Rose Consulting Group v Baulkam Hills Shire Council

Land and Environment Court (NSW)|2002-06-25|Before: Talbot J, Mr AM

Reported Decision : 121 LGERA 367 APPEAL ALLOWED

CITATION : Rose Consulting Group v Baulkam Hills Shire Council [2002] NSWLEC 101 PARTIES : Rose Consulting Group v Baulkham Hills Shire Council FILE NUMBER(S) : 10001, 10003, 10004, 10005; 10071 of 2001 CORAM: Talbot J KEY ISSUES: Development Consent :- Test for determination on appeal whether s 94 contribution unreasonable. Land and Environment Court Act 1979 - s 56 A LEGISLATION CITED: Environmental Planning and Assessment Act 1979 - s 94, s 94 A s 94 B, s 97, s 80 A Environmental Planning and Assessment Regulation 2000 - s 27 (1) Associated Picture Houses v Wednesbury Corporation [1948] 1 KB 223; Frevcourt Pty Ltd v Wingecarribee Shire Council (1993) 80 LGERA 75; Newbury District Council v Secretary of State for the Environment [1981] AC 578; Parramatta City Council v Peterson (1987) 61 LGERA 286 ; CASES CITED: Pioneer Homes Pty Limited v Liverpool City Council (1992) 77 LGRA 237; Stockland (Constructors) Pty Limited v Baulkham Hills Shire Council [1996] NSWLEC 185 ; Somerville v Dalby and others (1990) 69 LGRA 422; Toadolla Co Pty Limited v Dumaresq Shire Council (1992) 78 LGERA 261; Trehy & Ingold v Gosford City Council (1995) 87 LGERA 262 DATES OF HEARING: 11/06/01, 12/06/02 DATE OF JUDGMENT: 06/25/2002

Mr N Hemmings QC SOLICITORS Marsdens Law Group LEGAL REPRESENTATIVES: Mr BJ Preston SC with Mr AM Pickles (barrister) SOLICITORS Coleman & Greig Solicitors

IN THE LAND AND Matter No. 10001; 3 -5 of 2001 and 10071 of 2001 ENVIRONMENT COURT Coram: Talbot J OF NEW SOUTH WALES Decision Date: 25 June 2002

Rose Consulting Group Applicant v Baulkham Hills Shire Council Respondent

Following a five day hearing, that required the consideration of at least 40 exhibits, Commissioner A J Nott reserved his decision for a period of five months. He published his reasons for judgment on 17 December 2001, after which final orders were made on 21 December 2001.

The issues in dispute before Commissioner Nott concerned the reasonableness of monetary contributions imposed by way of conditions pursuant to s 94 of the Environmental Planning and Assessment Act 1979 ('the EP&A Act") in five development consents granted by Baulkham Hills Shire Council ("the council") to the applicant in respect of subdivisions of land at Kellyville.

By notice of motion dated 16 January 2002, the council has lodged an appeal against the decision of Commissioner Nott pursuant to s 56A of the Land and Environment Court Act 1979 ("the Court Act").

The council asserts that the Commissioner determined for himself the amounts of monetary contributions that would be reasonable and in so doing fundamentally misconceived his statutory functions under an appeal pursuant to s 97 of the EP&A Act and in relation to s 94 of the EP&A Act.

Given that the Commissioner ordered the grant of development consent for each development application, subject to a condition requiring the payment of monetary contributions in a reduced amount and in one case, at least, deletion of a condition, it is no surprise that the applicant in the proceedings, the respondent to the notice of motion, seeks to support the findings of the Commissioner.

Before the Court can address the 13 individual grounds for appeal, it is first of all necessary to examine and make findings about the effect of the statutory scheme concerning the imposition of conditions pursuant to s 94 of the EP&A Act. This involves a comparison of the role of a council imposing such conditions at first instance and the function of the Court on an appeal under s 97 of the EP&A Act, where the appeal relates to a condition imposed by a consent authority under s 94.

The principal argument relates to whether the Commissioner erred in law by misdirecting himself, asking the wrong questions and considering irrelevant matters by determining for himself what he considered to be reasonable contributions instead of determining whether the conditions imposed (being of the kind allowed by and in accordance with a contributions plan) were unreasonable.

The Commissioner identifies the contention of the applicant that the Court should determine amended contributions under s 94 of the EP&A Act because the contributions determined by the council were unreasonable. The council nevertheless claims that the issues raised by the applicant, and dealt with by the Commissioner, went to the fundamental reasonableness of the provisions of the respective contributions plans. It is contended that an investigation of the latter kind is not contemplated by s 94(12).

Pursuant to s 80A(1)(h) of the EP&A Act a condition of development consent may be imposed if it is authorised to be imposed, inter alia, under s 94.

The relevant parts of s 94 are set out as follows as a helpful reference:- 94 Payment towards provision or improvement of amenities or services (1) Subject to subsection (2), if a consent authority is satisfied that a development, the subject of a development application or of an application for a complying development certificate, 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 consent to that application subject to a condition requiring:

(b) the payment of a monetary contribution, or both. (2) A condition referred to in subsection (1) is to be imposed only to require a reasonable dedication or contribution for the provision, extension or augmentation of the public amenities and public services mentioned in that subsection.

(3) Subject to subsection (4), 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, the subject of a development application or of an application for a complying development certificate, will, if carried out, benefit from the provision of those public amenities or public services,

the consent authority may grant consent to the application subject to a condition requiring the payment of a monetary contribution towards recoupment of the cost of providing the public amenities or public services. (4) A condition referred to in subsection (3) is, subject to any direction of the Minister under section 94E (1), to be imposed only to require a reasonable contribution towards recoupment of the cost referred to in subsection (3).

(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) . . . (7) The consent authority is to apply any monetary contribution paid in accordance with a condition referred to in subsection (3), if the whole or any part of the cost incurred in providing the public amenities or public services with respect to which the contribution is paid remains unpaid, towards repayment of that cost.

(8) . . . (9) 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 or other sum of money that the applicant has elsewhere dedicated free of cost within the area or previously paid to the consent authority other than as a condition of the grant of consent under this Act.

(10) . . . (11) A council may impose a condition referred to in this section only if it is of a kind allowed by, and is determined in accordance with, a contributions plan approved under section 94B.

(12) A condition of a kind allowed by a contributions plan may be disallowed or amended by the Court on appeal because it is unreasonable, even if it was determined in accordance with the plan.

(13) . . . 11. Beyond the statutory controls imposed by the EP&A Act, it is well-established that for a condition of development consent to be valid, it must:- (1) have a planning purpose; (2) fairly and reasonably relate to the development the subject of the development consent; and (3) must not be so unreasonable that no reasonable planning authority could have imposed it.

(see Newbury District Council v Secretary of State for the Environment [1981] AC 578; Parramatta City Council v Peterson (1987) 61 LGERA 286 and Trehy & Ingold v Gosford City Council (1995) 87 LGERA 262) 12. Section 94(1) of the EP&A Act encapsulates the second Newbury test that the condition must fairly and reasonably relate to the subject development provided nevertheless that it is a condition of a kind allowed by, and is determined in accordance with, a contributions plan approved under s 94B as provided in s 94(11).

It is not necessary for the benefit of the public amenities and public services to be direct, provided that the amenities and services are established in an area where there can be a benefit to the development ( Peterson, Frevcourt Pty Ltd v Wingecarribee Shire Council (1993) 80 LGERA 75 and Toadolla Co Pty Limited v Dumaresq Shire Council (1992) 78 LGERA 261). It is sufficient for the purposes of s 94(1) that the development will, or is likely, to require any provision of or any increase in demand for public amenities and public services.

Clause 27(1) of the Environmental Planning and Assessment Regulation 2000 provides that a contribution plan must include the following:- (a) the purpose of the plan,

(c) the relationship between the expected types of development in the area 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 contribution rates for different types of development, as specified in a schedule to the plan,

(f) the council's policy concerning the timing of the payment of monetary section 94 contributions and the section 94 conditions that allow deferred or periodic payment,

(g) a works schedule of the specific public amenities and services proposed to be provided by the council, together with an estimate of their cost and staging.

Before a contributions plan is made the council is required, by public exhibition, to afford an opportunity for submissions to be made and to consider those submissions.

Pursuant to s 94C of the EP&A Act, judicial notice is to be taken of a contributions plan and the validity of any procedure required to be followed in making the plan is not to be questioned in any legal proceedings unless commenced within three months of the date of which the plan comes into effect.

The council draws attention to the distinction between the constraint imposed upon a council pursuant to s 94(11) and the provisions of s 94A(4) and (5). The latter allows the Minister or the Director-General, when acting as the consent authority to impose a condition even though it is not of a kind allowed by, or is not in accordance with, a contributions plan, provided regard is first had to any approved contributions plan. Conversely, when a council is the consent authority it is not permitted to use a formula or rate to determine a contribution otherwise than in accordance with a contributions plan.

The requirement of reasonableness in s 94(2) controls the extent to which a condition authorised by s 94(1) may be imposed notwithstanding that it satisfies s 94(11) and is determined in accordance with a contributions plan approved under s 94B.

The argument by Mr Preston SC, who appears for the council, reflects a stepped approach to the consideration and imposition of a condition requiring a monetary contribution or dedication of land by a council acting as the consent authority, as follows:- (a) Section 80(1)(h) of the EP&A Act contains express power to impose a condition authorised by s 94;

(b) Section 94(1) provides for the application of a nexus test between the proposed development and the provision of, or an increase in, demand for public amenities and public services. This is a broad test;

(c) The kind of condition and the extent of dedication or contribution is to be determined only in accordance with a contributions plan pursuant to s 94(11). This is a narrow test;

(d) Notwithstanding satisfaction of the limitations imposed by s 94(1) and s 94(11), the power to impose a condition authorised by s 94(1) and s 94(11) is further circumscribed by s 94(2) which operates to ensure that the contribution or dedication is reasonable; and

(e) Finally, the implied parameters imposed by application of the Newbury tests must apply. Arguably, only the third test remains extant if the statutory tests are satisfied. 20. Mr Preston then makes a number of distinctions between the functions of a council at first instance and the functions of the Court in hearing and disposing of an appeal made pursuant to s 97 of the EP&A Act.

If the determination of the consent authority, being the council, is to grant consent, the effect of the appeal, pursuant to s 83(2)(a), is that the consent ceases to be or does not become effective. It only becomes effective and operates from the date of the determination of the appeal, except when the decision is to refuse development consent. Mr Preston relies on the decisions of the Court in Somerville v Dalby and others (1990) 69 LGRA 422 and Pioneer Homes Pty Limited v Liverpool City Council (1992) 77 LGRA 237 to support that proposition. Accordingly, he says, this means that in relation to a grant of consent subject to conditions, including a condition under s 94, those conditions still exist pending the outcome of an appeal although they are not yet effective. Hence the Court, strictly speaking, does not determine the development application itself because:- (1) only a consent authority may determine a development application;

(2) the subject matter of the appeal is expressly stated to be the determination of the consent authority with respect to the applicant's development application, not the development application itself; and (3) the development application merges with the determination of the consent authority and no longer enlivens the power under s 80(1) of the EP&A Act, which provides that a consent authority is to determine a development application by either granting consent to the application or refusing consent.

According to the above reasoning, it follows that the Court, when it determines an appeal under s 97 does not actually make a determination under s 80(1). Mr Preston says that it is implicit that the consent that becomes effective and operates is the consent granted by the council, which is the consent authority, although that consent is deemed to be amended by the terms, if any, of the Court's determination of the appeal. Accordingly, the consent that would become effective and operate from the date of the determination by the Court would be the council's consent without any disallowed condition or including any amended condition.

The deeming provisions of s 83(4) of the EP&A Act have effect to take account of circumstances where the consent authority originally refused development consent or there is a deemed refusal in accordance with s 82. In that case, s 83(4) provides that the decision by the Court "is taken to be a consent granted" by the consent authority and is effective and operates from the date of that decision.

Furthermore, s 39(5) of the Court Act provides the decision of the Court upon an appeal shall be deemed to be the final decision of the person or body whose decision is the subject of the appeal and should be given effect to accordingly.

The decision of the Court determining an appeal under s 97 of the EP&A Act is not itself the determination of the consent authority determining a development application but nevertheless it is deemed to be a determination of the consent authority whose decision is the subject of the appeal. The Court does not become the consent authority. Mr Preston says that this circumstance has consequences for the functions of the Court in relation to the imposition of conditions pursuant to s 94 of the EP&A Act. One of the powers deemed to be vested in the Court pursuant to s 39(2) of the Court Act is the power to impose a condition pursuant to s 80A(1)(h) and s 94 of the EP&A Act. However, according to Mr Preston, this means that the power to impose a condition pursuant to s 94 is subject to the limitations stated in sub-sections (1), (2) and (11). Accordingly, the Court only has the power to make a decision upholding an appeal against the determination of the council on the basis that consent ought to have been granted subject to a condition under s 94, if the condition satisfies the requirements of s 94(1), (2) and (11). He further says this means the condition must be of a kind allowed by, and be determined in accordance with, a contributions plan made pursuant to s 94B subject to the final check required by s 94(2), which operates to ensure that the contribution or dedication required by the condition is in itself reasonable.

It is pertinent to note that s 94(12) has application only when a condition is imposed by the council in its determination of the development application to grant a consent. If the development application is refused by the council at first instance then there is no consent and hence there is no condition imposed under s 94 which can be disallowed or amended by the Court on appeal.

27.. In order to follow Mr Preston's line of reasoning, it is important to again note that the Minister or the Director-General acting as consent authority is entitled, under s 94A(5), to impose a condition under s 94(1) "even though it is not of a kind allowed by, or is not in accordance with, a contributions plan" . No such power or provision appears in either the EP&A Act or the Court Act in relation to the function of the Court hearing an appeal from the decision of the council. Thus, according to Mr Preston, it must follow that the Court does not have the power to impose a condition under s 94(1) if it is not of a kind allowed by, or in not in accordance with, a contributions plan.

Moreover, Mr Preston contends, the functions and discretions of the council vested in the Court under s 39(2) of the Court Act are subject to the limitations applicable to the council, including those imposed by ss 94(1), (2) and (11). The authority for the Court to disallow or amend a condition of a kind allowed by a contributions plan, pursuant to s 94(12), is a distinct power which applies only where the determination of the council is to grant consent. The wording of s 94(12) assumes that there is already a condition. This is apparent from the use of the words "disallowed" and "amended" and the expression "even if it was determined in accordance with the plan". In the absence of an existing condition these words would have no meaning that could enable them to be applied in context. They would have no work to do. Accordingly, Mr Preston says the review permitted by the Court is limited to a review of an existing condition to determine whether it should be disallowed or amended. It does not extend to a full-scale review unconstrained by the provisions of s 94 and, in particular, s 94(11).

Mr Preston's argument is that s 94(12) only permits the Court to review a condition that is imposed by the council in accordance with s 94(11) on one ground, namely that the condition is unreasonable. The unreasonableness of the condition must flow from something other than the fact that the condition is of the kind allowed by, or determined in accordance with, an approved contributions plan.

The consequence of the council's argument is that the Court does not have power under s 94(12) to review a condition imposed by the council under s 94 on grounds relating to the kind of condition or the manner in which the condition was determined such as the elements of a contribution or dedication calculated in accordance with the contributions plan including any formula, input variables in the formula or contribution rate used in determining the contribution or dedication required. It would also follow that s 94(12) does not permit the Court to impose a condition which is not authorised by the approved contributions plan. Support for this proposition is said to come from comments made by Pearlman J in Stockland (Constructors) Pty Limited v Baulkham Hills Shire Council [1996] NSWLEC 185 as follows:- The qualification in s 94(8) (now s 94 (12) of the EP&A Act ) operates to permit this Court to disallow or amend a condition which is otherwise authorised by a contributions plan. However, s 94(8) cannot apply to permit the imposition of a condition which is not so authorised. A council has no discretion under s 94(7) - if a condition is not authorised by a contributions plan, the council may not impose that condition (see Trehy & Ingold v Gosford City Council (1995) 87 LGERA 262 at 272).

By applying what Stein J said in Peterson at p 297, Mr Preston claims that the proper test under s 94(12) for disallowance or amendment of the condition of consent as being unreasonable, is whether the condition is so clearly unreasonable that no reasonable planning authority, acting within its reasonable authority, could have decided to impose it. Nevertheless, the Court cannot, while purporting to review a condition on the ground of unreasonableness, review the contributions plan itself. The review should only be of any unreasonableness of the condition not any unreasonableness of the contributions plan in accordance with which the condition was imposed. Thus, according to Mr Preston, if, and only if, Wednesbury unreasonableness is found by the Court, does the Court have power to disallow or amend a condition so as to remedy the unreasonableness. He claims this could be achieved by reducing the dedication or payment required to a level which the Court determines that a reasonable council acting within its reasonable authority could have imposed. However, this assessment cannot be made until the Court first determines that the condition imposed by the council, was manifestly unreasonable according to the third Newbury test (Wednesbury). It is submitted that if the Court adopts this approach, it will be consistent irrespective of whether the determination of the council as consent authority under s 80(1) is to refuse consent or grant consent, subject to conditions. In either case, the limitations imposed by ss 94(1), (2) and (11) will be maintained.

Hence, according to the council, the question to be asked by the Court, where the determination of the consent authority has been to refuse consent, is whether a proposed condition is of a kind allowed by and is determined in accordance with a contributions plan and the dedication or contribution is reasonable having regard to s 94(2). On the other hand, where the consent authority has made a determination to grant consent, subject to a condition under s 94(1) in accordance with a contributions plan, the question would become whether the condition can be challenged on the ground of Wednesbury unreasonableness.

In answer to the council's case, Mr Hemmings QC, on behalf of the respondent to the appeal who is the applicant for development consent, submits that the council's argument is erroneous on the basis that the jurisdiction of the Court on an appeal is not limited in the way the council contends. In particular, it is not limited to a review of disputed conditions. Rather, the Court is exercising the council's functions and its own additional functions and may not only vary or amend a condition but may refuse consent altogether. Mr Hemmings sees the submissions by Mr Preston as seeking to construe s 94(12) as imposing a limitation on the power vested in the Court whereas it should be regarded as an expansion of power.

Citing what the Court had to say in Trehy and Ingold at p 272, Mr Hemmings notes that although the Court on appeal has the same function as the council the relevant provision now contained in s 94(12) allows the Court a wider discretion. In Trehy and Ingold the Court determined the amount of s 94 contributions using the criteria in the respective contributions plans according to what was reasonable.

Mr Hemmings challenges the legitimacy of invoking the special sense of unreasonableness expressed by Lord Green MR in Associated Picture Houses v Wednesbury Corporation [1948] 1 KB 223. This, he says, denies any purpose for the words "even if it was determined in accordance with the plan" in s 94(12).

The Court agrees that an appropriate test arising from s 94(12) is whether the contribution is unreasonable in the circumstances. There is no warrant to derive the special sense of Wednesbury unreasonableness into the language of s 94(12).

The wording of the relevant provisions of the EP&A Act and the Court Act identified by Mr Preston can lead to a conclusion that the Court, does not, strictly speaking, make a decision or determination within the meaning of s 80(1), when making a determination following an appeal under s 97 of the EP&A Act. This nevertheless does not lead to the conclusion that the Court does not determine the development application when deciding whether to grant consent. For example, the practical effect of the deeming provisions in s 83(4) of the EP&A Act and s 39(5) of the Court Act is recognised in s 96(7) and s 83(5)(a) and (b) by the use of the descriptive phrases "a development consent granted by the Court" , "results in the granting of the consent" and "consent granted by (the Land and Environment) Court" . Section 96(7) also refers to "a development consent granted by the Court" .

The Court is exercising original jurisdiction in order to determine whether development consent should be refused or granted. If the latter, either conditionally or unconditionally. Nothing that occurs before the council is binding on the Court. The Court is acting in the role of the decision-maker. In addition to the functions and discretions which the council had in respect of the development application by dint of s 39(2) of the Court Act, the Court also has any other functions and discretions given to it.

Without an express statutory provision, to the contrary, therefore s 94 (11) applies to the Court exercising original jurisdiction as if it was the council.

The relevant question is whether the Court, standing in the shoes of the council, will arrive at the same or another answer having regard to the scope of the council's power to impose a condition including s 94(11) extended if necessary by s 94(12). The test of unreasonableness in s 94(12) is distinct to the test of reasonableness in s 94(2).

Although Stein J in Peterson makes reference to the applicability of the Wednesbury test, that was in a situation where the issue in the proceedings was whether an assessor of the Court had correctly applied that test to the determination of validity of a condition imposing s 94 contributions in accordance with the section as it stood in 1987.

Section 94(12) does not disturb the constraint applicable at the time the council makes its own decision, namely that a condition must be reasonable according to the criteria in s 94(1) and s 94(2). Furthermore, it does not detract from the requirement that a condition may be imposed "only if it is a kind allowed by, and is determined in accordance with a contributions plan approved under section 94B" . It merely removes any possible cloak of inviolate legitimacy that may be otherwise inferred from strict compliance with s 94(11).

In Trehy and Ingold the Court only considered whether a condition was unreasonable. Subsequent to Peterson , Stein J, when dealing with a challenge to s 94 conditions on appeal, asked the question whether the conditions were reasonable ( Frevcourt at p 79). Pearlman J did the same thing in Security Storage v Leichhardt Municipal Council (1996) 93 LGERA 176 when considering a s 102 application, whereas McEwen AJ, in GHD Pty Limited v Pristine Waters Council [2001] NSWLEC 186, unreported, referred to the essential question arising under the earlier s 94(8) as being "whether or not the impost, individually or collectively, was unreasonable" .

The Court is not prepared to invoke the Wednesbury test in its application of s 94(12). The question, therefore, is whether a condition imposed by the council in accordance with the contributions plans is unreasonable. It is an objective test to be applied according to the idiosyncratic circumstances of each case judged on the merits. The Court is not driven to decide whether the decision of the council was so unreasonable that no reasonable council could have come to it. It merely must decide whether the subject conditions were "unreasonable" in the ordinary context of the word.

Accordingly, the Court is to decide for itself whether the condition should be disallowed or amended. It is a decision de novo. The Court does not conduct its review on the basis of a judicial review by asking whether the decision of the council was open to it. The Court is required to make its own decision on the merits.

The express words of s 94(12) limit the Court's consideration to whether the condition is unreasonable. That may involve a consideration of the provisions of the contributions plan but not as to whether the provisions of the plan itself are unreasonable. The relevant consideration is whether the application of the provisions of the contributions plan, through the condition, is unreasonable. The condition in any amended form must, remain of a kind allowed by and determined in accordance with an approved contributions plan. It is conceivable that a s 94 contribution determined as a lump sum in accordance with a contributions plan could comprise a number of items, one or more of which may be unreasonable in the circumstances. Even if the items are specified separately, one or more of them may be unreasonable. In either case deletion of the unreasonable items would constitute an amendment. If that is not practicable then the Court has to decide whether to disallow the condition altogether or to maintain it in the context of preventing an unreasonable result.

The issue whether s 94 (11) (then s 94(7)) applies in the circumstances of an appeal where s 94 (12), (then s 94 (8)) has effect was not debated in Trehy v Ingold. Nevertheless, the underlying costs and rates provided in the contributions plans were left intact although calculations were amended to take account of the test of a reasonable dedication or contribution pursuant to s 94(2)(b). Nevertheless, the Court determined the amount of s 94 contributions using the criteria in the respective plans according to what was reasonable.

The Court agrees with the council's submission that s 94 (12) only applies if a condition has been imposed by the council when making a determination to grant consent. The wording of the subsection assumes the pre-existence of a condition and its prior determination by the council in accordance with a contributions plan. The Court also agrees with Mr Preston that, notwithstanding an appeal the condition still exists. The subsection can have no application where the council has refused consent, or it is deemed to have refused consent because in that instance there would be no conditions in existence.

It would be a curious and inconsistent result if the Court is constrained by the provisions of a contributions plan on an appeal from a determination where consent is refused and yet be free to disallow or amend a condition otherwise than in accordance with a contributions plan where the council has determined to grant a consent. The power to disallow or amend a condition is to be construed in the context of maintaining consistency with the provisions of the contributions plan. This does not allow the Court to re-determine the scheme created by the contributions plan but rather whether, having regard to aspects of the development and the condition and provisions of the plan, it is unreasonable for the condition to be imposed.

Moreover, if Parliament had meant that the Court be released from the constraints of a contributions plan by s 94(12), it could have done so in terms akin to s 94A(4) and (5). It did not.

Furthermore, the present scheme for the making of a contributions plan incorporates a public consultation process and the prospect of intervention by the Minister pursuant to s 94E. It is therefore highly unlikely, indeed in my view untenable, that the legislature would have intended the Court to disregard or discount the provisions of a contributions plan without making a clear statement to that effect.

Having established the true position under the statutory scheme, it remains for the Court to determine whether Commissioner Nott misconceived the Court's statutory function and thereby misdirected himself, asked the wrong questions and took into account irrelevant matters.

The Commissioner delivered an 81 page judgment containing detailed reasoning and conclusions. The council has analysed significant parts of the Commissioner's reasons in a 50 page submission in support of a 42 page primary submission. It is not necessary to regurgitate all of this material in order to explain the basis for the Court's decision.

The Commissioner found it was relevant to have regard to the predecessor of the contributions plans applicable and in force at the date of the hearing. He then clarified his approach as follows:- I wish to make it clear that in considering by way of rehearing whether the contributions imposed by the Council were unreasonable, I am not determining any of the appeals in accordance with CP93. The Council is obviously, as a matter of law, entitled to change and update its contributions plans at any time in accordance with the Act and regulations. If there is a significant substantial increase in contributions levied for development in a particular locality under a new contributions plan compared with the plan that it repeals, there could well be a rational and reasonable explanation for the increase in contributions. And, depending on the particular facts of the case, the court might hold that the increased contributions are reasonable. Nevertheless, an examination, of the repealed contributions plan and of the planning studies upon which it was based may highlight parts of the new contributions plan that appear to be unreasonable or at least might highlight the unreasonableness of certain contributions levied in accordance with the new plan. 55. He described "reasonableness" to include concepts of fairness, equity, sound judgment, moderation and proportionality.

At par 44, the Commissioner explained that when determining reasonable contributions for the purposes of s 94(12) he considered it appropriate to use a contributions plan, upon which the council levied contributions (although the contributions plan in question was not current at the date of the hearing) making necessary adjustments in the light of his findings. He further says that for the purposes of determining reasonable contributions the applicant was content to use a recent contributions plan as the starting point from which adjustments were to be made, even though four of the appeals contained contributions calculated having regard to another contributions plan, which appears to have been operative from 21 December 1999 and continued in force only until 17 July 2000.

It is obvious from the Commissioner's observations, that he embarked upon a task of determining reasonable contributions having regard to his own judgment, guided by the provisions of previous and current contributions plans. This approach is inconsistent with the constraint imposed by s 94(11) and (12). It could only be coincidental that any result would be the imposition of a condition determined in accordance with a contributions plan approved under s 94B. Rather than testing the condition imposed by the council as being unreasonable, the Commissioner decided for himself what he considered to be reasonable, using his own criteria developed out of the evidence.

The Court agrees with Mr Preston, that a condition imposed by a council of the kind allowed by and determined in accordance with a contributions plan approved under s 94B cannot be unreasonable and hence disallowed or amended by the Court, merely because it is not a condition which the Court would have itself decided to impose if it had a free discretion and was unfettered by the contributions plan.

The Commissioner went to some trouble to adjust the formula used to determine contributions rates per lot for particular public amenities or services and apparently adjusted the formula to reach what he considered to be a reasonable result. He even reviewed population estimates and projected density based upon the evidence before him, rather than the rates developed from a relevant contribution plan. The argument that the council used unreasonable and inappropriate population density assumptions was a challenge to the approved contributions plan itself and not to the condition imposed by the council pursuant to s 94(1) in its determination of the individual development applications. The Commissioner even inquired as to whether a repealed contributions plan underestimated future populations and concluded that the figures were understated.

This indicates an approach whereby the Commissioner embarked on a fact finding mission to verify the material in the contributions plans, whereas his power is limited to inquire and determine whether the condition is unreasonable. The level of monetary contributions were recalculated by the Commissioner using alternative data and projections to take account of revised population projections.

A similar approach was taken in respect of contributions for open space and recreational facilities following his conclusion that the approach taken by the council in the relevant contributions plan gives rise to a substantial inequity because of the differing values of open space land.

By devising input variables and other criteria to determine contributions for himself, the Commissioner has circumvented the public participation process underlying and inherent in the contributions plan making process. Arguably his method of approach transgresses at least the intention of a policy that apparently lies behind the provisions of s 94C. The section requires judicial notice to be taken of a contributions plan and further that the validity of any procedure required to be followed in making or approving a contributions plan is not to be questioned in any legal proceedings.

Although the wording used suggests an approach to re-writing of the contributions plan, the Commissioner prima facie makes a decision open to him in par 103 as follows:- In determining reasonable contributions for open space and recreation to be paid for by the applicant, I am of the opinion that the costs of the Norwest open space (excluding the Greenway) of $14,194,246 in CP7:00 should be notionally borne in full by the incoming population of the Norwest release area. That is, those costs should notionally be treated as being paid in full by the Norwest developers; and the applicant need not pay any of those costs.

If the above finding in par 103 can be translated into a permissible response to s 94(12) it may prove practicable to either disallow or amend the existing condition. That question remains to be finally determined by the Commissioner in due course after the reasons in this judgment have been considered.

The Court does not agree with the council's argument that the Commissioner was not entitled to determine whether a condition was unreasonable. It is not a correct approach under s 94 (12) that a condition will only be unreasonable upon the Commissioner being satisfied that not merely him, but no person acting reasonably could arrive at the Council's decision as Mr Preston submits. The claims that the Commissioner erred on the ground of unreasonableness, as alleged by the council, are dismissed. No error of law is disclosed in this respect.

Wherever the Commissioner has upheld a challenge to the application of the provisions of a contributions plan by applying a test of whether the provisions of the plan itself were reasonable and then proceeded to re-working the calculations in order to reach a different result, he erred on two counts:- (1) The test of reasonableness is not the test to be applied pursuant to s 94 (12). The test is whether it is unreasonable to allow the condition to remain in its present form or at all; and

(2) The test is to be applied to the terms of the condition and not the provisions in the plan for the purposes of re-writing the plan.

In determining that the applicant was not required to contribute to the Bella Vista Farm community facility, the Commissioner inter alia gave the following reasons:- (a) It is questionable whether such a large sum should be borne by contributions; (b) A grant from the Department of Urban Affairs and Planning should have been taken into account; and (c) A substantial part of the restoration should be borne by a wider Community. 68. Reasons (a) and (c) were reasonably open to the Commissioner as justification for disallowing so much of any relevant condition that reflected a contribution to the community facility. Although not apparently used in this way reason (b) could depend upon an adjustment to the rate of contribution determined in making the contributions plan and hence if that were the case, it would be an amendment to the provisions of the contributions plan itself. The latter course would not be open to the Commissioner pursuant to s 94(12) and s 94(11).

The council claims that in respect of some items, the Commissioner failed to give reasons for his determination. Given that it will be necessary for the whole process to recommence in accordance with the Court's findings, the failure to give reasons, although critical to fulfilment of the Commissioner's obligations adds nothing to the grounds for upholding the appeal pursuant to s 56A of the Court Act.

Other issues raised by the council, such as whether contributions levied in accordance with a contributions plan will provide a surplus or that a credit be given for interest earned on contributions, fall to be resolved once again on the basis that the Commissioner determined contributions otherwise than in accordance with contributions plan.

It is not appropriate and indeed feasible within practical limits, to make a finding in respect of each individual determination made by the Commissioner. The sum of the individual mistakes is of such magnitude that the whole consideration has miscarried. This is not intended to be a comment about the degree of error by the Commissioner, but instead is a recognition of the nature of the task involved.

The results achieved by the Commissioner may be eminently reasonable. Having regard to the detailed analysis undertaken by him, they could well be reasonable. However, that is not the overall test. Some conditions have not been determined in accordance with a contributions plan approved under s 94B. The conditions arguably are of a kind allowed by a plan but the determination was not in conformity with a relevant plan so as to be in accordance with a plan as required by s 94(11). The conditions must be redetermined taking account of the constraints imposed by s 94(11).

It is appropriate, therefore, that the matter be referred back to the Commissioner for re-determination in accordance with the requirements of s 94, more particularly pursuant to s 94(11) and s 9 (12), construed in the manner outlined above.

The formal orders of the Court are: (1) Appeal upheld.

(2) Proceedings referred back to Commissioner Nott for a re-hearing. (3) Matter listed for call over before the Registrar at 9am 3 July 2002.

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.

At a glance

Court

Decision date

Before

Source

Judgment (97 paragraphs)

Parties

Cases Cited (7)