Meriton Property Services Pty Limited v Council of the City of Sydney

Site and Locality 8The sites are located in the Victoria Park precinct, within the boundaries of the Green Square urban renewal area. They run in a row from north to south within the South Dowling Street corridor and have two street frontages, South Dowling Street/Eastern Distributor to the east and Defries Avenue to the west. They are located about 1km from the Green Square railway station. 9The sites were originally part of a swamp, before they were drained in about 1904 and used as a racecourse until the 1940s. In about 1948, part of the area was sold to the British Motor Corporation (BMC) - then Leyland-, and used as a car manufacturing and assembly plant. The number of workers employed at the plant ranged from 150 at the commencement of the BMC operation in the early 1950s until it increased to around to 4000 in the 1960s with two shifts of workers. The maximum employment on the site was about 5000 workers in the early 1970s when the plant operated 24-hours per day with three shifts of workers. 10Motor vehicle manufacturing and assembly ceased in the 1970s. After 1975 the factory site was used as a storage facility for the Royal Australian Navy and included army workshops. The navy supply facility employed, at its peak, a maximum of 800 people. Between 1990 and 1995 the numbers declined to almost zero. It ceased operation in 1995 and the buildings remained vacant until they were demolished in 1999. 11In 1996 the State government established the South Sydney Development Corporation to co-ordinate and promote development in the South Sydney Growth Centre area, of which the old navy site was a part. In December 1997 the land was sold to Landcom. At that time, Landcom was a statutory body within the New South Wales Department of Urban Affairs and Planning; and, it is now a state owned corporation under the Landcom Act 2000. 12According to the evidence, Landcom functioned as master planner and developer of the site. It delivered the infrastructure and development guidelines for the private sector to construct buildings on the site. It delivered a draft master plan for the development of the former navy site to South Sydney Council in September 1998. The Council adopted the Victoria Park Masterplan on 10 December 1999. 13The Masterplan identified up to 2,500 dwellings to accommodate 3,800 residents, 115,000m2 of commercial office and retail space, with employment opportunities for up to 3000 workers. A total of 4.6 hectares (being 20% of the area) was allocated for open space. Landcom's early publicity included the observation that "The largely industrial nature of the district means that little community infrastructure exists. There is a limited number of childcare centres, fragmented retail and little in the way of community halls or activity centre. For this reason a number of facilities are to be included within the development." A due diligence report, prepared by the Department of Defence, identified some limited contamination of the site and ground water. It recorded that the site contained no services beyond high voltage power lines along Joynton Avenue, Link Road and O'Dea Avenue; perimeter street water mains on South Dowling Street, Joynton Avenue and O'Dea Avenue; and, two metered connections off the Joynton Avenue and connections to two sewer systems. The site ws not connected to the gas supply. 14Landcom's role was to subdivide and develop the site. The scope of works included the removal of the below and above ground structures, development of open space and construction of local infrastructure and services, including roads, sewers, stormwater management, water supply, the connection to power and the provision of telecommunications. Landcom met all infrastructure costs. An area of about 8800m2 along the eastern boundary was acquired by the RTA for the development of the Eastern Distributor, with the RTA holding a lease until 2001 for access and a temporary works deport. 15The development was staged; with stage 1 fronting Joynton Avenue. By 1999 development applications were being lodged for the stage 1 development including external works (intersections. verge restoration, traffic devices on Joynton Road) and internal works (on site) including road works. Pavement designs were required by the council to a standard of a life of 40 years. 16In September 2000 Landcom signed a memorandum of agreement with South Sydney Council for the infrastructure and public domain works. Under the agreement Landcom accrued credits for "in kind" contributions as the infrastructure and public domain works were delivered. South Sydney Council did not levy s94 contributions on the subdivision of Victoria Park; however, as land was on sold to private developers subsequent development application consents were levied with s94 contributions. South Sydney Council entered an in principle agreement with Landcom, providing that the latter would be reimbursed for "in kind" contributions made by it and would be reimbursed from s94 contributions collected by the Council. 17Following the amalgamation of South Sydney Council with the City of Sydney Council in 2003, a Contribution Credit Deed between the Council and Landcom was executed on 28 September 2007. This required the Council to reimburse Landcom for the "in kind" contributions provided including Joynton Park, Tote Park, Woolwash Park, the north-south road through the site, a water canal feature and traffic signals from the s94 contributions levied by conditions of consent for each development within Victoria Park. Since mid 2000 the Council has granted a number of consents within the Victoria Park locality and reimbursement from contributions received has been made to Landcom. 18The developments consents that are the topic of the present appeals are all within the Victoria Park precinct and are subject to the Council's CP2006. 19CP2006 commenced on 7 April 2007 and seeks to provide public services and amenities, the demand for which is generated between 2006 to 2021 (cl 4.12 of CP2006). It allows the Council to seek contributions from a developer toward the cost of the public services and amenities generated by the development being considered or the need for which is increased because of that development. Contributions may be in the form of money, land and /or work. 20Contributions levied on development under the CP2006 are determined based on the nett increase in the population of a development site. That is, it is only the nett additional demand generated by the development that is the subject of a development contribution. The site population expressed as equivalent residents is the basis used in CP2006 to determine net additional demand for the public services and public amenities included in the CP 2006 Schedule of works. 21Under C 2.15 of the Contributions Plan if a site is vacant at the time of the development application then the 2001 census is to be used as the benchmark date to determine if a former population can be construed as present or deemed to exist. The clause sets out circumstances where a credit will be determined to exist. It states " ...If a site the subject of a development application, notwithstanding the presence or otherwise of vacant buildings on the site, was vacant at the time of the most recent census on which the Contributions Plan is based and, therefore no population from the site was counted as part of the 2001 Census population cited in the Contributions Plan, then no part of that former population can be construed as "present ' or deemed to exist' for the purposes of securing a credit under this plan". 22The CP 2006 defines "existing population" to mean: " the population that exists on a site at the time of the application for the development consent or, in the case of a redevelopment site, which existed immediately prior to the point when occupiers began to vacate the site for the specific purpose of yielding the site for redevelopment. It categorically does not mean any population which departed the site prior to the most recent census for which figures were available at the time the contributions plan was written." 23When, applying cl 2.15 of the CP2006, if there is established to be an "existing population" on a development site, then cl 4.16 assists in determining both contribution amounts and worker credits for developments that contain employees. 24The development applications in these appeals were lodged with the Council in November 2010, December 2011 and August 2012 respectively. It is agreed that at the time of their lodgement there was no actual resident or workforce population on the sites. It is also agreed that at the date of the most recent census in 2001 the sites were clear of all buildings and unpopulated.

Council's Submissions 25The Council contends that the 2001 census date operates as a cut off for any peak workforce credits in these appeals. As there was no existing population on the sites at the relevant date, under cl 2.15 of the CP 2006 it cannot allow worker credits in calculating the s94 contribution for the developments based on any pre-existing or deemed workforce on the site prior to 1995. 26While the Council concedes that there may need to be a degree of flexibility in applying the benchmark date to ensure that a workforce population which has recently departed prior to that date is recognised, that recognition should only occur where it can be demonstrated that the historic population imposed a demand for the specific services to be provided by the Contributions Plan. 27However, in these appeals the public services and amenities generated by the proposed developments are specific and there is no identifiable (nexus) demand by the historical industrial workforce for the services and amenities now provided or proposed to be provided. It contends the developments, the subject of these appeals, do not involve an "increase in demand" for public services and amenities but, rather, a demand for the provision of specific public services and amenities. 28The Council's interpretation of the Plan is that if the 2001 threshold is not met, then a credit entitlement only arises if an applicant can establish a demand or actual need (or possibly desire) for the specific facilities whose establishment is provided for in the CP2006. 29The Council rejects the approach taken by the applicant that the historical workforce on the BMC site generated a "demand" for community and other facilities in a general sense; and, therefore, a credit is due in this particular case. It contends that the s94 contribution is not concerned with "amorphous" concepts of demand. Rather the question for the consent authority (now the Court) is whether the development the subject of the development applications will demand or require the provision of the particular amenities and services for which the Council has imposed a monetary contribution from the developer. 30While the specific demands of past workers on the site are not known, the Council submits that demands and expectations of workers up to 40 years ago would differ significantly from those considered appropriate at the present time. The occupants of the sites under the present development consents will have different demands and expectations to those workers of a past era. These sites were not recently vacated to facilitate the presently proposed developments. 31The Council contends that the worker credit relating to the Victoria Park redevelopment site has been comprehensively dealt by the Court in Meriton Apartments Pty Ltd v Council of the City of Sydney [2011] NSWLEC 1294 per Tuor C and the Court should adopt the same reasoning. 32There is a significant temporal disconnection in demand generated by the peak historical workforce on this site in 1975 and the developments before the Court. In short the specific facilities to be provided by the Council under the CP2006 were never demanded by the workforce that occupied the sites prior to 1996 (per Tuor C in Meriton at [119]-[120]).

Applicant's submissions 33The applicant concedes that the historical workforce present on the site did not use, and had no demand for, the specific facilities and services that the respondent has constructed and proposes to construct as detailed in CP2006. 34Similarly, it accepts that in determining s94 contributions under the Contributions Plan in this case: a) all residents and workers are treated as identical ,save (in the case of worker for the 4/5 discount) ;and b) that existing highest potential /current use is taken into account for development contributions calculations, so the developer only pays for that increase in need caused by the additional population arising from the proposed development and not an increase in need caused by such matter as changes in community attitudes and expectations. 35The applicant invites the Court to determine, as a matter of law, which of the above circumstances prevail in the context of s94 (1) of the Act. 36It contends that under CP2006 the developer only pays for the increase in need caused by the additional population arising from the proposed development; and, not an increase in need caused by matters such as change in community attitudes and expectations. 37Furthermore, it submits that there is no dispute between the parties or their experts as to the operation of CP2006 or appropriate planning principles in relation to historic workforces on sites which become vacant after the date of the 2001 census and which remain vacant during the life of the plan and for which a development application is made within the life of the plan. Those workforces will be counted for the purposes of the grant of a credit irrespective of whether or not any or all of them actually used, needed or desired any of the facilities whose establishment is provided for in the CP - and the additional population will similarly be taken into account for the purposes of determining the s94 contribution irrespective of whether or not any or all of them will actually use, need or desire, any of the facilities whose establishment is provided for in the CP. However, on the Council's interpretation, once the 2001 threshold is not met, a credit entitlement arises if, and only if, an applicant can establish an actual need (or possibly desire) for the specific facilities whose establishment is provided for in the CP 2006: (AWS at [8].). 38The applicant accepts that if the test to establish a credit is that contended by the Council then it must fail because it cannot establish that the historic workforce needed or desired such facilities as the Redfern Community Hall or Green Square Railway Station Bus Interchange. And while the incoming population may be thought unlikely to have need of the former, some use of the latter by them seems likely: (AWS at [13]). 39It contends that the "lack of symmetry" arising from the application of the test identified supports a finding that it is unreasonable in the context of s94B (3) of the Act. The applicant believes that the Council's reasoning produces unreasonable and illogical results and that the determination of whether a credit applies should not be dependent on subjective analysis of personal demands of past workers. 40The applicant believes that the Council's approach treats a credit as"discretion" or something in the way of a gift from the Council. Whereas the applicant contends that the accounting for a credit is a mechanical part of the plan, which should be construed as recognising the necessity for accounting for the history of land use: (AWS at [14]).

Consideration 41Section 94 of the Act provides: ENVIRONMENTAL PLANNING AND ASSESSMENT ACT 1979 - SECT 94 Contribution towards provision or improvement of amenities or services 94 Contribution towards provision or improvement of amenities or services (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 development 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. (5) The consent authority may accept: (a) the dedication of land in part or full satisfaction of a condition imposed in accordance with subsection (3), or (b) the provision of a material public benefit (other than the dedication of land or the payment of a monetary contribution) in part or full satisfaction of a condition imposed in accordance with subsection (1) or (3). (6) If a consent authority proposes to impose a condition in accordance with subsection (1) or (3) in respect of development, the consent authority must take into consideration any land, money or other material public benefit that the applicant has elsewhere dedicated or provided free of cost within the area (or any adjoining area) or previously paid to the consent authority, other than: (a) a benefit provided as a condition of the grant of development consent under this Act, or (b) a benefit excluded from consideration under section 93F (6). (7) If: (a) a condition imposed under subsection (1) or (3) in relation to development has been complied with, and (b) a public authority would, but for this subsection, be entitled under any other Act to require, in relation to or in connection with that development, a dedication of land or payment of money in respect of the provision of public amenities or public services or both, then, despite that other Act, compliance with the condition referred to in paragraph (a) is taken to have satisfied the requirement referred to in paragraph (b) to the extent of the value (determined, if the regulations so provide, in accordance with the regulations) of the land dedicated or the amount of money paid in compliance with the condition. 94B Section 94 or 94A conditions subject to contributions plan (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. (4) A condition under section 94A that is of a kind allowed by, and determined in accordance with, a contributions plan (or a direction of the Minister under this Division) may not be disallowed or amended by the Court on appeal. 42Section s94B (3) of the Act empowers the Court, on appeal, to reduce the amount of a contribution imposed under s94 if it is unreasonable in the particular circumstances: Rose Consulting Group v Baulkham Hills SC [2003] NSWCA 266:58 NSWLR 159. 43In exercising that discretion, however, I must pay heed to the subject matter, scope and purpose of the imposition of the condition requiring the payment of a monetary contribution under s94 (1) of the Act. That means I must have regard to the "net demand for public amenities and services generated by the development in question": (Meriton Apartments Pty Ltd Council of the City of Sydney [2011] NSWCA 17; 182LGERA 355 per Tobias JA at [56] - [58]). Tobias JA continues (at [61]) by saying that the Act is "... 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." 44There is no dispute between the parties that the development will generate a demand for the public amenities and services identified under the CP2006. 45However, in considering the net demand generated the Council believes the applicant is not entitled to a credit under cl 2.15 of CP2006 because the sites were not occupied (by workers or residents) at the date of the lodgement of the development applications. The evidence is that the sites were vacant at the benchmark date of 2001 Census; therefore, there is no basis under cl 2.15 of the CP2005 for a credit. It is also the Council's case that the exceptions do not apply to the facts of these appeals. The sites are not single residential allotments; the sites were not vacated to facilitate these development applications. 46The consideration of prior merit decisions is set out in Segal v Waverley Council (2005) 64 NSWLR 177 in that they have no binding precedent effect in my determination of these appeals. Despite that, the Council relies heavily on the reasoning of the Court in Meriton (the Tuor C decision) because it is factually similar and considered the application of the 2001 Census benchmark date in cl 2.15 of CP 2006 to determine the existing population of the site at [39]. In that case the Court determined that the years that has elapsed between the date of the development site's past peak population (early 1970s) and the 1996 demand assessment date meant that the site's past peak population had no relevant nexus with the set of specific amenities and services the subject of the contribution and; therefore, could not be held to be an existing demand for the purposes of determining a reasonable s94 contribution for the development. It also determined that for any historic workforce to be considered it should demonstrate a demand for the specific services to be provided by the plan at [121]. 47In this case the Council makes the same submissions. 48Although the applicant accepts the proposition that the historical workforce present on the subject site did not use, and had no demand for the specific facilities and services which the respondent has constructed and proposes to construct as detailed in the Council's CP2006, it argues, a credit should not be dependent on a subjective analysis of the personal demands of a past workforce. It embraces the reasoning in the Court of Appeal case of Meriton CA at [61] and submits that an historical inquiry about the specific needs of past workers in this case "tells the inquirer nothing that would assist in determining the issue posed by s94 (1)". 49I agree with the submission of the applicant that a credit is not "discretionary" or "something in the way of a gift from the Council". The Act and CP 2006 do not require an historical workforce to demonstrate a demand for the specific public amenities and services provided under CP2006 in order to obtain a credit. The determination of whether a credit applies on the facts of each case is a mechanical application of the particular Plan. And where the application of the Plan results in the imposition of an unreasonable s94 condition then the Court on appeal has power to address the issue under s94B (3). 50The applicant's contends that an unreasonable s94 condition has been imposed on these consents and the Court needs to address that under s94B (3). It invites the Court to consider the following: if the site is occupied at the benchmark date of the 2001 census then there is no need to inquire if the worker or resident demands the public amenity or service within CP2006 in order to get a credit. However, if the site is vacant (and the exceptions in cl 2.15 do not apply) then it is necessary to inquire into the specific demands of the past workforce in order to justify a credit. It poses the question if every worker is the same under the Plan, as conceded by Mr New, then why is it reasonable to inquire as to the specific demand in one circumstance and not in the other? 51In posing the question above the applicant assumes that a "past worker" on the site before the benchmark date is equal to a worker on the site after the benchmark date. However, the CP2006 does not recognise a "past worker" on the site before the benchmark date in the particular circumstances of this case. The question is does that result in the imposition of an unreasonable s94 condition in this case. Any general unreasonableness or inequity in the Plan cannot be addressed under in s94B (3). I cannot amend the Plan in these appeals. 52In my assessment of the evidence the use of an arbitrary benchmark date to determine if a former population is to be construed as "present" or "deemed to exist" is not necessarily unreasonable for the purpose of determining the existing demands for public services and amenities generated by a development. 53Where there is a temporal disconnect from the historical workforce on the site and the development proposed there must be a notional method to acknowledge past workers outside the benchmark date in CP2006. The requirement for an identifiable nexus of the historical workforce with the identified services and amenities in CP2006 is a reasonable method. 54In these appeals the site had been vacant for a significant period of years prior to the benchmark date in the CP2006 and, long before the lodgement of these development applications. At the time of the 2001 Census on 1 January 2001, the development site was clear of all buildings and was unpopulated. For the purposes of cl 2.15 there was no existing population on the site on that date and therefore the Plan gives no recognition of a past worker. In order to obtain a credit the Council contends that there must be some nexus demonstrated between the past workforce and the specific services and amenities. 55The fact that a site was developed with industrial buildings and was occupied or capable of being occupied by a significant number of workers some 40 years ago or with fewer workers 13 years ago does not of itself justify a credit in circumstances where the CP2006 does not provide for one. The CP2006 categorically states that it does not allow a credit for any population that departed the site at any time prior to the most recent development application unless it falls within the exceptions in cl 2.15. 56According to the development history given by Dr Fitzgerald there was little in the way of public amenities provided when BMC closed in 1974 or when the Navy occupied the site until it was vacated in 1995. In 1997 the land was sold to Landcom for rehabilitation and the development of infrastructure. The Victoria Park redefined Masterplan adopted by the Council provided for an entirely new development for this brown field site in 1999. 57Section 94 obliges the developer to make a contribution to the cost of identified community facilities and services for the net demand generated by the development. The developer is entitled to a credit for any demand already existing or not generated by the development for specific services and amenities. But under s94 the developer can only be required to delineate land or pay money to meet: a). a demand that is generated by its development ;or b). an increased demand: Meriton Apartments Pty Ltd v Council of the City of Sydney [2011] NSWCA 17 at [58]. 58I accept the evidence of Mr New in the joint statement at p6 that "It is the wholesale redevelopment of the Green Square area that requires the provision of the new roads, open spaces and community facilities in the Southern precinct included in CP2006.For these items, the fact that there were industrial buildings existing on the Victoria Park site for years before redevelopment, is not relevant to determining reasonable contribution for the VSQ2, VSQ3 and VSQ4 developments. For example Garigal Avenue (a specific CP2006 item, which has been constructed) is required to be provided regardless of the pre existing Victoria park workforce". 59In my assessment of the evidence there is nothing inherently unreasonable about a baseline contribution plan. It enables the consent authority to establish a baseline population to determine increasing population over the life of the contribution plan period or to a future baseline year. To the extent that it may work unreasonably in the particular circumstances of a case, s94B (3) allows the Court to adjust the contribution. It is one thing to have regard to a population that was on a site immediately prior to the baseline but it is quite another to have regard to a population on a site that occurred many years before the baseline commenced. If a past worker is to be recognised as the basis for a credit there must be some identifiable nexus with the identified amenities and services under the Plan to justify a credit. CP2006 seeks to recoup costs already incurred by the Council in providing public services and amenities in the locality since 1996 the demand for which was generated by development occurring after that time; and collect money to provide for the cost of new public services and amenities the demand for which is to be generated by future development in the locality up to 2021. 60Based on the evidence and my reasoning above I am satisfied that the s94 conditions imposed on the consents are not unreasonable. Therefore, I make the following orders:

Orders 61The orders of the Court are: In appeal number 10812 of 2012 the Court orders: (1)The appeal is dismissed. (2)The application for the modification of D/2011/64/1 for 10-12 Defries Avenue is refused. In appeal number 10813 of 2012 the Court orders: (1)The appeal is dismissed. (2)The application for the modification of D/2011/64/2 for 14 Defries Avenue is refused. In appeal number 10814 of 2012 the Court orders: (1)The appeal is dismissed. (2)The application for the modification of D/2010/639 for 8 Defries Avenue is refused. Susan Dixon Commissioner of the Court ANNEXURE A

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 23 April 2013