Grochchowski v. Glen Eira CC [2004] VCAT 602

Rectangle of land on the southwest corner of the intersection of Arthur Street and Hawthorn Road with a frontage of 43.15m to the west side of Hawthorn Road, an abutment of 56.69m to the south side of Arthur Street and an area of 2446m2 approximately.

[2006] VCAT 645

This application for review is dismissed and I direct pursuant to s 85(1)(e) of the Planning and Environment Act 1987 that Planning Permit GE/PP-17952/2005 issued on 31 October 2005 allowing a 56 lot subdivision of the land being 15 Hawthorn Road, North Caulfield must contain condition 4 of the permit as it appeared in the permit when originally issued.

Mr John Cicero, solicitor of the firm of Best Hooper, solicitors, appeared for the applicant. He presented written and oral submissions.

Ms Nicky McNeilage, town planner of the City of Glen Eira and Mr Tim Power, solicitor of the firm of Freehills, solicitors, appeared for the Responsible Authority. They made oral submissions and each tendered a written submission.

Various plans, photographs and other documents were tendered. The evidence and submissions in documentary form have been retained on the file of the Tribunal.

Application under s 80 of the Planning and Environment Act 1987 (PE Act) for review of a condition in a permit.

Residential 1 Zone and subject to a Development Contributions Plan Overlay under the Glen Eira Planning Scheme.

Condition 4 on Planning Permit GE/PP-17952/2005 issued by the Responsible Authority on 31 October 2005.

The subdivision is a Class 1 subdivision under Clause 52.01 of the Glen Eira Planning Scheme and is therefore exempt from a public open space requirement because each lot contains part of the building.

This proceeding was originally commenced in the name of "MJ Parsons & Associates". That is apparently a firm name or a business name. The actual principal carrying on business under that name is "Max Parsons". The proceeding should be in the name of a real person, whether human or corporate. An amendment was granted by consent at the beginning of the hearing so that the applicant for permit and the applicant for review is "Max Parsons".

Permit Condition Requiring Public Open Space Contribution

1 This case concerns a subdivision of the review site into 56 lots plus some common property. A permit for this subdivision has been granted. The present case seeks a review of the inclusion of one of the conditions in the permit. The condition in question is condition No. 4 which reads:

4. A cash contribution equal to 4.25% of the value of the land must be paid to Council for open space in accordance with Clause 52.01 of the Glen Eira Planning Scheme. This payment must be made before the issue of a Statement of Compliance. Council may vary the valuation in accordance with Section 19(5) of the Subdivision Act 1988.

2 The primary contention of the applicant is that this permit containing that contribution should not be included in the permit. He has a fall back position which I will discuss later.

3 The requirement is imposed pursuant to Clause 52.01 of the planning scheme. That clause deals with public open space contributions and subdivision. It is a successor to s 18 of the Subdivision Act 1988 under which contributions for public open space were commonly previously imposed. In fact, s 18 remains a default provision if Clause 52.01 is not operative.

4 Before the Subdivision Act somewhat similar provisions were found in the Local Government Act 1958 and s 21A of the Building Control Act 1981.

5 The fundamental idea behind all these provisions is that subdivision of residential, industrial or commercial land for such purposes can increase the need and demand for public open space in a particular area. These provisions impose arrangements whereby a subdivider can be required to make a contribution to the Municipal Council of land or cash or a combination of land and cash to meet the increased need for public open space occasioned by the subdivision.

Clause 52.01 of Planning Scheme imposing Requirement for Public Open Space Contribution.

6 The imposition of this requirement under Clause 52.01 appears in the first paragraph of that clause. It reads:

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

7 The decision is to whether such a contribution is to be land or cash or a combination of both is a decision that the Council has the right to make. As can be seen from condition 4, in this case the Council has elected to take cash rather than land or a combination.

8 The contribution is to be a percentage of the site value of the land. The land, in this context, means all of the land included in the subdivision. In the first line of the quoted paragraph it refers to a person who proposes to "subdivide land". That land is the land, the site value of which is used to calculate a contribution.

9 The site value means the unimproved value of the land, or the value of the land without any buildings or other improvements. If there are buildings or other improvements their value is disregarded in assessing the site value, or rather, the site value is assessed as if they were not there.

10 The percentage of the site value is determined in accordance with the schedule to the clause. These schedules vary from municipality to municipality. The schedule to Clause 52.01 in the Glen Eira Planning Scheme contains a fairly complex formula for working out what the percentage should be in a particular case, in accordance with Table 1 of the Schedule. It is common ground, in this case, that if a public open space is correctly imposed pursuant to Clause 52.01, then the percentage of the site value in this case is 4.25%.

11 The second paragraph in Clause 52.01 is clearly intended to ensure that a public open space contribution is required only once in relation to any land to be subdivided. However, it goes on to say that:

This does not apply to the subdivision of a building if a public open space requirement was made under Section 569H of the Local Government Act 1958 or Section 21A of the Building Control Act 1981 when the building was constructed.

12 It can be noted here that there is reference to the subdivision of a building. Mr Cicero, who appeared for the applicant, sought to base some arguments on a supposed distinction between the subdivision of a building as opposed to the subdivision of land. However, I am satisfied that land includes the air space above the surface of land and what might be called the dirt space under it. It also includes any fixtures on the land including any buildings. Thus, a building is land. A building might be subdivided into separate lots. A multi storey building might be subdivided into a number of lots on various levels. In every instance however these lots are "land" for the purpose of the subdivision, even if some of them are up in the air and have no contact with the earth.

13 The hearing before me proceeded on the basis that there has not been an earlier contribution for public open space in relation to the land or any building on it. Mr Cicero observed on several occasions that he was not able to assure me that no such previous contribution has been made. However, I am satisfied, on the balance of probabilities, that it has not. I feel some confidence that if there had been such a prior contribution the Council and/or the applicant would make it known to me. When I say the applicant, I am conscious that Mr Parsons, in acting in this matter, did so as agent for a client of his. Nevertheless, where trouble and expense has been gone to in commencing these proceedings, which seeks to avoid a public open space contribution, it would certainly make sense for instructions to be given, and if necessary inquiries to be made, to ascertain whether there has been a past contribution. Furthermore, the Council should have records of such matters. If would be inequitable for it to suppress such knowledge, if it knew that a prior contribution had been made. At any event, as I have said, the case proceeded on the basis that no such prior contribution has been made.

Exemption from POS Contribution for Class 1 Subdivisions

14 Considering these first two paragraphs at Clause 52.01, a general rule has been created whereby a public open space contribution is to be made with the amount (if in cash) calculated in accordance with the Table in the schedule. I note that the first paragraph says that a person who proposes to subdivide land "must" make a contribution for public open space. It is not discretionary where the obligation arises.

15 Having established this general rule, the third, and last, paragraph under Clause 52.01 provides several exemptions. There are three sub-paragraphs under this third paragraph, each containing an exemption. It is only the first that is relevant in this case.

16 This first sub-paragraph of the third paragraph of Clause 52.01 provides an exemption in either of two classes of subdivision. In the present case it is only the first class that is relevant. I will now set out the relevant formulation in relation to Class 1. In doing so I leave off some words at the end, which have no application in the present case.

17 Thus, Class 1 of subdivision which enjoys exemption is:

Class 1: The subdivision of a building used for residential purposes provided each lot contains part of the building. The building must have been constructed or used for residential purposes immediately before 30 October 1989 ...

18 It is apparent that this "magic date" of 30 October 1989 is of some considerable importance. Class 1 does not apply to a building constructed or first used for residential purposes after 30 October 1989. Furthermore, Class 1 does not apply to the subdivision of such a residential building, even if it was constructed or used for residential purposes immediately before 30 October 1989 unless each lot created contains part of the building. If one lot does not contain any part of the pre 1989 building, then subdivision is not Class 1 and not exempt.

19 That then brings me to the buildings constructed on the land. A substantial two storey residential building was constructed and used for residential purposes prior to 30 October 1989. There are 48 dwelling units or flats in this original building. The building is set out around four sides of a square with a substantial courtyard in the middle. There are various entries and exits into this courtyard through the building at ground floor level. However, at first floor level the building runs continuously around the courtyard without a break.

20 In fact, apart from the main hollow square building, there are a couple of buildings within the courtyard area. One is apparently an outbuilding or ancillary building of some sort, but one contains four of the 48 dwellings, two at ground floor level, and two at first floor level. A third building contains two dwellings, one at ground floor level and one at first floor.

21 If this building, or these buildings, had been left in their original state and not extended or had "buildings" added, then a 48 lot subdivision would have qualified for the exemption, provided that part of the original building or buildings was in each lot.

22 That, however, has not been the subsequent history of the site. Further new building works were carried out in 2005 whereby a structure was erected within the courtyard containing eight new dwellings, four at ground floor level, and four at first floor level. This is not a wholly detached building. It is attached to one of the structures in the courtyard. This structure is the one that contains two dwellings, one at ground floor and one at first floor. Mr Cicero has referred to this new structure as being an extension to the existing building or an existing building. Perhaps it is simpler if I just referred to the original building or buildings as the original building, as I do not think that anything material turned on whether it was one or two or more.

23 Thus, all the accommodation now on the site to 56 dwelling units, 48 in the original structure, and 8 in the 2005 addition.

24 The current subdivision is a subdivision of the whole site and all the building or buildings on it. There are 56 lots and containing a dwelling, and various areas of common property inside and outside the courtyard with various facilities such as landscaping and car parking spaces.

25 The question thus arises as to how Clause 52.01 of the planning scheme applies to this subdivision. In particular, is it exempt as a Class 1 subdivision so that no public open space contribution is payable at all? If it is not exempt, then a contribution must be paid, the amount of which is to be determined in accordance with the Schedule. It needs to be borne in mind that this subdivision is a subdivision, not two subdivisions. It either is a Class 1 subdivision, or it is not. It is not half and half. That would only be possible in the event of two subdivisions. Mr Cicero, of course, seeks to rely on the circumstance that the original building was constructed and used for residential purposes prior to 30 October 1989 and the fact that 48 of the lots created contain parts of that building. So far so good. However, his difficulty is that there are now eight lots in the subdivision, which are every bit as much a part of the subdivision as any other lots, which do not contain any part of that original building.

26 In the course of the hearing we descended to some minute points in determining where the divisions between lots are located and whether part of any walls or any little bits of the original building are in any of the eight lots. I do not find it necessary to go into those minute points here. I am, in fact satisfied, that these eight do not contain parts of the original building. However, even if one or two do contain some little bits, I consider it to be perfectly clear that at least some of them contain no parts of the original building. It is to be remembered that if there is one lot that does not contain a part of the building, then that is enough to defeat the exemption on the basis of a Class 1 subdivision.

27 Mr Cicero seeks to get around this point by arguing that a Class 1 subdivision is the subdivision of a building, and once a building has been constructed and used for residential purposes immediately prior to 30 October 1989 it, and every part of it, continues to be effectively Class 1 for subdivision purposes, even extensions created after 30 October 1989. He says, in effect, it was one building when originally constructed and it continues to be one building now, an enlarged building which includes the 2005 addition and extension. It is enough that each lot contains part of the extended building. It does not matter if some contain only parts of building that are post 1989 additions.

28 He has chosen to use the term "building" in what might be an ordinary or colloquial sense, but in doing so he is ignoring the applicable statutory definitions of building in both the Subdivision Act and the Planning and Environment Act. The Planning and Environment Act definition carries through into the planning scheme, and thus is at least normally the applicable to the meaning of the term in Clause 52.01. These statutory definitions are extended definitions that take the concept of building beyond what that word might mean in ordinary English. In both Acts building also "includes" various things that would not normally be regarded as a building. These include a structure or part of a building or a structure. Thus, the 2005 extension was itself a building, whether or not it was attached to, or even structurally part of, the original building. (Oddly enough, Mr Cicero ignored this point for his principal submission, but recognised and adopted it for his fall back position that I will deal with later).

29 I am satisfied that the contrary interpretation and analysis, urged on me on behalf of the Responsible Authority by Mr Power is the correct approach.

30 Firstly, the subdivision of a building is a subdivision of land. In this case, it is the subdivision of a building or buildings and the subdivision of land in the sense of earth. The earth is integral to the subdivision, just as the building or buildings and their various parts are. First of all the buildings sit on the land, and secondly the common property areas are part of the subdivision.

31 Mr Power urges "building" that appears three times in the quotation above of the formulation of a Class 1 subdivision means one and the same thing in each instance. In other words, the building being subdivided is the same thing as the building, part of which must be contained in each lot and, again, is the same thing as the building that must have been constructed or used for residential purposes prior to 30 October 1989.

32 He admits that if the only building in the subdivision was the original 48 dwelling structure, all would be well for the applicant and the exemption would apply. However, because of the 2005 extension we now have eight lots that do not contain any part of the building being the pre 30 October 1989 building. It only needs there to be one such lot for the Class 1 classification to fail in relation to the subdivision. It does fail for this reason, therefore the exemption fails. In the absence of the exemption, then the clause requiring the contribution which "must" be paid operates in the normal fashion so that the only remaining task is to calculate the amount in accordance with the schedule.

33 In support of his argument Mr Power calls in aide a passage from the Judgment of Byrne J of the Supreme Court of Victoria in his Judgment in Port Phillip City Council v Domain Hill Properties Pty Ltd [1998] VSC 35; (1989) 102 LGERA 11 at 15. There his Honour considers the two sentences quoted above containing the formulation for defining a Class 1 subdivision. Mr Power points to His Honour saying that the word "building" in the opening words of the second sentence must refer to the building in the first sentence. In this connection he quotes the following passage:

As a matter of ordinary interpretation of the document, the word "building" in the opening words of the second sentence must refer to the building in the first sentence, that is a building which has been or is being constructed as a residential building. In order to satisfy the requirements of this sentence, it is this construction work which must be completed before the commencement date or a planning permit for this construction must have been issued before that date.

This quotation refers to a prior version of the Class 1 definition and in doing so refers to a commencement date which, in the current planning scheme is specified as 30 October 1989.

34 I consider that Mr Power's argument is correct and that it is supported by the Domain Hill Properties case. Because this subdivision involves lots that do not contain parts of the original pre 30 October 1989 building, the attempt to define it as a Class 1 subdivision to which the exemption applies must fail.

35 Mr Cicero complains that this is anomalous and unfair. It may be. However, as the President of this Tribunal observed in Grochowski v Glen Eira CC [2004] VCAT 602, if it is the law, then it is the law. If there is no discretion, then there is no discretion. If the requirement of a contribution is mandatory, then it is mandatory. In fact, in the slightly different circumstances of that case, His Honour thought that the law there did apply unfairly. He said at paragraph 6:

Applying this logic it does seem to me unfair that the applicant in this case should pay the contribution. But where an amount is specified in the planning scheme, there is no discretion; and it is a case of determining the meaning of the planning scheme provisions and then applying them.

What this case shows is that when strict rules are designed without some overriding discretion to deal with anomalous situations injustice can arise. It is the task of courts and tribunals, as best they can, to seek to achieve justice; but, in doing so, they are bound to apply the law. In this case, I regard myself as having no choice but to disallow the appeal because the exemption does not apply.

37 I am not sure that injustice is quite so apparent in the current case, but I am certainly similarly bound to disallow this review because the exemption does not apply.

38 Mr Cicero's arguments in relation to suggested injustice or anomaly perhaps really indicates that it may have been possible with forethought and planning (and probably consulting Mr Cicero at an earlier stage) for the applicant to arrange things in such a way, and do things in such an order, so as to avoid or reduce the impact of the contribution that he must now pay. He may have been able to obtain the exemption, or possibly to have arranged things so that the assessment pursuant to the schedule produced a percentage of less than 4.25% of the site value of the land.

39 If there are anomalies, or even injustices, in the application of the law as it stands, I think this rather indicates the difficulty of devising a legislative scheme that is sufficiently clear and simple as to be workable whilst achieving a higher or ultimate degree of mathematical equity. A legislative scheme, to be of any use, must be intelligible and workable, and cannot be so complex as to lose those qualities by being too complex or unintelligible.

40 Ultimately, I note that the policy behind all such public open space contributions is that the party who increases the need or demands on and for public open space by subdividing land should make a contribution to meeting the need and demand thereby created. If the provisions mean that a retention of the original building without additions would have resulted in the exemption applying, that would have been fortunate for the applicant. In fact, the original building has been in place for several decades without making a contribution. If the subdivision has now gone forward in a form and in circumstances where an exemption may possibly have been avoided, but was not, so that the applicant ultimately must pay in relation to the increased demand and requirement, that does not seem to me to be so outrageously unjust. Be that as it may, I find that the exemption does not apply and the contribution requirement does.

41 Mr Cicero's fall back proposition contradicts the basis of his main case. On the fall back argument he adopts the idea of there being two buildings, the original one and the 2005 one, whether or not they are joined, and whether or not one might be regarded as an extension of the other in ordinary English. He notes the statutory definitions of "building" in the Subdivision Act and the PEA Act_._ He then admits, on this argument, a need to make a contribution in relation to the new 2005 building whilst retaining the exemption as a Class 1 subdivision insofar as the subdivision relates to the original pre 1989 building.

42 I consider that this argument falls down on several points. Firstly, this subdivision is one subdivision, not two. It is either a Class 1 subdivision and exempt, or it is not. It cannot be divided or severed as suggested by Mr Cicero.

43 Furthermore, there is no rational, sensible or intelligible way of devising or ascertaining the "site" of the new building, as distinct from the "site" of the original one for the purpose of ascertaining the site value in relation to which the percentage determined in accordance with the schedule is to be applied. The reality is, not only is it one subdivision, but it is only one site. The site is the whole of the land in the subdivision whether built on or not. It includes the whole parcel of land fronting the two streets and amounting to 2446m2. Even if one regards the 2005 structure with its eight dwellings and eight lots as a building, apart from the original building, the site for that new building is still the entire site which it shares with the original building. It includes all the common property in relation to which all lots and their owners have an interest. It appears that there is a communal recreation facility in a building in the courtyard. It is on the common property. It is part of the site. It is every bit an amenity applicable to the eight lots as to the 48. Thus, the site of the 2005 building in relation to which the site value is to be worked out is the whole of the parcel of land, just as much as if the original building did not exist and never had existed.

44 Thus, I am afraid, that the fall back position of making a contribution, but only in respect of eight lots, must fail.

45 For these reasons the application for review fails and I direct that the permit must contain condition 4 as it appears in the permit when originally issued on 21 October 2005.