2 The subdivision will consist of common property, which will be a driveway, together with a small rear lot and a larger front lot. The front lot is of a size that it may be possible in the future that that lot be further subdivided into another two lots.

3 After the appeal was lodged with the tribunal the council considered the application and decided that a permit should be granted subject to nine conditions. One of those conditions requires the owner to pay to the council 2% of the site value of all the land in the subdivision pursuant to section 18 of the Subdivision Act 1988. The owner of the land contests that condition. The matter that the tribunal must determine today is whether or not the permit that is issued should or should not contain that condition.

4 A condition that money be paid by a landowner to a council is only a valid condition if it is specifically authorised by the planning scheme or by some Act of Parliament. It has always been a long standing principle of administrative law that conditions that seek to exact money, or are in the nature of a tax, should only be permitted if they are specifically authorised.

5 Provisions in relation to public open space contributions in Victorian law are complex. Traditionally those provisions were set out in the Local Government Act 1958 and the administration of those provisions was often the subject of dispute. In particular the principles which should be taken into account in guiding the exercise of the discretion to require such a contribution were always in doubt. It was common practice in the 1970s and early 1980s for councils to simply require 5% as a matter of course, whenever it was possible for the council to do so. In 1983, when I was a member of the Planning Appeals Board, I gave a decision in the case of Paul v City of Melbourne which expressed the view that there was no automatic right for a council to require 5%, but rather the discretion must be exercised having regard to the purpose of the provision. I further expressed the view that the key purpose was whether or not the subdivision would increase the need for public open space. Further, in that decision, I outlined a number of criteria which ought be taken into account in determining whether or not the discretion should be exercised and, if so, how it should be exercised.

6 As matters transpired, in 1988, the Subdivision Act was enacted and this replaced the Local Government Act provisions. In enacting that Act the Parliament initially did not specify any particular criteria, but in 1991 section 18(1A) was added into the Act. It adopted what I had said in Paul v City of Melbourne (almost word for word). Indeed, the only addition was section 18(1A) para (f), which had been hinted at in Paul, but listed as a supplementary matter rather than as a specific criterion.

7 Notwithstanding what was said in Paul v City of Melbourne, which is now effectively in the Subdivision Act, there has continued to be a practice amongst municipal councils of regarding the opportunity to impose a public open space levy as an opportunity to fill the council's coffers, to be used no doubt for good purposes, but without proper regard to the key issue: which is whether or not a subdivision increases the need for public open space. To some extent these matters were addressed when the VPP planning schemes were introduced, because it was at that stage when the opportunity always created by section 18(1) of the Subdivision Act was taken up, namely the opportunity to specify in planning schemes what contribution was required.

8 In the present case, clause 52.01 of the planning scheme provides that a person who proposes to subdivide land must make a contribution to the council for public open space in an amount specified in the schedule to the clause. In this case the schedule specifies various percentages for different types of subdivisions. Importantly for a subdivision that creates one additional lot no amount is specified. In such a case clause 52.01 provides simply that a contribution for public open space may still be required under section 18 of the Subdivision Act 1988. Hence it is to section 18 that we must look.

9 Looking to section 18 I note sub-section (8) which provides, relevantly, that a public open space requirement is not required if the subdivision subdivides land into two lots and the council considers it unlikely that each lot will be further subdivided. Council maintains that the front lot may be further subdivided and hence it has not formed the view that it is unlikely that the front lot will be further subdivided. I am not persuaded that the council is wrong in that regard. It may be that the nature of the building on the front lot and the nature of the occupant of that building is such that there is no present intention to subdivide the front lot but, bearing in mind the medium term and how things can change, I accept the council's argument that it could not be satisfied, and the tribunal should not be satisfied, that is unlikely that the front lot will be further subdivided. Hence there is power to impose a requirement in this case.

10 However the existence of a power and a discretion does not mean that it ought be exercised so as to make such a requirement. Indeed under section 18(1A) there is a limit on the exercise of that discretion and that limit is in the form that it is necessary for the tribunal hearing this matter on appeal from the council to be satisfied that, as a result of the subdivision, there will be a need for more open space. Given that there are already two dwellings on the land, and there have been two dwellings for over 50 years, I cannot see how the subdivision will have the result that there will be a need for more open space. Open space not only means hectares of open space, but also the quality of the open space.

11 But we have two dwellings on the land and the subdivision will make no difference to that. By facilitating the opportunity for the two existing dwelling to be on separate titles, it cannot be said that the subdivision will result in there being a need for more open space.

12 It is true that if the front lot is further subdivided into two, then there may not be an opportunity for imposing a public open space contribution on that subdivision, even though that may result in there being two houses on the front lot, or even three houses on the front lot, in lieu of the existing house. Why that might not be open is because of section 18(8). But the fact that there is a limitation on the imposition of a public open space requirement on certain types of subdivisions, such as certain minor two lot subdivisions, does not mean that the basic principles in section 18(1A) should be distorted.

13 Most relevantly, such an outcome would not mean that there is a need for more open space as a result of the subdivision hereby approved. Rather it would be that there would be a need for more open space by virtue of a subdivision that is yet to be put into effect, but is merely contemplated. If there is no power to impose a levy on this contemplated future subdivision, well that is, from the council's point of view, simply how the legislation operates and it is not a matter that is proper to be addressed now in relation to this subdivision.

14 It follows that condition 8 of the permit should not be included.