North Western Surveys Pty Limited v Penrith City Council

Issues for Determination 31The central issues for determination in this case is whether the conditions in dispute are can be imposed under ss 80A and 94 of the Act and are in the circumstances of the case reasonable. 32In order to answer the issues raised it is necessary to first identify the statutory source of the power for each condition: per Craig J in Cavasinni Constructions Pty Ltd v Fairfield City Council (2010) 173 LGERA at [463].

Condition 32 and 59 33Council contends that Condition 32 and 59 are imposed under s 94(1) (AWS para 20 - 21). 34Conditions involving the payment of a money contribution or the dedication of land may be imposed under s 94. Section 94 states: (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)... (2)... (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. 35Council contends that Condition 59 is lawfully imposed under s 94(1)(b) of the Act despite the fact that it applied " ...the draft 2010 plan which is still with the Minister, rather than the 2008 plan, which is technically still in force (para 9 of the applicant's written submission (AWS)). 36In short the Council did not apply the adopted s94 contributions plan in formulating the conditions. Instead it applied the 2008 plan revised by the draft 2010 to formulate the s 94 contribution (para 23 of AWS). 37This approach would appear to be in breach of s 94B (1) of the Act which states: (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). 38The Act makes provision for how a contributions plan might be created. This is addressed by s 94EA which provides: (1) A council, or two or more councils, 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). (2)... 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. (3)A council is, as soon as practicable after approving a contributions plan, to provide the Minister with a copy of the plan. 39The Regulations referred to in s 94EA are in the Environmental Planning and Assessment Regulation 2000 ("the Regulation"). Clause 27 of the Regulation deals with what a contributions plan must contain. It provides: (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, (f) if the plan authorises the imposition of a section 94A condition: (i) the percentage of the section 94A levy and, if the percentage differs for different types of development, the percentage of the levy for those different types of development, as specified in a schedule to the plan, and (ii) the manner (if any) in which the proposed cost of carrying out the development, after being determined by the consent authority, is to be adjusted to reflect quarterly or annual variations to readily accessible index figures adopted by the plan (such as a Consumer Price Index) between the date of that determination and the date the levy is required to be paid, (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. (2) In determining the section 94 contribution rates or section 94A levy percentages for different types of development, the council must take into consideration the conditions that may be imposed under section 80A (6) (b) of the Act or section 97 (1) (b) of the Local Government Act 1993. (3) A contributions plan must not contain a provision that authorises monetary section 94 contributions or section 94A levies paid for different purposes to be pooled and applied progressively for those purposes unless the council is satisfied that the pooling and progressive application of the money paid will not unreasonably prejudice the carrying into effect, within a reasonable time, of the purposes for which the money was originally paid. 40A draft contribution plan forwarded to the Minister is not a contribution plan under the Act or the Regulations. Council's planning report of 27 June 2011 acknowledges as much "... L&E court (is) obliged to consider the current statutory position and ministerial directions in relation to these applications. It is possible that (it) may not be able to support council's policy position" [Exhibit 2 tab 7 p53]. 41The evidence discloses that Council resolved to apply the draft plan with respect to this development application "...until the issues relating to the development contributions plans are resolved with the state government...one significant benefit of the approach is that the current plans would not need... referral to I PART...This means that Council retains its current authority over the content of the plans and the range and standard of facilities it funds ." (Exhibit 2 tab 7 p 55). It is also relevant to note that at that time council also resolved to take up "Option 2" [Exhibit 2 tab p56] which involves the following actions: (1)Levy contributions up to $30,000 cap; (2)Use these contributions to fund recreation, community and selected roads facilities in the WELL s 94 plan, and the revised District Open Space and Cultural Facilities Plan; (3)Require all drainage works across the WELL precinct to be provided by proponents (through conditions of consent); (1)Require road works (where costs are 100 percent apportioned and the Caddens sub precincts) to be provided by proponents through conditions of consent; (2)Reduce the level of funding to embellish a 2.06 ha passage of open space (as it is substantially treed); (3)Delete proposed contributions towards employment of a community place manager in (as this function is not considered essential; (4)Delete funding for intersection upgrade, as the necessary works have recently been completed under the federal government black spot program. ( Tab 7 p 55 of Exhibit 2). 42In attempting to grapple with the difficult consequence of the cap council determined that " this policy achieves satisfactory delivery of infrastructure in accordance with the relevant contributions plans by other means " (exhibit 2 tab 7 p 57) and avoids the earlier practice adopted by Council on 21 June of " ...deferring the issue of development consents for developing applications where development contributions in excess of $20,000 would otherwise be charged, until such time as satisfactory arrangements are made for the funding and delivery of all infrastructure identified in the relevant development control plan through a legally binding commitment with the applicant or through other appropriate means ." (Exhibit 2 tab 7 p 52).

Finding conditions 32 and 59 43While I appreciate the dilemma the cap caused for council and the delivery of planned development and infrastructure envisaged by the site-specific planning controls I am unable to support the imposition of conditions 32 and 59. 44Based on the evidence before me the condition 59 levies a monetary contribution of $2.08 million that is not calculated in accordance with the adopted s 94 plan 2008 subject to the Minister's Direction. Nor does it levy for essential works listed in the adopted 2008 contributions plan. In particular there is no levy for drainage works despite the plan's schedule of works. Furthermore, the rates disclosed are different to those permitted by the adopted Well contributions plan. For example the rate for road works is significantly lower than the adopted rate. The fact that the draft plan contributions are substantially smaller because of the revisions of the earlier plan works and land acquisition lists does not make the approach taken by council legal or reasonable in the circumstances of this case. 45I accept the applicant's submission that the council has "cherry picked" items and imposed rates from the adopted plan as modified by the draft 2010 plan that would bring the calculated amount within the Ministerial cap. The Act does not allow the applicant or the council to elect the s 94 contributions plan or adopt what Council describes as a "policy approach" to development contributions. The council cannot cherry pick from the draft or adopted plan to "...enable development to proceed and new housing to be delivered in the Well precinct and the broader citywide objectives to be met [and] require developers to construct the necessary drainage works and road works and seek contributions to fund recreation, community and selected road facilities, together with district open space and cultural facilities plans. " (Exhibit 2 tab 7) 46I accept the applicant's submissions (at paragraphs [122 -129] AWS) that condition 59 is not authorized by the Act. Condition 59 is not of a kind allowed by, and is determined in accordance with, a contributions plan. Section 94B (1) of the Act 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). 47While the Court has power on appeal to disallow or amend a s94 condition under 94B(3) if it is "...unreasonable in the particular circumstances of that case, even if it was determined in accordance with the relevant contributions plan (or direction)" the first step must be to "... identify the statutory source of the power for each condition : per Craig J in Cavasinni Constructions Pty Ltd v Fairfield City Council (2010) 173 LGERA at [463] before any consideration of the reasonableness of a condition in the circumstances of the case. 48Based on the evidence I do not think conditions 59 and 32 are reasonable in the particular circumstances of this case. The conditions imposes a monetary contribution under s 94 for non-essential works based on a draft plan and then purports to require the applicant to pay for the essential works identified in the adopted plan by others means namely: s 80A conditions. This approach frustrates the intention of the cap and the purpose of the Direction that seeks to " lower development charges for infrastructure and to stimulate housing construction " (Exhibit 3 p 1).

Conditions 33, 34, 36 49Council submits that because it did not impose a requirement for payment of monetary contributions for drainage and water management; or require payment of so much of the roads contribution as related to the construction of O'Connell Lane or Caddens Road these works can be required by condition under s 80A of the Act. This is because the conditions relating to works and the dedication of land are not controlled by the terms of the s94E (1)(b)(ii) Direction. It submits that the Direction does no more that place a cap on monetary contributions. 50For that reason council contends that the work conditions of the consent cannot be unlawful for any reason associated with the exceeding of the cap (CWS par [38]). 51The applicant disagrees. It submits that where the developer pays money, provides the land or undertakes "works in kind' the intention of the Direction remains the same: that the total cost burden imposed upon the developer directly or indirectly is $30,000 per lot. Where this amount will not cover the cost of "essential services" council may apply for funding assistance from the state government. The applicant contends that the council's policy approach outlined in Option 2 seeks to avoid the intent of the cap. Instead the conditions impose a requirement (by a condition of development consent) that the applicant pay cash for non-essential works (condition 59) and then argue that it has no funding for essential works so it must get the developer to construct them instead as a condition under s 80(1)(f) of the Act. (AWS para 87 at p44). 52In order to address the issues raised I need to determine whether the work conditions imposed under s 80A can be primarily characterised as the provision of a public amenity and not sufficiently connected to the development to justify imposition under s 80A of the Act. 53Section 80A of the Act provides: A condition of development consent may be imposed if: (a) it relates to any matter referred to in section 79C (1) of relevance to the development the subject of the consent, or (b)... (c)... (f) it requires the carrying out of works (whether or not being works on land to which the application relates) relating to any matter referred to in section 79C (1) applicable to the development the subject of the consent, or (g)- (h) it is authorised to be imposed under section 80 (3) or (5), subsections (5)-(9) of this section or section 94, 94A, 94EF or 94F. 54The case law is clear conditions requiring works cannot be imposed under s94 conditions : Fairfield City Council v N & S Olivieri Pty Limited [2003] NSWCA 41 at [22] -[26] per Spigelman CJ, [44]-[46] per Santow JA, and [71]-[77] per Cripps AJA. 55Section 80A(1)(f) allows the imposition of a condition if it requires the carrying out of works (whether or not being works on land to which the application relates) relating to any matter referred to in s 79C(1) applicable to the development the subject of the appeal. 56In Cavasinni the Court held that "s 80A(1)(a) requires two matters to be addressed. The first is whether the condition relates to a matter referred to in s 79C(1) and the second requires a determination as to whether such matter is relevant to the particular development for which development consent has been or is proposed to be granted". The same can be said for s 80A(f). 57The Court must be satisfied, if the conditions are to be imposed under s 80A(f) that they relate to any matter referred to in s 79C(1) applicable to the development the subject of the consent . 58The applicant contends that the conditions do not relate to any matter referred to in s 79C(1) but rather to matters under ss 94 and 94B (although they are masked as conditions for works.) With respect to the second requirement i n s 80A(1)(a) it submits that the nature and scope of the works required by the conditions cannot be said to be applicable to the development the subject of the development application. Therefore it submits that the works conditions are not validly imposed under s 80A(f) and as currently drafted should be deleted. Nor do they satisfy the tests in Newbury District Council v Secretary of State for the Environment [1981] AC 578 at 697G. 59In Olivieri the condition under consideration requiring road works related to works that were not within the relevant contribution plans and the Court determined that they could not be characterised as primarily for the provision of a public amenity. Relevantly, Spigelman CJ at para 23 of Olivieri said: " No doubt, if a particular work, required to be carried out pursuant to such a condition, can be characterized primarily as the provision of a public amenity, then its connection with the development may not be regarded as sufficiently close ".

Finding 60The facts in this appeal are very different to Olivieri . The works the subject of the conditions under s 80A(f) to Caddens Road, O'Connell Lane and to the drainage Basin are works that can be "characterized primarily as the provision of a public amenity". They are all within the WELL Contributions Plan. They could not have been included if they had not provided a public amenity. The evidence supports finding that the works are more than applicable to the needs of this development. They are applicable to the greater community than just the residents of this development. I do not accept that they can be imposed under s 80A(f). I accept the applicant's submissions that they are really s 94 conditions. 61Mr Brindle said that the works in the s 80A(f) conditions directly relate to the development the subject of the appeal. He referred to the fact that they are specifically detailed in the applicant's development application, which seeks consent for a detention basin, and bio-retention pond with associated gross pollutant traps to detain and treat storm water from the development. Furthermore, he said that the works accord with those identified in the master planning for the Caddens release area in the WELL Precinct - Hydrology and Catchment prepared by the Cardo Willing Management Study prepared in August 2006. He told me that Caddens Road provides primary access to the site until O'Connell Lane is constructed to the north to connect to the highway and the proposed Caddens Bypass. Thereafter the O'Connell Lane upgrade will provide access to the development. He said the drainage infrastructure in and across this road serves the development. In short his evidence is that the works in the conditions have a direct relationship with the subdivision development and are matters referred to in s 79C(1) of the Act, and benefit the development and can reasonably be imposed under s 80A(1)(f). 62Furthermore, Mr Brindle's said that the dedication of the land on which the drainage works is to be located (condition 32) is a normal part of subdivision; no different to the dedication of land for public roads (Exhibit 11 p 11). He does not support any credit or off set for the dedication or the works against condition 59. This is because the estimated costs of the engineering works alone is $29,403 per lot and if the works were accepted as a material public benefit under 2.13 of the contributions plan and offset against condition 59 the result would be no contribution toward the cost of other facilities and services to be provided under the contributions plans. (Exhibit 11 p13). 63The applicant does not accept Mr Brindle's assessment that the primary purpose of the drainage works and detention basis is to serve the proposed development. Relying on Mr Barwick's evidence it submits that the design of the drainage works follows the zoning of the land under the LEP (Special Infrastructure 2) and the adopted Development Control Plan requirements. His evidence is that the LEP 2009 and DCP foreshadowed the system required, nominated where the public land would be located and what size the facilities needed to be [Exhibit 2 volume 1 tab 15 p15 to 23]. The proposed basin is sized to cater for a 12 Ha catchment whilst the proposed development site occupies only 40- 45% of the catchment (Exhibit A, Vol1 tab9 para 36). The design of the drainage also followed the intent of the contributions plan 2008. These works should be characterized primarily as the provision of a public amenity" and cannot be a work condition under s 80A(f). 64The applicant also takes issue with Mr Brindle's assessment that the road works are integral to the development "in providing safe and efficient means of access from the proposed lots to the surrounding arterial road network" [Exhibit 11 p10]. It asks the Court to accept Mr Wilkinson's evidence that O'Connell Lane is a Collector Road and typically designed to cater for traffic volumes in the order of 2,000 to 10,000 vehicle trips per day well in excess of that generated by the development. [Exhibit A, Vol 1, tab 9). The applicant's evidence is that the roads are designed to meet the demand generated from the development over the whole of the precinct and not just the subject land. Again these works should be " characterized primarily as the provision of a public amenity" and cannot be the subject of a work condition under s 80A(f). 65The applicant submits that the works nominated in Council's adopted contributions plans and are not solely generated by the development they provide a public amenity. This is demonstrated by the fact that the council received public funding to construct O'Connell Lane from the Department of Planning but elected to impose that obligation on the applicant via a condition to construct a substantial part of it. 66Conditions 32, 33, 34 and 36 taken together require dedication to council, at no cost, the land on which the detention basin is to be constructed. According to the applicant the only statutory basis for these conditions is s 94: Maitland City Council v Anambah Homes Pty Ltd (2005) 147 LGERA 234 at 239. 67Based on the evidence I accept that I submission. However, as drafted they offend the principles of apportionment embodied in s 94 of the Act as discussed by the Court of Appeal in Meriton Apartments Pty Ltd v Council of the City Of Sydney [2011] NSWCA 17 at [59]. 68The case law is clear a dedication can only be required as a reasonable response to the need for public services and public amenities generated by the development. Both parties' experts agree that the detention basin, and, therefore the land on which it is situated, serves a far greater catchment than just this development. 69Based on the evidence I accept that the dedication of the basin land is unreasonable and ss 94(1) and (2) of the Act does not authorize the imposition of such a condition (AWS para 90). I accept that s 94(5) of the Act and clause 2.13 of the contributions plan provide opportunity for council to accept an in kind contribution in lieu of a cash contribution. Therefore, the dedication of the land for the basin can be authorized by s 94 in circumstances where its value is to be offset against the cash contribution payable. The current conditions however require dedication of land in addition to a monetary contribution. 70I accept the applicant's submission based on the evidence that the conditions imposed by the council cannot be justified on the evidence. They are unreasonable and should be deleted for the reasons detailed above. 71I am of the opinion that the applicant's draft conditions (which include schedule 1) should be imposed in place of the council's conditions. They have been prepared in accordance with the Act, the council's planning controls, and the contributions plans adopted by council and subject to the Ministerial Direction. The adopted contributions plan costs the works and Mr Barwick has applied those costing in the draft conditions as set out in schedule 1. 72I accept the applicant's submission that the Court has power to impose the applicant's conditions under s 94(1), (3) and (5) and s 94B of the Act and s 94E. Council's adopted contributions plan in 2.1.3 deals specifically with works in kind offers and material public benefits and the development application lodged offers works in kind in lieu of monetary contributions. The Court's power under s 39(2) was discussed in Goldberg v Waverley Council [2007] 156 LGERA 27 and more recently in Sydney City Council v Ipoh Pty Limited (2006) 149 LGERA 329. It is a broad power which gives the Court "...all the functions and discretions which the person or body whose decision is the subject of the appeal had in respect of the matter the subject of the appeal ". 73The subject matter of this appeal includes offers of works in kind and material public benefit offers and the contributions plan (2.1.3) invites works in kind in lieu of monetary payments. Under s 39(2) I have all the functions and discretions in respect of the subject matter of the appeal. Therefore, it is within power to impose the conditions proposed by the applicant including acceptance of the applicant's works in kind offer. 74According to the council's evidence in (Exhibit 8) it has made no application for a grant under the PIF or for a special rate variation to cover any shortfall in infrastructure funding caused by the cap. Nor has it agitated the possibility of proceeding with the construction works to O'Connell Lane funded by the state government loan that has now lapsed (Exhibit 9). Instead council has elected to pursue its application to the Minister to have the WELL precinct exempted from the cap and the revised 2010 s 94 plan made. The evidence is that this application has been pending for some 18 months and development applications have been deferred pending a response up until this application. 75Mindful that council still has opportunity to pursue funding to cover any shortfall in funding for essential works I am satisfied that the development consent assessed and approved by council is acceptable under s 79C of the Act and that adequate public services and amenities will be available to serve the needs of the residents of the precinct. 76On 30 December 2011 I handed down the following preliminary findings: (1)The appeal is upheld. (2)The applicant is directed to forward to the Court a copy of its proposed conditions in exhibit G including schedule 1 prepared by Mr Barwick in an electronic form. (3)The matter is stood over for the making of final Orders and written judgment on 30 January 2012. 77Having received the conditions and schedule requested I now make the following Orders: (1)The appeal is upheld. (2)Development consent is granted to DA 11/0123 for the subdivision of property at 159 - 169 Caddens Road Kingswood NSW into 71 residential lots and 1 residual lot, roads and detention basin subject to the conditions in annexure A. (3)The exhibits are returned. Susan Dixon Commissioner of the Court APPENDIX A SCHEDULE ANNEXURE A

Amendments 06 June 2012 - Correct conditions of consent attached in accordance with the Slip Rule sent to parties on the 5 June 2012. Amended paragraphs: 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: 06 June 2012