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[2011] NSWLEC 1294
Land and Environment Court (NSW)
2011-06-09
Mr P
Original judgment source is linked above.
Mr P Tomasetti, SC (Respondent) Solicitors Meriton Group (Applicant)
Council of the City of Sydney (Respondent) File Number(s): 10887 of 2010
Judgment 1This is an appeal against the refusal by the Council of the City of Sydney (council) of an application under s 96(2) of the Environmental Planning and Assessment Act 1979 (EPA Act) to modify the consent for development application D/2009/702 (the Consent) for 20 Gadigal Avenue, Zetland (the site). 2Condition 48 of the Consent requires a contribution under s 94 of the EPA Act of $5,418,553.69. The s 96 application seeks to modify the condition to reduce the total contribution payable by including a credit of $265,778.58 for a past workforce. 3The key issue between the parties is whether the s 94 contribution required by condition 48 of the Consent is unreasonable in the particular circumstances of the case, specifically, whether a credit for an historic workforce is warranted and, if so, the amount of any credit.
Site and its locality 4The site is irregular in shape and has an area of 5,430sqm. It has a frontage of approximately 58m to Gadigal Avenue and 36m to South Dowling Street. The site is generally vacant and works associated with the development consent have commenced. 5The site is located within the suburb of Victoria Park which is bounded by O'Dea Avenue, Joynton Avenue and South Dowling Street. Victoria Park is part of the Green Square Urban Renewal Area (GSURA) and is approximately 1km to the east of Green Square Railway Station. The suburb is currently being redeveloped for mixed residential, commercial, retail and community uses with infrastructure, including roads and open space. 6Land to the north of the site and south of Victoria Park is generally industrial with recent development approvals incorporating residential apartments.
History of the site and its locality 7A detailed history of the site and Victoria Park is in the Statement of Evidence of council's consultant historian, Dr Shirley Fitzgerald. In summary, Victoria Park was originally part of a swamp which was drained in 1904 to form a racecourse which operated until 1942 when the land was used by the military during World War 2. 8In 1948, part of the area was sold to the British Motor Company (BMC) and used for storing cars imported from Britain. Between 1950 and 1975, BMC (now BMC-Leyland) developed eight factory buildings, administration offices, an amenities block with canteen, lockers and washrooms, boiler house and plant buildings and other smaller stores and miscellaneous sheds. 9The people employed ranged from 150 at the commencement of BMC operation in the early 1950s to about 4,000 in the mid 1960s operating in two shifts, to a maximum employment of about 5,000 to 5,500 workers in the early 1970s, operating in three shifts. The highest number of workers at any one time was around 2,400 during office hours, including 800 administrative staff. BMC closed at the end of 1974. 10In May 1975, the factory site was acquired by the Commonwealth Department of Defence for use as a Naval Supply Facility. The Navy utilised six of the eight buildings for warehousing, one for on-site servicing, and one for the Army Sydney Workshop Company. In addition, the main administration building was built in 1966 and used for naval administration. Employment levels at the Naval Supply Facility gradually increased to a maximum of about 835 in 1976. The Commonwealth government announced its intention to dispose of the facility in 1990 and the employment numbers declined to almost none by 1995 . 11In 1997, the land was sold to Landcom. In 1998, Landcom prepared a draft masterplan and in 1999 South Sydney Council adopted the Victoria Park Refined Masterplan (Masterplan). All buildings on the BMC land were demolished by 1999. 12The Masterplan identified up to 2,500 dwellings to accommodate 3,800 residents and 115,000sqm of office and retailing space with opportunities for up to 3,000 workers. A total of 4.6ha was allocated as future open space. 13Landcom subdivided the area and undertook works including the removal of structures, the development of open space and the construction of local infrastructure such as roads, sewers and stormwater management. 14Development sites were subsequently sold and are largely being redeveloped.
Planning framework 15Section 94 of the EPA Act relevantly provides: (1) If a consent authority is satisfied that development for which development consent is sought will or is likely to require the provision of or increase the demand for public amenities and public services within the area , the consent authority may grant the development consent subject to a condition requiring: (a) the dedication of land free of cost, or (b) the payment of a monetary contribution, or both. (2) A condition referred to in subsection (1) may be imposed only to require a reasonable dedication or contribution for the provision, extension or augmentation of the public amenities and public services concerned. (3) If: (a) a consent authority has, at any time, whether before or after the date of commencement of this Part, provided public amenities or public services within the area in preparation for or to facilitate the carrying out of development in the area , and (b) development for which develop m ent consent is sought will, if carried out, benefit from the provision of those public amenities or public services, the consent authority may grant the development consent subject to a condition requiring the payment of a monetary contribution towards recoupment of the cost of providing the public amenities or public services (being the cost as indexed in accordance with the regulations ). (4) A condition referred to in subsection (3) may be imposed only to require a reasonable contribution towards recoupment of the cost concerned. ... 16Section 94B provides: (1) A consent authority may impose a condition under section 94 or 94A only if it is of a kind allowed by, and is determined in accordance with, a contributions plan (subject to any direction of the Minister under this Division). (2) However, in the case of a consent authority other than a council : (a) the consent authority may impose a condition under section 94 or 94A even though it is not authorised (or of a kind allowed) by, or is not determined in accordance with, a contributions plan, but (b) the consent authority must, before imposing the condition, have regard to any contributions plan that applies to the whole or any part of the area in which development is to be carried out. (3) A condition under section 94 that is of a kind allowed by a contributions plan (or a direction of the Minister under this Division) may be disallowed or amended by the Court on appeal because it is unreasonable in the particular circumstances of that case, even if it was determined in accordance with the relevant contributions plan (or direction). This subsection does not authorise the Court to disallow or amend the contributions plan or direction. ... 17Section 94EA of the EPA Act deals with contributions plan making. It relevantly provides: (1) A council , ... may, subject to and in accordance with the regulations , prepare and approve a contributions plan for the purpose of imposing conditions under this Division (other than Subdivision 4). ... (3) The regulations may make provision for or with respect to the preparation and approval of contributions plans, including the format, structure and subject-matter of plans. (4) A council is, as soon as practicable after approving a contributions plan, to provide the Minister with a copy of the plan. 18Part 4 of the Environmental Planning and Assessment Regulation 2000 (Regulation) regulates contributions plans and includes the requirements that a contributions plan must be prepared having regard to any relevant practice notes adopted for the time being by the Director-General (cl 26) and that a contributions plan must contain the following particulars (cl 27): (1) A contributions plan must include particulars of the following: (a) the purpose of the plan, (b) the land to which the plan applies, (c) the relationship between the expected types of development in the area to which the plan applies and the demand for additional public amenities and services to meet that development, (d) the formulas to be used for determining the section 94 contributions required for different categories of public amenities and services, (e) the section 94 contribution rates for different types of development, as specified in a schedule to the plan, ... (g) the council's policy concerning the timing of the payment of monetary section 94 contributions , section 94A levies and the imposition of section 94 conditions or section 94A conditions that allow deferred or periodic payment, (h) a map showing the specific public amenities and services proposed to be provided by the council, supported by a works schedule that contains an estimate of their cost and staging (whether by reference to dates or thresholds), (i) if the plan authorises monetary section 94 contributions or section 94A levies paid for different purposes to be pooled and applied progressively for those purposes, the priorities for the expenditure of the contributions or levies, particularised by reference to the works schedule. ... 19Development Contributions Practice Notes - July 2005 (Practice Notes) have been made for the purpose of cl 26(1) of the Regulation. 20The relevant contributions plan is the City of Sydney Development Contributions Plan 2006 (Plan), which commenced on 7 April 2007. There is no dispute between the parties that the Plan has been made in accordance with the requirements of the Regulation and the Practice Notes, or that, the s 94 contribution required by Condition 48 of the Consent was calculated in accordance with the Plan. 21The area covered by the Plan within the City of Sydney Local Government Area (LGA) is divided into three precincts (Western, Eastern and Southern Precinct). The site is in the Southern Precinct. The works programme in the Plan will be undertaken over a period of 25 years (1996 to 2021) with $201,884,662 expended in the three precincts on community facilities, streets and cycle ways and in implementation of a management strategy. In addition, $310,258,769 will be spent in the Southern Precinct on new open space, new roads and new community facilities. 22Clause 1.4 of the Plan explains the purpose of the Plan and states: This Contributions Plan is a baseline Contributions Plan. It levies to attempt to maintain current minimum per capita rates of provision of local open space and civic space...and community facilities. It levies a proportional contribution towards the upgrading of some existing parks and works which enable increasing numbers of people to move about within the area - pedestrian routes, traffic and transport improvements, cycleways and improvements to town centres. It also levies a management cost .... 23Clause 2.8 of the Plan provides the following policy on exemptions from development contributions: ...the City intends to levy, by condition of development consent, all development in the area covered by this plan which creates the potential for a nett increase in the population and, therefore, the potential demand for the use of the amenities, facilities and services, which the Council provides... 24Clause 2.15 of the Plan provides a policy for existing development which provides: 2.15 Policy for Existing Development These provisions describe the approach for determining the nett increase in demand for the purposes of levying only the nett additional population. There has been considerable debate in recent years as to what constitutes an existing level of demand (which is entitled to due credit) for the purposes of calculating development contributions. For the purposes of this Contributions Plan, from it's 'in force date' forward, credit for the population of past development will be determined to exist for the purposes of granting a credit only in the following circumstances:
For the purposes of this Contributions Plan, where contributions are derived from a works programme that seeks to maintain a per capita rate of provision without recouping past expenditure, thus utilising a base date of 2006 and extrapolating the population growth until 2021, the following statistics represent the contributing populations for the purposes of the continuing rolling works programme carried over from past plans and carried through to 2021. Figure 4.5 Contributing Populations 2006-2021 Precinct Existing Residents 2006 (est) Additional Residents Total Residents 2021 (est) Existing Workers 2006 (est) Additional Workers Total Workers 2021 (est) Southern Precinct 42,175 29,609 71,784 43,710 19,285 62,995
Note: Phantom populations which departed any given site which is the subject of a redevelopment application prior to 1996 and, thus, were not counted as part of the existing population, cannot be credited without undermining the capacity of this plan to provide infrastructure for genuine population growth. 30Clause 4.16 provides workforce occupancy rates. It states: That it is the preference of the City of Sydney that actual worker numbers, both historic (for the purpose of calculating any past credit due to a development site) and proposed (where known) are used for the purposes of calculating the nett contribution applicable to any development proposal. Actual demand is generated by actual people - therefore actual, documented, numbers best reflect both past and future demand. Where the number of workers is known with reasonable certainty and is provided as part of the Development Application and is deemed to be reasonable 5 on assessment, then that number of workers will be accepted for the purpose of assessing the total contribution for that particular development. It is recognised, however, that actual figures may not always be reasonably possible to obtain. Accordingly these industry or statistical standards are provided as a safety net allowing a reasonable estimate to be made of past and future demand in the absence of actual data. 31The standard provided for older style industrial buildings (pre 1960) used for manufacturing is 72.1sqm gross floor area per employee and 88.3sqm gross site area for 1 employee. 32The Strategy in Chapter 5 - Demography contains statistical detail about the people of the area covered by the Plan. 33The Strategies in Chapters 6 - Community and Recreation Facilities, Chapter 7 - The Public Domain and Chapter 8 - Accessibility explain the nexus for the public amenity or service to be provided in the work programmes and the apportionment of costs to new development. 34The costs of providing most Community Facilities (cl 6.5) and Accessibility works (cl 8.5) are apportioned to the new population (24%) and to Council (76%). 35Specific new roads in the Southern Precinct are the only Accessibility works attributed 100% to the new population on the basis that they are required for new developments (cl 8.6). Similarly, the acquisition of new open space is apportioned 100% to the new population as it maintains only the existing current per capita rates (cl 7.7). In the Southern Precinct the estimated per capita rate for open space in 2006 for equivalent workers is 6.6sqm and the rate for the provision of open space is 5.7sqm.
The proposal and its background 36The Consent for the site was granted on 22 July 2010, for the Integrated Stage 2 development application for excavation, detailed design and construction of four connected mixed-use buildings, ranging in height from 3 storeys to a 26 storey tower element on South Dowling Street, retail and commercial uses and a child care centre at the lower floors with a total of 291 residential apartments above, site landscaping and basement parking for 392 cars. 37The Consent included Condition 48 which required a s 94 contribution. The consent was subsequently amended and the current form of condition 48 of the Consent provides: (48) SECTION 94 SOUTHERN PRECINCT CITY OF SYDNEY DEVELOPMENT CONTRIBUTIONS PLAN 2006 As a consequence of this development, Council has identified an additional demand for public amenities and facilities. Pursuant to Section 94 of the Environmental Planning and Assessment Act, 1979 (as amended), and City of Sydney Section 94 Contributions Development Contributions Plan 2006 the following monetary contributions towards the cost of providing facilities and amenities are required to be paid prior to the release of the Construction Certificate for Stage 2 as follows: Contribution Category Amount Community Facilities = $684,987.70 $ 700,177.04 Public Domain = $421,912.92 $ 431,241.57 New Open Space = $3,287,448.26 $3,360,135.01 New Roads = $834,919.13 $ 853,379.51 Accessibility = $34,629.05 $35,394.71 Management = $37,441.99 $38,269.84 TOTAL: =$5,301,339.03 $5,418,553.69 The above payments will be adjusted according to the relative change in the Consumer Price Index using the following formula. Contributions at Time of Payment = C x CPI 2 I CPI 1 where: C is the original contribution amount as shown above; CPI 2 is the Consumer Price Index: All Groups Index for Sydney available from the Australian Bureau of statistics at the time of payment; and CPI 1 is the Consumer Price Index: All Groups Index for Sydney available from the Australian Bureau of Statistics at the date of approval - March 2011. Payment may be by EFTPOS (debit card only), CASH or a BANK CHEQUE made payable to the City of Sydney. Personal or company cheques will not be accepted. Please contact Council's Planning Administration staff to confirm the amount payable, prior to payment. Copies of the City of Sydney Section 94 Development Contributions Plan 2006 may be inspected at Council's offices. 38The s 96 application seeks to modify condition 48 by the insertion of a line to the effect that the total contribution be reduced to reflect a credit for an existing (workforce) population on the former industrial site. 39As the site was vacant in 2001, its former population was not 'deemed to exist' and, in accordance with the Plan, no credit was included in condition 48 of the Consent. The key dispute between the parties is whether the condition is unreasonable in the particular circumstances of the case. In particular, whether the credit (or lack thereof) for existing population calculated in accordance with cl 2.15 of the Plan accurately reflects the nett increase in the population and, therefore, the extent to which the development ...will or is likely to require the provision of or increase the demand for public amenities and public services within the area for which a contribution can be levied. The dispute centres on whether the 2001 Census 'benchmark' date in cl 2.15 is 'arbitrary' and should not be used to determine the 'existing population' of the site.
Evidence 40The Court visited the site and surrounding area. There were no objectors to the application. The Court heard expert planning evidence from Mr G New, for the council, and Mr G Smith, for the applicant. Mr D Hewetson, council's s 94 planner and Dr S Fitzgerald, council's consultant historian provided statements of evidence but were not required for cross examination. Existing demand 41Mr New and Mr Smith agree that the primary intent of s 94 is that a particular development only be required to meet the nett additional demand for public services and amenities generated by that development. They further agree that an assessment of nett additional demand for public services and amenities must first take account of existing demand and that equivalent persons requiring public services and amenities are a 'surrogate' measure of demand. However they disagree on how the existing demand (population) should be quantified. In particular, whether, in the circumstance of this case, the use of a 'benchmark' date to measure population on the site is reasonable or whether the peak historical population of the site should be used. 42In Mr New's view: Contributions plans must, among other things, describe the relationship between development and demand, formulas for contribution rates, and must contain a schedule of specific amenities and services the subject of the s94 contribution (cl 27(1)(c), (d), (h) EPA Regulation). CP 2006 has computed net additional demand for the specific set of public amenities and services...based on 2 benchmark dates (1996 and 2006). ...for a s94 plan to be reasonable and meet the requirements of s94 (2), the assessment of 'existing demand' must relate to the basis of determining the contribution rate in the relevant contributions plan or plans. In this case that basis is both 1996 and 2006. The integrity of the contribution formula is diminished if a different value for existing demand is inserted... ...it is agreed that there was no or negligible population on the development site at the time of either demand assessment (1996 or 2006). Condition 48, which computes a contribution amount assuming no existing demand in the net additional population calculation, is therefore reasonable. 43Mr New recognised that a degree of flexibility should be applied to the use of a benchmark, if, for example, a population existed on the site immediately prior to the cut off which placed a demand for services and amenities it would be appropriate to allow this to be credited in the calculation of the s 94 contribution. 44Mr New considered that demand for public services and amenities change over time. While the worker population on the site in the 1970's would have had demands, in his opinion: ...the time difference between the date of the development site's peak population (early 1970s) and the earliest demand assessment date (1996) means that the site's peak population: has no relevant nexus with the set of specific amenities and services the subject of the contribution, and therefore cannot be held to be 'existing demand' for the purposes of determining a reasonable section 94 contribution for the development. 45Mr New acknowledges that there is a degree of inconsistency in using a benchmark date of 2001 in cl 2.15 of the Plan, rather than the two demand assessment dates (ie 1996 and 2006). In his opinion, the plan should allow for peak site population during the period 1996 to 2006. However, this does not effect his conclusions about the reasonableness of the contribution required under Condition 48 as the site was effectively vacant on both these dates and during this period and therefore on the census date of 2001. 46Mr Smith considers that if increased demand were to be computed from a particular date, it would be specified in s 94(1). Rather, he considers that peak historical population of the site (whenever this occurs) is what is required by s 94(1) to measure existing demand. 47Mr Smith states that the workers in 1970 would have had individual demands just as present day workers have demands. The Plan assumes every person has the same demands and uses the number of persons as a 'surrogate for demand'. It aggregates differing individual demands into a 'common basket' of demands for services and amenities. It does not distinguish between demands of equivalent persons in 1996, 2006 and 2021 and therefore assumes that the 'basket' of demands remains the same over time. Based on this logic, the 'basket' of demands would be no different in the 1970s and it is not relevant whether these demands were met by the provision of services and facilities at that time. 48Mr Smith considered that there is no reason why existing demand must be related to the dates when the contribution rates were determined. He does not consider that the integrity of the contributions formula would be diminished if historical peak demand, which occurred at a significantly different date, were used to determine existing demand. Although in their Joint Statement Mr New and Mr Smith agree that: Assuming all other assumptions in CP2006 remain the same, a consequence of using historical peak site populations as the basis for assessing net additional demand for facilities included in CP2006 would be higher section 94 contribution rates than those that currently appear in CP 2006 if the work programmes remain unchanged. This is because, area wide, the existing demand calculated by summing all the peak populations in the area would likely be higher than the benchmark date demand currently assumed in CP2006, so that the costs of providing the facilities in the works programmes would be spread over a smaller net additional contributing population. 49In Mr Smith's opinion, the plan should be based on the historical peak population of every site within its area (even if not vacant) to determine the demand for amenities and services. He recognises that this approach would alter the population figures and therefore the contribution rate if the same facilities were to be provided. 50Under cross examination, Mr Smith acknowledged that the provision of open space in the Plan maintains the per capita rate in 2006 of 6.6sqm per person and that this rate was likely to have been similar in the 1970s. He accepted that the per capita rate is required to meet the demand for open space as a result of the development. Similarly, the roads to be provided (Gadigal Road) are required to meet the needs of the development and are therefore correctly apportioned totally to the incoming population. However, he expressed general concerns about the Plan, the Regulation and the Practice Notes but accepted that these were not being raised as issues in the case. 51In their joint statement, Mr New and Mr Smith accepted that it is reasonable to use Census data to determine the prevailing rate of provision per capita of public services and amenities. They agreed that the resident and worker population data and projections, the monetary s94 contribution rates and the method of calculation of the s94 contributions in the Plan were not in issue, except for the component dealing with the calculation of existing demand. They agree that five workers are the equivalent of one resident, although the basis of this assumption is not articulated in the Plan other than for open space. Further, they agree that the contributions in condition 48 of the Consent are calculated in accordance with the Plan. 52However, they disagree of whether census data should be used as the basis for determining the increase in demand. Mr Smith considered that if it were intended to be used for this purpose it would be identified in the legislature. Further, he is aware of its limitations and considers it has little relevance to determining existing demand. Mr New acknowledged that census data has methodological limitations but stated that it is the 'nationally recognised comprehensive data set that contains characteristics of resident and worker population down to a small area level...is the standard data set used for the preparation and review of section 94 contributions plans'. Peak population on the site 53Mr New, Dr Fitzgerald and Mr Smith agree that BMC's peak worker population occurred in the early 1970's and was 5,000 to 5,500 working in three shifts with the maximum number of workers at any one time being around 2,400, including 800 administration staff. They further agree that the number of workers has been nil or negligible since about 1996. 54Mr New and Mr Smith held different opinions as to whether total daily (5,600) or the peak daily (2,400) population should be used for existing demand if the historical peak population is accepted as appropriate to determine a credit. 55Mr New considered the peak daily workforce more accurately reflects the likely demand for services, as this would have been during the daytime. While workers of other shifts would have also used facilities such as roads, all workers would not have used them all at once. Furthermore some facilities, such as parks and community facilities, would not be readily accessible after hours. 56Mr Smith accepts that it is not clear how the demand of shift workers should be determined. However, he considers that the total daily workforce figure should be used because whether certain workers 'could not access a facility may not extinguish their desire/expectation/demand to do so. However, he conceded that it may not be appropriate to base demand on all three shifts but on when they overlap (4,000).
Applicant's submissions 57Mr Russell QC, for the applicant, provides an overview of the Plan where he submits that: The Plan recognises a need to account for existing populations of residents, workers and visitors. However, it does this by using the concept of an 'existing population' for two different purposes under the Plan: First, the concept underlies the Plan's assessment of the differences between those services and amenities being supplied to meet the demands of any existing population (ie for purposes of apportionment ); ii) Second, the concept is again used when giving a credit against the contribution otherwise owing for the presence of an existing population (ie for purposes of giving a credit against the total contributions payable). 58Mr Russell submits that it is important to maintain the distinction between apportionment and credits. He refers to the section in the Practice Notes which deals with exemptions, discounts, credits and refunds to support this submission. 59Mr Russell submits that the s 94 rates and apportionment in the Plan are not challenged. He accepts that: ... the fact that the Plan allocates the full cost of roads and open space to the needs of the incoming population is not in dispute. However, it would be wrong to read apportionment clauses as meaning that there is then a total liability for contributions that will be levied on new development... This is because the levy is only ever payable when there is a 'nett increase' in population: cl 2.8 of the Plan. Thus, the Applicant only challenges its Iiabilitv to contribute to the costs of the Council's amenities and services under the Plan. Once that liability is determined by a proper application of the 'nett increase' in population created by the development, the Applicant has no issue with the rates, or the apportionment, provided for in the Plan. Thus, if any new development would not result in a 'nett increase' in population then no contributions would be payable under cl 2.8 of the Plan even though other provisions of the Plan express a clear desire that new development shoulder the cost of providing new open space and new roads in the Green Square Urban Renewal Area. Similarly, the Applicant submits, where there is an existing population present on the site the subject of the proposed development it is necessary to make an account of the 'nett increase' in population in order to work out the extent of the liability to make a contribution. This is both because: i) s 94(1) only empowers the Council to impose a levy where there has been such an 'increase' and ii) it would follow through the consistent application of the provisions of the remaining Plan (other than the arbitrary 2001 census cut off date). The Applicant acknowledges that its application seeks to have an 'existing population' taken into account when it comes to granting a credit but does not challenge the manner in which those same existing populations have been ignored when setting rates. 60In dealing with the credit that should be allowed for the existing population under the Plan, Mr Russell submits that the intent of the Plan is to levy only development which creates the potential for a nett increase in the population and, therefore, the potential demand for the use of the amenities, facilities and services (cll 2.8 and 2.15 ). However, he submits that: after recognising that the levy can only apply to the 'increase' in the population (because the plan uses the term 'population' to stand in for 'demand'), clause 2.15 then purports to limit the circumstances under which the population of past development will be determined to 'exist': 61The effect of cl 2.15 (together with the definition of 'existing population ' and the 'Note' under Figure 4.5 of the Plan) is to not allow a credit where an existing population is not identified from the 2001 Census data. Mr Russell submits that: ...despite the fact that there is an 'actual' population of workers that is known to have 'existed' on the site in the recent industrial history of Australia, the Plan does not allow a 'credit' against the contributions that are payable because that population was not identified in data collected under the 2001 Census . It is the inherent unfairness and illogicality of that outcome that makes cl 2.15 of the Plan unreasonable in the circumstances ...(and) results in an unreasonable condition contrary to s 94(2) of the EPA Act 62Mr Russell supports this submission by reference to the following previous decisions of the Court: Meriton Apartments Pty Limited v South Sydney City Council (Unreported, NSWLEC 10412 of 2001, 12 September 2001) (Meriton No 1). Maygood v City of Sydney Council [2008] NSWLEC 1112 at [82] Meriton Apartments Pty Ltd v City of Sydney [2009] NSWLEC 1336 at [48]- [49], [56] (Meriton No 2). 63Mr Russell submits that these decisions have determined that recognising an existing population by reference to the latest census data produces unreasonable results and that an 'arbitrary' cut off date for credits was unreasonable because it was unfair. He submits that this is also implicit in the reasoning of the Court of Appeal in Meriton Apartments Pty Ltd v Council of the City of Sydney [2011] NSWCA 17 ( Meriton No 3 ). 64Mr Russell submits that consistency in administrative decision-making is a desirable feature of the planning system in NSW (see Segal v Waverley Council (2005) 64 NSWLR 177 at [56]). Further, he refers to Rose Consulting Group v Baulkham Hills Shire Council (2003) 58 NSWLR 159, where Santow JA said at [37]: It does not follow that where a contributions plan mandates an unreasonable result in terms of conditions, the effect of a court amending or disallowing a condition is to amend the contributions plan itself. That is not the result at all. What it does mean is that until the contributions plan is amended, anyone who challenges such a condition is likely to succeed. It is of course open to a council to avoid that result by adopting a new and sensible contributions plan ... 65As the Plan has not been amended since Maygood or Meriton No 2 was decided, Mr Russell submits that: The Applicant is therefore entitled to believe that it is 'likely to succeed' and, if the Court were not to follow Meriton (No 2) or Maygood it should give clear reasons for not following the reasoning of the Commissioners in those decisions. 66Mr Russell further submits that the Court should find that that cl 2.15 produces unreasonable results purely on the terms of the Plan itself because: i) Section 94(1) of the EPA Act onlv permits recovery of contributions based on a specific criterion of whether there has been an 'increase' in demand and clause 2.15 of the Plan (along with the narrow definition of an 'existing population' in the Dictionary) impermissibly and unreasonably seeks to limit the occasions in which such an 'increase' will be recognised by the Respondent; ii) Strict application of cl 2.15 of the Plan (and the definition of 'existing population') would require the Court in applying the Plan to reduce to zero the number of workers that had been present on the site in circumstances when it is known that an existing workforce population was not present to be captured in 2001 Census dates, which produces inherently unreasonable results that is inconsistent with the object of cl 4.16 of the Plan to use 'actual data' rather than 'rules of thumb'; iii) If the Plan can reduce to nil a credit against contributions based upon the arbitrary date of the 2001 Census, then the Plan fails to fairly allocate contributions between various development projects (meaning some developers will pay less than they should because the Applicant pays more than it should). This unfairness is an indicator that the Plan produces unreasonable results which can be readily addressed by simply removing the limitations on recognising an 'existing population' under cl 2.15 and then applying the remaining provisions of the Plan; iv) The pattern of land development is generally that land is moved to more intensive use with the passage of time. The operation of s 94 is to capture for the Council at each stage a contribution for the next stage in its evolution. Within the Plan (leaving to one side the arbitrary cut off date) this principle has been appropriately recognised in the requirement that a pre-2001 population should only be considered if its component members used the actual services and amenities provided for in the Plan (here, the Respondent's witnesses having conceded that temporally close populations can be taken into account because, for example, a denial of a credit on the basis of a six month vacation of premises would not be reasonable) is to subject those populations only to this test. Any temporal difference here has to be measured against the fact that the life of the Plan is 25 years. It may be expected that further or other significant changes occur over the life of this Plan, as great as those in the preceding 25 years. 67In Mr Russell's submission, the Court is required to consider the Plan but is not bound by it (ss 94B(2), (3) EPA Act; Arkibuilt Pty Ltd v Ku-ring-gai Council (2006) 67 NSWLR 529 at [22]). If the Court concludes that application of cl 2.15 would result in an unreasonable condition, it cannot apply cl 2.15 (see Rose Consulting ) and may sub stitute a more reasonable assessment of a credit (see Arkibuilt ). 68Mr Russell submits that a reasonable contribution, taking account of the intent of the Plan to provide for contributions reflective of a nett increase in demand, should be based on the number of the peak workforce for BMC of 5,600, not the maximum workforce 'at any time' because. i) That narrowing of the term 'population' to people present at anyone time on a site is not warranted by any provision of the Plan. Indeed, the use of the term 'population' as covering residents, workers and the transitory visitor population (see cl 2.8) would appear to indicate that the term is intended to cover a wide field of people that are present from time to time; and ii) Demand for services and amenities cannot be limited to people actually present on a site at a particular time but would be constituted by the aggregate 'population'. 69Mr Russell submits that the credit should be calculated on the number of workers for BMC (5600 for 244,680sqm) and apportioned to the site (5430sqm) giving a maximum worker population of 124, which provides a credit of $265,778.58 (124 x $2138.61). In Mr Russell's submission the s 94 contribution in condition 48 should be reduced by this credit.
Council's submissions 70Mr Tomasetti SC, for the council, submits that in imposing condition 48 of the development consent the council was satisfied that the development would or would be likely to require the provision of public amenities and public services within the area. To support this submission, he provides a detailed history of development in the area (in particular the GSURA and Victoria Park), the assumptions on which the Plan is based and the structure of the Plan. 71Mr Tomasetti submits that the EPA Act and Regulation do not permit demand to be identified in a 'general sense' in a contributions plan. Rather 'specific' public amenities and services are to be identified and supported by a works schedule that estimates costs and staging. If a development increases demand for these specific works, a s 94 contribution may be levied. 72Mr Tomasetti notes that the Plan establishes a 'baseline' population (1996 and 2006) to determine the increasing population over the life of the plan. The 'baseline' population establishes the minimum per capita rates of provision of local open space and community facilities. The Plan adopts an approach for determining the nett increase in demand for public services and amenities of levying only additional population. Credit for the population of past development is determined to exist only in certain circumstances, which does not include if the site is vacant at the time of the 2001 Census and therefore no population from the site was counted as part of the population cited in the Plan (cl 2.15). 73Mr Tomasetti also refers to the decision of the Court of Appeal in Meriton No 3 and acknowledges that a development is entitled to a credit for any demand created by the actual or deemed workforce population of the site at the time of the development application. However, he submits that the demand for the public services and amenities which the Plan seeks to provide is generated by the population in 1996, 2006 to 2021. It is not a demand for community services in a 'general' sense generated by a 'workforce that ceased to exist on the site nearly 40 years ago'. 74Mr Tomasetti submits that: The subdivision and redevelopment of Victoria Park demanded internal access roads as a fundamental feature of every subdivision. Demand for those roads was not generated by any employees.... present on the site in 1974. The subdivision and redevelopment of Victoria Park and the GSURA generates significant resident and worker population increase. Without acquisition of open space...the provision of open space per capita in 1996 in the local government area cannot be maintained. The demand for additional open space is driven by the development ....Any demand for open space that existed in 1974 was made up by open space provisions that then existed. The Plan does not seek to provide open space to address past demand...[it] seeks to address demand for that facility from future development. The demand for additional community facilities is driven by the redevelopment of Victoria Park and GSURA and not by the development which was present on the site in 1974. Accordingly no credit needs to be given or should be given. 75Mr Tomasetti notes that the urban renewal programme will result in a change in demographics and social behaviour with a greater number of families with children and women who work which will increase the demand for childcare. Further, the development will demand the public facilities offered by the Green Square Town Centre. 76Mr Tomasetti recognises that it may be reasonable to allow some credit for a workforce present on the site prior to the census date in cl 2.15 of the Plan. However, there is a significant temporal disconnection ....to give a credit for an assumed workforce that was on the site nearly 40 years ago. 77Mr Tomasetti notes that s 94(3) of the Act gives the Court discretion to vary or modify a monetary contribution having regard to the particular circumstances of the case. However, he rejects the evidence of Mr Smith and the applicant's submissions as these rely on a 'general' demand for public services and facilities from the workforce of BMC up to 1974. He submits that the 'specific' public services and amenities were not demanded by that workforce and: On the particular facts and circumstances of this case, there is no justification whatsoever for giving credit to the section 94 contributions which are otherwise due for a phantom population which was on the site 36 years ago. Demographics change with time. Technology changes with time. Workplaces change with time and people's expectations and need all change accordingly. A responsible consent authority must provide for these changes in its Contributions Plan policy. There will be a point in time when by reason of lapse in time that peak historic workforce or population of a particular site is no longer relevant to understanding exiting demand for public amenities and services. 78If the Court accepts that a credit should be granted for peak historic population, Mr Tomasetti submits that this should be based on the peak daily workforce in a daytime shift of 2400. This would reflect 'reasonable demand' given that: For example there could be no demand for open space in the midnight to dawn shift. There could be no demand on local area traffic management devices by two shifts as when one shift is leaving the other shift has already commenced work. There could be no demand for library buildings from two shifts at the one time as it would be unlikely that hypothetical workers from more than one shift would visit a library facility ay the same time. 79Based on the peak daily population (2,400), Mr Tomasetti estimates an equivalent workforce for the site of 52.8 workers which equates to a credit of $112, 918.60 (52.8 x $2318.61). Alternatively, he submits that contribution rates for open space, new roads and management should be excluded from any credit for existing population as these rates are apportioned wholly to new population. On this basis the credit would be $34,993.72 (52.8 x $662.76).
Findings 80The key question before the Court is whether condition 48 of the development consent should be amended pursuant to s 94B(3) of the Act because it is unreasonable in the circumstances of the case. To determine whether the condition is unreasonable the Court must be satisfied that the condition reflects the extent to which the development will or is likely to require the provision of or increase the demand for public amenities and public services within the area . 81The decision of the Court of Appeal in Meriton No 3 outlines the proper approach to determining the reasonableness of the condition within the statutory framework established by s 94 and s 94B. At [59] Tobias JA states: 59 The simple point is that the relevant provisions of the statute are concerned with the nett demand for public amenities and services generated by the development in question. Although the relevant exercise requires a determination of the existing demand for such services in order to reach the nett demand, the former is based purely on the actual or deemed resident or workforce population of the relevant land at the time of the development application for it is only the future population that generates the demand in respect of which a monetary contribution can be required. That determination cannot be dependant upon whether the demand of the historical population was ever met by the council or, if it was, out of what source of revenue. 82To determine the existing demand in this case, the parties agree that there was no 'actual' resident or workforce population on the site at the time of the development application. However, they disagree as to whether there is a 'deemed' population and therefore disagree on the nett demand for public services and amenities generated by the development. 83The disagreement centres on whether the 2001 Census date in cl 2.15 of the Plan or the peak historical population that existed on the site around 1974 should be deemed to be the population for the purpose of determining existing demand. Mr Tomasetti submits that this historical population did not generate a demand for the 'specific' public amenities and services to be provided by the Plan and that the development requires the provision of these amenities and services. Whereas, Mr Russell submits that the historical worker population had demands, whether or not these had been met, and that it is unreasonable not to permit a credit for this historical population only because it existed on the site prior to an 'arbitrary' cut off date. 84In order to understand these competing submissions it is necessary to firstly examine the previous decisions of the Court. Previous decisions of the Court 85Mr Russell relies on the previous decisions of the Court and submits that they have already addressed the question before the Court of whether an 'arbitrary' census date can be used to determine existing population. 86In Maygood, Brown C upheld an appeal against council's refusal of a development application to use an existing building and construct an additional floor for a mixed retail, commercial and residential building at 320 Liverpool Street, Sydney. At [75-82] he considers whether the s 94 contribution in the condition should provide for a credit for the previous population of the existing building. At [82] he finds: ...In accordance with cl 2.15 (2) of the Contributions Plan, I accept that the population has vacated the site for the purposes of redevelopment since the 2001 Census based on the contents of Exhibit G and as such a credit is justified. In any event, the reference to the 2001 Census is an arbitrary point for the consideration of whether a credit applies. It is clearly helpful in the council's consideration of such requests but it does not however mean that it is the ultimate determinant of whether a credit is granted. The test imposed by s 94(1) is not necessarily time sensitive but whether a development "will or is likely to require the provision of or any increase the demand for public amenities and public services within the area". 87The decision of Brown C in Maygood was in accordance with the Plan and, other than his comments about the arbitrary nature of the census date, it provides no guidance for my determination of the issues before me. 88Meriton No 1 was an appeal against council's refusal of an application under s 96 of the Act to amend a development consent for the former Australian Consolidated Industries (ACI) site at Waterloo. Brown C upheld the appeal and amended a condition of consent requiring a s 94 contribution to recognise the previous workforce population of the site. His decision is based on the acceptance of 'the approach of allowing a credit for the previous provision of public amenities and public services was an appropriate consideration in determining the level of contribution'. He rejected the use of a 'benchmark ' date on the basis that: A fundamental principle of a s 94 contribution is that only the additional need for public amenities and public services, brought about by a development, can be claimed through s 94. The parties did not dispute this principle. As a consequence of this principle some apportionment has to be made between existing uses and the anticipated new uses. In my view, this apportionment for existing uses cannot simply be benchmarked at a particular time because this disregards the contribution made to public amenities and public services prior to the benchmarked date. The fact that no employees were located on the site at the benchmark date should not negate the fact that contributions, in some form, were provided towards public amenities and public services prior to this date. To accept the Council's approach would be to undermine one of the fundamental principles of s 94. 89Brown C found that even though the ACI site was vacant at the census date, a credit was justified as 'during the ACI occupation of the site, contributions were made to the council through at least land rates'. 90I note that in Meriton No 1, the experts did not seek to use the peak historical demand of 4000 workers that occurred on the ACI site in 1970 as the basis for determining the credit for historical population. The applicant's experts recognised that the worker population had declined and lower figures were suggested to reflect the demand. Brown C accepted a figure of 1,465 based on the occupation rates in the Contribution Plan. 91Meriton No 2 was an appeal against council's refusal of an application under s 96 of the Act to amend a development consent for 5 Hutchison Walk, Zetland. The land is also within Victoria Park and previously was part of the BMC operations. Moore SC, amended the condition of consent requiring a s 94 contribution to recognise the previous workforce population of the site. However, he also reduced the credit sought for the period where the site was in government ownership (about 27 of the last 45 years) where it was exempt from paying rates. 92At [62] the Senior Commissioner acknowledged that 'Brown C's analysis of the fairness of having regard to ratability is...appropriate to be considered and adopted...but account needs to be had of the period when such rates were not paid'. He states at [64]: Just as Brown C took into account the fact that, within the discretionary budget of the council, payment of rates could be used to subsidise or contribute towards the costs of community facilities utilised by industrial workers as an entitling factor for a credit, accepting the logic of his approach, as I do, it is then appropriate to accept that periods of non-rateability constitutes a period where there was no revenue from the site to subsidise or contribute towards the costs of community facilities utilised by industrial workers. As a consequence, in my opinion, to take account of this, a discounting factor is required. 93The Senior Commissioner also accepted Brown C's rejection of an 'arbitrary' cut off date for determining existing population. At [49] he states: the combination of the uncertainty concerning the possible utility of census data for workforce calculation coupled with the provisions of 4.16 of the contributions plan provide sufficient support for and consistency within the approach taken by Brown C not to warrant me departing from the general proposition that an arbitrary "nil return" date determined by the date of a census should not be used as an absolute prohibition in considering whether or not a credit should be granted for some prior workforce on the site. 94Further, in determining existing population, Moore SC considered the length of time since the peak workforce existed on the site to be a question of 'fact and degree' and found that it is: Appropriate to have regard to what might have been the workforce demands for public services and facilities in 1964 at the peak of the manufacturing workforce on the site. 95The Court of Appeal in Meriton No 3 considered an appeal against the decision of Pain J ( Meriton Apartments Pty Ltd v Council of the City of Sydney [2010] NSWLEC 64) where Her Honour upheld an appeal under s56A of the Land and Environment Court Act 1979 against the Senior Commissioner's decision in Meriton No 2. Tobias JA, with whom Campbell JA and Macfarlan JA agreed, examined the decision and reasons of the Senior Commissioner. At [25] and [26], Tobias JA outlines the issues identified by Moore SC as being firstly, whether a credit should be granted for past industrial commercial occupation of the site and secondly, the extent to which a credit should be granted as a matter of discretion if he was otherwise satisfied that there was some appropriate basis to grant at least some credit. 'It is the second issue determined by the Senior Commissioner that gives rise to the present appeal' [29]. In dealing with the consideration of this issue by Pain J, Tobias JA found: 55 In my view Meriton's submissions should be accepted and those of the Council rejected. The underlying basis of the Senior Commissioner's reasoning particularly at [64], was that notwithstanding his determination of the appropriate workforce to be taken into account for the purposes of calculating the relevant credit, there should be a discount of that credit because there were periods of non-rateability when there was no revenue from the Site to subsidise or contribute towards the cost of community facilities presumably utilised by that workforce from time to time. 56 In my view, a consideration of the subject matter, scope and purpose of the relevant provisions of Subdivision 3 of Part 4 of the EP&A Act (which contains ss 94 and 94B), does not provide any basis, whether express or implied, which is capable of linking the rateability of the relevant land to the net demand for public amenities and public services generated by the development under consideration. 57 As Meriton submitted, so much was recognised by the Contributions Plan itself. In the table to paragraph 4.16, assumed employee density was acknowledged and provided for community and recreational uses such as schools, TAFE colleges and hospitals, all of which would be exempt from rates. In other words, it was not suggested in the Contributions Plan that rateability of the land at any relevant time was a matter that could or should be taken into account in determining workforce occupancy rates, let alone contribution rates. Nor is there any reference in the Practice Notes issued by the Department and which were required by cl 26(1) of the Regulation to be taken into account by the Council in preparing the Contributions Plan to rateability being relevant to the determination of the credit or allowance which a council was required to make for existing development when determining the net demand generated by new development for public services and amenities. 58 As Meriton submitted, the relevant provisions of the statute are concerned with that demand. The developer was entitled to a credit for the demand created by the existing population, however determined. That demand could be in no way dependant upon whether the landowner in question who created the demand did or did not pay rates at any material time. True it is that before the EP&A Act came into force in 1980 a council may have depended upon rates (whether general or special) to provide public amenities and services to meet the needs of the existing population. But how it met those needs and out of what funds was not the subject of evidence before the Senior Commissioner and, therefore, could not be the subject of any justifiable factual findings. 59 The simple point is that the relevant provisions of the statute are concerned with the net demand for public amenities and services generated by the development in question. Although the relevant exercise requires a determination of the existing demand for such services in order to reach the net demand, the former is based purely on the actual or deemed resident or workforce population of the relevant land at the time of the development application for it is only the future population that generates the demand in respect of which a monetary contribution can be required. That determination cannot be dependant upon whether the demand of the historical population was ever met by the council or, if it was, out of what source of revenue. 60 If the Senior Commissioner's approach was to be adopted, then enquiries might need to be made to identify the public amenities and services, if any, which the council provided to meet the existing demand and the source of the funds used for that purpose which would not necessarily be from the proceeds of the general rate. It might be sourced from government grants. Such historical enquiries, often lost in the mists of time, would be not only difficult but also unhelpful. Critically, they would tell the inquirer nothing that would assist in determining the issue posed by s 94(1). 61 Thus the present provisions of the statute neither expressly nor impliedly relate to the manner in which a council provides public amenities and services to meet the needs of past populations: rather, they are only concerned with ensuring that the present developer not be required to meet the needs that are not generated by the development in respect of which consent is being sought. 62 It follows from the foregoing that in my opinion the Senior Commissioner took into account an irrelevant consideration and in so doing erred in law. Once the Court was satisfied that the non-rateability approach involved an irrelevant consideration as a matter of construction of the statute, it was not in contest that that involved an error of law. It follows that the Senior Commissioner's decision should be set aside. 96Tobias JA then dealt with the question of whether the Court of Appeal should remit the matter for further consideration by the Land and Environment Court. At [65], His Honour states: I have already referred at [25] and [26] to the issues that the Senior Commissioner considered required his decision. The first issue involved the determination of the appropriate workforce population to be factored into the credit calculation. That population was determined at 229 and there is no contest with respect to that finding.... 97At [69], Tobias JA found that: Finally, it was neither suggested to the Senior Commissioner nor on the appeal that there should be a discount of the historical workforce population of 229 or to the rates of contribution applicable to that workforce other than as was advanced to the Senior Commissioner and rejected by him. In these circumstances it seems to me that no purpose would be served by remitting the matter for further consideration in the light of this Court's decision with respect to the sole basis upon which the Senior Commissioner determined to discount the credit to which Meriton was otherwise found to be prima facie entitled. 98Mr Russell submits that my discretion is limited by the decision of the Court of Appeal in Meriton No 3 which accepted a credit for the historical workforce of a site that was also formerly part of the BMC land and is now under the same contributions plan. The Court of Appeal clearly states that the question on appeal is the extent of a credit in circumstances where Moore SC had found that there was a basis for a credit. The consideration is confined to questions of law, in particular, whether the Commissioner considered an irrelevant matter, in exercising his discretion under s 94B (3), by determining that the credit should be reduced to reflect the period when rates were not paid. 99Having determined that rates are not a relevant consideration, it cannot be concluded that the fact that the Court of Appeal did not remit the matter means that I am bound to consider the historic population in the same manner as Moore SC or that the 'benchmark' date in the Plan has been found to be unreasonable by the Court of Appeal. The matter was not remitted as Moore SC had found that the appropriate historic workforce population to be factored into the credit calculation was 229 and 'there was no contest with respect to that finding'. Once 't he sole basis upon which Moore SC determined to discount the credit to which Meriton was otherwise found to be prima facie entitled' was found to be flawed then the credit remained unaltered. 100While, the Court of Appeal outlined the reasoning behind Moore SC determination of whether there was a basis for a credit it did not review the merits of that decision and it is open to me, on the facts and evidence before me, to apply a different reasoning and reach a different conclusion as to whether Condition 48 is unreasonable in the particular circumstances of this case. 101As discussed by the Court of Appeal, I am however, required to exercise my statutory discretion by reference to the subject matter, the scope and the purpose of the legislation that creates it (see Goldie v Commonwealth of Australia [2002] FCA 261at [45]). The Court of Appeal decision clearly articulates that the relevant provisions in ss 94 and 94B(3) of the Act are concerned with demand and that 'the developer is entitled to a credit for the demand created by the existing population, however determined.' 102As previously stated, Tobias JA at [59] outlines that to determine the nett demand for public amenities and services generated by a development requires a determination of existing demand for such services. Existing demand is based on the actual or deemed resident or workforce population on the site at the time of the development application. It is the reasonableness of the method for determining the 'deemed' workforce population on the site at the time of the development application that is in dispute between the parties. In particular, whether a condition requiring a monetary contribution that is based on the deemed population calculated in accordance with the 'benchmark' date in cl 2.15 of the Plan is reasonable. The structure of the Plan and its statutory framework 103To determine whether cl 2.15 is a reasonable method to establish the existing population and therefore the nett demand of a site it is necessary to understand the structure of the plan in the context of the planning framework within which it is made. 104Both Mr Russell and Mr Tomasetti provided an overview of the statutory framework and the structure of the plan. There is no dispute that the Plan was prepared in accordance with the requirements of the EPA Act, its Regulations and the Practice Notes. Significantly, Mr Russell did not raise issue with aspects of the plan such as contribution rates, nexus or apportionment other than the Policy for existing development in cl 2.15. 105The Regulation specifies the particulars which must be addressed in a contributions plan and the Practice Notes provides further, more detailed, information. It explains that the principles that underlie s 94 contributions are:
Orders 132The Orders of the Court are:
Meriton Apartments Pty Ltd
Council of the City of Sydney
(2006) 67 NSWLR 529
(2003) 58 NSWLR 159
(2005) 64 NSWLR 177