred under the P&E Act for the purposes of expanding, rather than confining, the then existing circumstances in which a POS contribution could be required under a planning scheme and that the legislature has identified those provisions in the Subdivision Act which are to apply to planning schemes.

The Law Preceding s 18(1A) of the Subdivision Act 1988

184 The predecessor to the Subdivision Act 1988 was the Local Government Act 1958 (Vic) ('the LG Act').

185 The express power of a council to require the provision of POS (or payment in lieu thereof) on the subdivision of land was introduced into the LG Act in the form of s 569B(8A), which came into operation on 1 June 1967.

186 Section 569B(8A) as introduced in 1967 provided:

Where a plan divides land into more than two parts and in the opinion of the council relates to land any portion of which will be used for residential purposes the council may request the owner of the land either -

to execute an agreement under seal to transfer to the counsel for a place or places of public resort and recreation a portion or portions of the land which in the opinion of the counsel will be used solely for residential purposes and for access thereto being not greater in area than one-twentieth part of the total area of the land being subdivided for residential purposes; or

to pay to the council or give to the council security to its satisfaction for an amount not greater than one-twentieth part of the fair market value of the land referred to in paragraph (a) -

and if the owner of the land does not comply with the request the council may refuse to cause the plan to be sealed.

187 In 1971, the power in s 569B(8A) was widened to apply when there was a proposed or existing industrial or commercial use of a portion of the land in the subdivision. There was no provision equivalent to s 18(1A) of the Subdivision Act. In Paul v City of Melbourne,[94] the tribunal set out a (non-exhaustive) test for the application of the discretion of a council under s 569B(8A) to request a POS contribution. It said:

The key consideration must be the increased need for places of public resort and recreation as a result of the subdivision. This is so whether the increased need is caused by an intensification of the use of the land or a change in the use of the land.[95]

188 The tribunal then proceeded to list the following factors as relevant when deciding if a proposed subdivision would result in such an increased need:

The intensity with which the land is likely to be used or developed as a result of the subdivision, especially when compared with the intensity with which the land is used before the approval of the subdivision;

the nature of the use of development of the land that is likely to result from the subdivision, the existing or likely population density in the area and the effect of the proposed subdivision on that density;

the location of the land in relation to nearby places of public resort and recreation, taking into account the quality of such places of public resort and recreation;

the amount of space on the land likely to be devoted to places of private resort and recreation.

He also regarded it relevant to consider any policy adopted by the Council as to the reasonable requirements of its area for places of public resort and recreation.[96]

189 On 30 October 1989, s 18 of the Subdivision Act came into operation. Section 569B(8A) was repealed on 23 January 1991. As already noted, s 18 of the Subdivision Act provided that if a requirement for public open space is not specified in the planning scheme, a council may nonetheless require a POS contribution, pursuant to the terms of the Subdivision Act.

190 Section 18(1A) was inserted into the Subdivision Act later, coming into operation on 25 June 1991. The Explanatory Memorandum to the amending Act contains no suggestion that this provision was intended to apply to POS requirements in planning schemes. It followed the introduction of the P&E Act which contained the extensive planning framework for planning schemes. The amending Act while introducing s18(1A) also made amendments to the P&E Act in which it made cross references to various provisions of the Subdivision Act but did not seek to link s 18(1A) to the provisions of the P& E Act.

191 The predecessor to the P&E Act was the Town and Country Planning Act 1961 ('the T & CP Act').

192 Section 9 of the T & CP Act provided a council with the power to make a planning scheme 'in accordance with the provisions of this Act with respect to any land'. Sub-section 9(2) provided that a planning scheme 'may make provision for all or any of the matters referred to in the Third Schedule to this Act'.

193 The Third Schedule, entitled 'Matters which may be provided for in Schemes', contained a list of 14 matters. None of these matters referred to the imposition of POS requirements in relation to subdivisions. It appears from decisions that considered s 9 that before the introduction of the P&E Act, municipal councils relied on the power in s 569B(8A) of the LG Act to require POS contributions in relation to the granting of individual permits. The power conferred by s 9(2) of the T &CP Act was not regarded as broad enough to permit the inclusion of such requirements in a planning scheme.

194 Section 6 of the P&E Act came into operation on 16 February 1988. At the same time the relevant parts of s 9 of the T &CP Act were repealed.

195 The introduction of the P&E Act and the Subdivision Act in 1987 and 1988 respectively constituted significant changes in the law. The wording of s 569B(8A) of the LG Act and s 18(1) of the Subdivision Act was quite different. The introductory words of s 18(1) confine the operation of that section, and give recognition to the fact that the provision of POS requirements may be made within the planning schemes. Section 569B(8A) had clearly not been so limited. Almost simultaneously with the repeal of the LG Act provisions, the more limited provisions of the T &CP Act were replaced by the broad terms of the P&E Act, allowing for the provision of POS requirements in planning schemes.

196 The P&E Act which came first in time uses language that has an over-arching character, supporting the planning framework for Victoria. The Subdivision Act of the following year had a 'residual' operation where POS was not covered by the planning scheme. When s 18(1) was enacted there was nothing to suggest that the clause 52.01 was to be read as subject to any limitation in the Subdivision Act concerning POS. The history of the legislation is part of the context against which the introduction of s 18(1A), three years later, should be viewed. I consider it very unlikely that Parliament intended to add to the express residual provision of s18(1), a provision which would over-ride the POS contribution specified in planning schemes. As I have said, s 18(1A) was inserted into the Subdivision Act by the same Act[97] as inserted the references to the Subdivision Act in s 6(2) of the P&E Act. Significantly no provision was made in either the P&E Act or the Subdivision Act to link s 18(1A) to planning schemes or to otherwise indicate that it was to have some scope of operation in relation to the P&E Act.

197 The changes to the law expanding the planning and environment powers so as to permit POS requirements to be specified in planning schemes and reducing the circumstances in which a POS requirement may otherwise be made for a subdivision, are inconsistent with the view that it was the legislature's intent that the general power conferred by the P&E Act should be constrained by the requirements of s 18(1A) of the Subdivision Act. The historical context and sequence of the subject legislation militates against the landowner's argument on construction.

Authority on whether cl 52.01 is subordinate to the Subdivision Act regime.

198 Such authorities as have previously considered this question, though not binding, persuasively support the conclusion that the P&E Act and cl 52.01 are not subordinate to the Subdivision Act. In Monash City Council v Pellicano Builders Pty Ltd[98], Osborn J stated that 's 18 subordinates a general power to impose a requirement for public open space upon subdivision, to the provisions of a planning scheme'.[99] In Tucker v Mornington Peninsula SC (No 3),[100] the Tribunal rejected an argument, similar to that raised by the landowner, that words from s 18 should be read into cl 52.01. In the course of considering the POS requirement in cl 52.01 of the Mornington Peninsula Planning Scheme, the Tribunal said:

Section 18 SD Act has been largely, but not completely, superseded by cl.52.01 in the various Victorian planning schemes based on the Victorian Planning Provisions (VPPs) under the P&E Act 1987 (PE Act). Section 18 still has a default function where, as under some planning schemes, cl.52.01 does not operate.

Section 18 always contemplated that it would be superseded or relegated to a default provision by planning scheme provisions. Section 18(1) commences by saying:

If a requirement for public open space is not specified in the planning scheme ...[101]

[Clause 52.01 of the Mornington Peninsula Planning scheme] differs from s 18 in various ways. Section 18 contains some discretions to be exercised by the council which do not appear in clause 52.01.

The first of these is that s 18 grants the council a discretion as to whether any public open space contribution will be required. That discretion does not appear in clause 52.01. If the land is to be subdivided and intended to be used for residential, industrial or commercial purposes, then the contribution 'must' be made. Section 18 says 'may', in place of 'must'.

As I have said, the schedule to clause 52.01 in the Mornington Peninsula planning scheme does specify an amount namely 5%. It specifies the flat amount of 5%. It does not say up to 5% or not more than 5%, as was the case with s 18. Although I think a schedule to clause 52.01 would be able to provide for a discretionary requirement just as it might specify some percentage other than 5, this one does not. The effect is that, so far as Mornington Peninsula Shire is concerned, there is no discretion as to the amount. It is 5% where the requirement applies. Section 18 refers to a percentage not exceeding 5%. The same was true under the LG Act.

In the above quotation of the first paragraph of cl.52.01 there is reference to s 18 SD Act, but only to note that it is a default provision. In the absence of any further references to s 18 SD Act in cl.52.01 (there is a further reference) this would mean that, so far as Mornington Peninsula Shire Council is concerned, s 18 does not apply.[102]

199 In Parsons v Glen Eira CC (Red dot),[103] the Tribunal again followed this approach to construing the relationship between s 18 and cl 52.01, characterising cl 52.01 as 'a successor to s 18 of the Subdivision Act 1988' and s 18 as a default provision which would only apply if cl 52.01 did not operate.[104] It rejected the argument that the mandatory requirement of a POS contribution in cl 52.01 was unfair,[105] and referred to the observation of the President of VCAT in Grochowski v Glen Eira CC[106] to the effect that where an amount is specified in the planning scheme, there is no discretion, it being necessary to determine the meaning of the planning scheme provisions and apply them.[107]

The relationship between the Subdivision Act and the P&E Act

200 The landowner contends that the Subdivision Act and the P&E Act and the Scheme, being cognate legislation must be read together, thereby producing the result that the power to make a requirement for POS under a planning scheme is subject to the machinery provisions of s 18 of the Subdivision Act. In this alternate way, the landowner contends that the broad power to 'regulate or prohibit' development provided by s 6(2)(b) of the P&E Act is limited by the specialist regime created by ss 18-20 of the Subdivision Act.

201 The landowner relied upon the principle expressed in the joint judgment of Gavan Duffy CJ and Dixon J in Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia who said:

When the Legislature explicitly gives a power by a particular provision which prescribes the mode in which it shall be exercised and the conditions and restrictions which must be observed, it excludes the operation of general provisions in the same instrument which might otherwise have been relied upon for the same power.[108]

202 While conceding that there is some debate about the continued validity of this principle,[109] the landowner contended that to the extent that it applies, the cognate nature of the two Acts rendered them liable to be considered the same instrument for these purposes. In addressing this argument I would not wish to be understood as necessarily agreeing that the two Acts should be treated as the same instrument for the purpose of the rule. The rationale for the rule rests upon the presumption that the legislature, having prescribed a particular mode for the exercise of the power, by its very specificity suggests that the same power expressed in more general language in the same statute should be narrowly construed to be consistent with the specific. The subject provisions are not within the same legislation and they were enacted at different times.

203 Where the different Acts are cognate legislation, one should strive to give their provisions a harmonious construction that gives effect to the purposes and objects of the legislative regime. That may necessitate reading down the manner in which a general power in one Act should be exercised where the circumstances of its exercise are the subject of limitation in the other and where it is clear that the limitations relate to the circumstances in which the more generally expressed power should be exercised.

204 That is not the present case. The landowner's submission rests on the fallacy that the provisions with which we are presently concerned involve an exercise of the same power, by the same entity in the same circumstances. The legislative provisions and the terms of the Scheme with which we are concerned involve the exercise of different powers in different settings. In one case a planning or responsible authority prepares and establishes a planning scheme which specifies a POS contribution. In the other a council makes a POS requirement for a particular subdivision when a POS requirement is not specified in the planning scheme and where a need for more open space is established.

205 The approach to the construction of separate but related legislation, which the joint reasons draws upon is found in a passage from the judgment of Kirby P in Commissioner of Stamp Duties v Permanent Trustee Company Limited[110] in which his Honour spoke of the assumption that should be made that Parliament intended its legislation to operate rationally, efficiently and justly together. The context in which Kirby P made these observations illustrates that the court does not have an unfettered right to search for an 'efficient and just operation' of inter-reliant legislation. Kirby P resorted to such an approach in order to give meaning to all of the words because he considered there to be 'competing or conflicting' provisions which did not 'submit to neat reconciliation.' Priestly JA, with whom Samuels JA agreed, considered the words of the each of the four relevant statutes to have a fairly obvious meaning which they should be given.[111]

206 It is a strong thing to read words into a statute and in the absence of a clear necessity it should not be done.[112] There must be a clear indication of Parliament's intention that words should be read into a statutory provision to render it subordinate to another piece of legislation even where the two Acts are in some respects inter-related. That principle is also apposite where it is said that the provisions of one statute should be read into delegated legislation made pursuant to a different enabling Act. Even where the conditions do exist which warrant a search for a rational, efficient and just operation of the integrated legislation, the outcome should be one which accords with Parliament's intention.

207 I do not consider that to construe s 18 and cl 52.01 according to their ordinary and plain meaning gives rise to any inconsistency or ambiguity between the two pieces of legislation. An examination of the P&E Act shows that Parliament considered the circumstances in which the two Acts should operate 'conjunctively' and has made numerous specific references to when that is to occur.[113] Consideration of their context does not give rise to any 'improbable or inconvenient' outcome. There is no conflict of purpose between the provisions which would require their meaning to be adjusted to achieve their reconciliation.[114] In my view an examination of the cognate legislation does not provide any support for the contention that an alternative construction to the plain meaning of the subject provisions should be preferred.[115] To pursue what some may consider to be the most rational, desirable and equitable regime, over-reaches the permissible boundaries of statutory construction.

208 I would also allow the appeal on the ground that the scope of cl 52 is not to be confined by s 18(1A) of the Subdivision Act. That purpose has been reflected in the clear and unambiguous language employed. Such a construction conforms with the objects and purpose of the P&E Act and the Subdivision Act and the planning framework. Every relevant aspect of context is consistent with that purpose. Giving effect to the plain meaning of the words achieves Parliament's intended outcome that a planning scheme may impose a mandatory and fixed rate POS contribution on all subdivisions of land that are regulated by the planning schemes.

Is clause 52.01 invalid as beyond power or as constituting a tax?

209 If cl 52 is not confined, is it consequentially invalid on the basis that it constitutes a tax or is otherwise outside the power?

210 The validity of cl 52.01 of the planning scheme was not raised by the landowner before the Tribunal although the Tribunal adverted to it. It was the subject of extensive argument on appeal, the landowner submitting that if the appellant's and the Minister's construction prevailed, clause 52.01 would be invalid. It was not disputed that this court may consider the validity of delegated legislation, even where the parties involved did not raise issues as to its validity at first instance.[116]

211 On appeal, the landowner maintained that if cl 52 was to operate without the limitations expressed in ss 18(1) or 18(1A), the consequence is that cl 52 would be unenforceable because it would encompass circumstances where the relevant subdivision would create no additional need for public open space. The clause would be invalid as ultra-vires the powers given to a 'responsible authority' under the P&E Act. It was further submitted, that such a general requirement would be unenforceable as a 'mere tax'. This was the conclusion reached by the Tribunal which held that a requirement in a planning scheme for an open space contribution in respect of a subdivision which does not increase the number of lots was unlawful as such a requirement would be a mere tax.

212 It is necessary to consider whether cl 52, in its unfettered form, constitutes a valid exercise of the power to make a requirement for POS in a planning scheme.

The test for validity- the purposive approach

213 It is accepted by all parties that in determining the question of validity of the clause, it is necessary to take 'a purposive approach' to construing the legislation.[117] The joint judgment of the High Court in Bathurst City Council v PWC Properties Pty Ltd[118] referred to the following passage from the judgment of Walsh J in Allen Commercial Pty Ltd v North Sydney Municipal Council[119] in which he identified the characteristics which attended the exercise of a council power, the purpose of which was to implement planning policy:

not as giving an unlimited discretion as to the conditions which may be imposed, but as conferring a power to impose conditions which are reasonably capable of being regarded as related to the purpose for which the function of the authority is being exercised as ascertained from a consideration of the Scheme and of the Act under which it is made. This purpose may be conveniently described in accordance with the expression used by Lord Jenkins in Fawcett Properties Ltd v Buckingham County Council [1961] AC 636 at 684 as being 'the implementation of planning policy', provided that it is borne in mind that it is from the Act and from any relevant provisions of the Ordinance, and not from some preconceived general notation of that constitutes planning, that the scope of planning policy is to be ascertained.

214 In Bathurst the High Court referred with approval to the passage from the judgment of Glass JA in Rockdale Municipal Council v Tandel,[120] in which he stated that the purpose, namely the 'implementation of planning policy' is to be gleaned from the Act and the scheme and 'not from some preconceived general notion of what constitutes planning.'

215 Accepting that the power must be exercised for a planning purpose of the P&E Act, the Council, and the Minister's submission that cl 52.01 constitutes a valid exercise of the power contained in s 6(1) of the P&E Act was not challenged. The phrase 'regulate or prohibit the use or development of any land' in s 6(2)(b) of the P&E Act, as the landowner rightly acknowledges, is broad enough to encompass POS requirements in a planning scheme.[121] 'Development' is defined by the P&E Act to include subdivision. There must be a direct and substantial connection between the likely operation of the clause and the statutory object which it serves.[122] The provision for POS is consistent with the planning purposes of the P&E Act as there is a clear connection between subdivision of land and the need for POS. The provision of POS sounds against each of the objectives in s 4 which I have earlier set out and in particular ss 4(a), (c) and (g). Clause 52.01 serves these planning purposes. The Subdivision Act proceeds upon the legislative understanding that cl 52.01 is a valid exercise of statutory power. Unsurprisingly it has been repeatedly held in planning cases that the requirement for POS serves a planning purpose.[123]

216 The Council acknowledged that the P&E Act does not authorise the inclusion of a requirement in a planning scheme to pay money for the general purpose of raising revenue. The Scheme, as delegated legislation under that Act, is subject to the same principle and in the absence of clear authority to do so, a body exercising delegated legislative authority has no right to impose a charge. It would be lawful for the subordinate legislation to require the payment of a fee for a service, provided that the fee is not disproportionate and is referable to the purpose for which the fee is collected.

217 The validity of a clause in a Planning Scheme is to be determined by reference to the 'planning purpose'. To be valid, a clause must be capable of being considered 'reasonably proportionate to the pursuit of the enabling purpose'.[124] The landowner contends that cl 52.01 is not reasonably proportionate to the purpose it purports to serve, as the imposition of a flat rate lacks a sufficient nexus with the need for public open space. While the landowner eschewed any challenge to the reasonableness of the figure of five per cent, he submitted that the clause was too broad to be valid because it applies to each subdivision, irrespective of whether that subdivision increases the demand for POS.

218 The Minister submits that provision for a broad inflexible charge is justifiable. He contended that there was a legitimate connection between the five per cent figure for contribution and the POS needs generated by subdivisions across the municipality. He conceded that it will not always be possible at the planning stage of a subdivision to determine whether or not that subdivision will create a need for POS but that any resulting inequities arising from a flat rate must be suffered in favour of the benefits of certainty.

219 The landowner submitted in response that this would only justify an arbitrary rule in relation to those subdivisions where it would be difficult to determine whether it is possible that the subdivision will create a need for POS. He submitted that there was nothing in the legislative text or extrinsic aids to interpretation that permitted a conclusion to be reached that Parliament intended that certainty should be favoured over equity. This submission cannot be accepted. It is the very nature of a planning scheme that policy decisions be made and that these decisions be of general application. The principle behind cl 52.01 was to adopt a policy of general effect. The Tribunal helpfully referred to the policy underlying the mandatory POS requirement in planning scheme expressed in these terms in Tucker v Mornington Peninsula Shire Council:[125]

I think it is true that greater flexibility and more discretion enables what might be described as a more fine grained degree of equity than if the relevant statutory provisions allow less flexibility. Of course, the ultimate in mathematical equity, or a descent to the finest distinctions, may lose reasonableness under layers of complication. It is not for me to decide that the law is wrong in the balance it strikes between flexibility on the one hand and clarity and certainty on the other. It is clear that cl.52.01 strikes a different balance to s 18 SD Act. The removal of s 18 discretions means a simpler and clearer regime with no scope for arguments, for example, as to whether a requirement should be imposed at all, and if so, as to how great the requirement should be up to a limit of 5%. I think that is the intention of the new provisions in the planning scheme made under the PE Act. Section 18 SD Act defers to them, and only supplies a default where they have not been implemented.[126]

220 The Subdivision Act expressly contemplates in s 18(1) that a planning scheme made under the P&E Act may contain a POS requirement containing a fixed percentage contribution - an obligation that will be applicable broadly across the municipality in the case of all subdivisions. The VPPs and the Direction which have statutory force contemplate a fixed percentage contribution requirement within planning schemes. The planning policy which Parliament has adopted is one in favour of general certainty for POS, rather than a flexible, case by case, approach.

221 The Minister submits that the POS contribution is proportionate as it will generally be the case that a subdivision of land will enable the more efficient use of the land, usually, but not always by the creation of additional lots, and will therefore create a higher demand for public open space. The Minister concedes that there are possible exceptions where the land in the subdivision may not be taken up for a residential purpose, where it may comprise smaller households leading to an overall population decline in the relevant planning unit, where it may be taken up by a demographic with less open space needs, or where a larger building on one block may be used for an intensive institutional use, whereas a subdivision of that land may lead to a less intense use. Any potential inequity arising from the mandatory requirement for POS must, the Minister submitted, be balanced against the fact that such a requirement achieves the objective of enabling the planning authority to provide for POS that is generally commensurate with the growth in the municipality. The power will not offend the requirement of proportionality because its exercise may infrequently produce inequities. It must be 'so lacking in reasonable proportionality as not to be a real exercise of the power.'[127]

222 In most cases subdivisions create additional lots and thereby the potential for more intensive development and a need for additional public space. It is the capacity for more intensive development that engages the requirement for more POS. The fact that in some instances the capacity may not be utilised, is not something that can necessarily be assessed at the time a subdivision is approved. Critically, once a subdivision is approved, it is generally beyond the capacity of the responsible authority to obtain a POS contribution. A person subdividing the relevant land will, of course, take the benefit of any increase in value that flows from the increased capacity to develop that land. By directing itself to that capacity, cl 52.01 is proportionate to the legitimate planning purpose of providing for POS in the municipality.

223 The validity of a subordinate instrument is not to be determined according to extreme examples.[128] Even if a requirement to make a POS contribution would be disproportionate if imposed upon an individual subdivision where it could be established that the relevant subdivision did not create a need for additional public open space, I agree with Warren CJ and Osborn AJA that the present subdivision does prima facie create such a need.

224 As the facts disclose, the landowner applied for a staged subdivision whereby the first stage has the effect of enlarging one of the lots. Subsequently, the second stage provided for a variation of the restricted covenant to allow two dwellings to be constructed on that enlarged lot and to divide that lot into two lots to house those dwellings. Given these facts, the premise of the landowner cannot be accepted, that the first subdivision did not create the capacity for an additional need for POS space. The expansion of the lot created the capacity for more intensive use of that lot in exactly the manner undertaken by the landowner. It is not to the point to say that this subdivision did not, immediately, create an additional lot. The facts of this case demonstrate how more intensive use of the land may arise in a subdivision that does not create an additional lot. More intensive use would potentially occur in the event that the restrictive covenant was removed. That this removal was, at all times, planned by the landowner, serves to underline the appropriateness of imposing the POS contribution requirement at the first stage.

225 The landowner also placed some reliance on the decision in Rockdale Municipal Council v Tandel Corporation Pty Ltd.[129] There, a clause of the relevant planning scheme provided that the responsible authority in respect of any application for consent to erect a building, could attach conditions to any grant of consent. A condition was imposed requiring the developer to make a contribution for POS. On appeal, it was said that while it was not open to require a payment merely for the purpose of augmenting its revenue, the council was entitled to a contribution towards the cost of open space in circumstances where the money was impressed with a trust which would prevent its expenditure for any other purpose, and where the space was so proximate to the development site as to present a reasonable connexion with the needs generated by it. As was observed by Glass JA (with whom Samuels JA agreed):

The test of validity having been expressed in such wide terms it is not possible in my opinion to state a priori that all conditions involving a money payment lack validity. It will no doubt be impossible to justify the collection of money with which the Council intends merely to augment its revenue or which it proposes to spend on certain purposes without any obligation to do so. But I consider that council may arguably claim that it has imposed a valid condition in circumstances where residential development in a given area will create a need for additional open space if the amenities for the neighbourhood are to be preserved, the provision of open space on the development site is not commercially feasible, money collected from each developer is to be expended on the provision of such open space, the money is impressed with a trust which would prevent its expenditure for any other purpose and the space to be provided is proximate enough to the site to present a reasonable connexion with the needs generated by development on it. It goes without saying that the relationship between the proposed development and the proposed facility raises questions of degree and therefore of fact which the trial judge will determine by applying to his findings on the evidence and appropriate measure of validity expressed, as it may be in the general language adopted by the High Court. [130]

At a glance

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Judgment (345 paragraphs)

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Cases Cited (32)