1. On 5 October 2010, Council resolved:
   • (a) to defer the question to a meeting on 19 October 2010, to provide an opportunity for further discussion with the developer about the scale and character of the development; and
   • (b) that a representative of the Residents, Ratepayers and Friends of Berwick Village Inc, Councillors and Council officers be invited to participate in the discussion.
2. In his report to Council for the 19 October 2010 meeting, the planning officer repeated the recommendation made in his previous report that Council support the ending of the section 173 agreement, subject to Sheradar entering a new agreement in relation to car parking.
3. On 19 October 2010, Council unanimously resolved:
   1. That Council retains the current section 173 agreement No R177840E, dated 17 January 1991, relating to 1-9 Lyall Road, Berwick.
   2. That Council continue negotiations with the developer to seek further reduction in the scale of the development.
   3. That the applicant/owner and all submitters be notified of Council's decision.

SECTION 184 APPLICATION TO REMOVE LAND FROM AGREEMENT

1. Division 2 of Part 9 of the Planning and Environment Act 1987 deals with agreements, commonly referred to as section 173 agreements. Section 177 deals with when an agreement ends. An agreement may provide for the agreement to end or an agreement may be ended by agreement. Neither circumstance applies in the present case. There is nothing in the agreement to provide for the ending of the agreement and there is no agreement between the Council and the applicant to end it.
2. Section 184 deals with applications to the Tribunal. It provides as follows:

(1) An owner of land may apply to the Tribunal for an amendment to a proposed agreement if -

(a) under a planning scheme or a permit the use or development of land for specified purposes is conditional upon an agreement being entered into under this Division; and

(b) the owner objects to any provision of the agreement.

(2) The Tribunal may approve the proposed agreement with or without amendments.

(3) A purchaser of land who is a party to an agreement, or an owner of land, may apply to the Tribunal for an amendment to the agreement to remove the land from the application of the agreement, if the parties to the agreement cannot agree that the agreement should be amended.

(a) it considers that the land owner is not subject to any further liability under the agreement; or

(b) having regard to any relevant permit, or requirements under the Subdivision Act 1988, it considers it inappropriate that the agreement should continue to apply to the land and the owner.

1. Sub-sections (1) and (2) are not relevant because they relate to a proposed agreement not yet entered between the parties. It is sub-sections (3) and (4) that are relevant to this proceeding.

1. In considering this application, there are four key issues that arise:
   • Under section 184(3), can land be removed from the application of the agreement when it is the only land to which the agreement applies?
   • Can it be said that the parties to the section 173 agreement have been unable to agree to amend the agreement?
   • Is the permit granted by the Tribunal a relevant permit for the purposes of section 184(4)(b)?
   • Is it inappropriate that the agreement should continue to apply to the land and the owner?

1. Section 184(3) relevantly provides that an owner of land may apply to the Tribunal for an amendment to the agreement to remove the land from the application of the agreement if the parties to the agreement cannot agree that the agreement should be amended. In the present case, the application is to remove the whole of the land to which the agreement applies, not just some part of it.
2. The Tribunal's power to amend an agreement under section 184(3) is limited to removing land from the application of the agreement. The Tribunal has no power, for example, to amend the agreement by deleting or modifying conditions in the agreement.[19] The Tribunal is restricted to removing land from the agreement.
3. In Solid Investments Australia Pty Ltd v Greater Geelong CC[20], in commenting on the scope of section 184(3) and (4), Justice Morris observed that:

[57] ... it does not follow that the tribunal cannot amend an agreement to remove land from the application of the agreement if no land will continue to be subject of the agreement. Such a conclusion is not required by logic or by the application of the words used in the section. ...

1. Other divisions of the Tribunal have not taken a different view.
2. I agree with the view expressed by Justice Morris in Solid Investments. The terms of section 184(3) do not constrain the opportunity to amend an agreement to a situation when there will be some land left to which the agreement applies. The Council argued that to remove all land from the application of the agreement would be to effectively end the agreement rather than to amend it. However, I do not necessarily agree that this will always be the outcome when an agreement is amended to remove all the land from the application of the agreement. The shell of the agreement will remain and it is conceivable that there may be some residual contractual obligations that remain under an agreement even though there is no longer any land in the Register that remains subject to the agreement.
3. As noted previously, the Tribunal has no power to end an agreement, only to amend it by removing land from its application. In my view, it is not inconsistent with the Tribunal's limited power to amend an agreement for an application under section 184(3) to relate to the whole or any part of the land to which the agreement applies. Indeed, it would be illogical if this was not the case. For example, under section 184(4)(a), the Tribunal may approve the amendment if it considers that the land owner is not subject to any further liability under the agreement. If the agreement only applies to one parcel of land and the conditions in section 184(4)(a) apply, what purpose would be served if the whole of the land could not be removed from the application of the agreement?
4. In my view, the Council's argument on this point cannot be sustained. I therefore find that there is no reason why an application cannot be made under section 184(3) to remove land from the application of the agreement when it is the only land to which the agreement applies.

Have the parties been unable to agree to amend the agreement?

1. The Council's argument on this point was a technical argument. It claims that Sheradar has only requested that Council agree under section 177(2) to the removal of the section 173 agreement from the subject land, not to amend it.[21] The Council says that Sheradar did not send the Council the requisite notice of the proposed amendment to the agreement required by Regulation 56(2) of the Planning and Environment Regulations 2005.
2. In my view, Sheradar was responding to the invitation by the Council to set in train the processes necessary to remove the agreement.[22] Throughout the negotiations between the Council and Sheradar, including the Council's resolution on 19 October 2010, there is no doubt that both parties were aware that the object of the request and negotiations was to remove the land from the application of the agreement. Indeed, Sheradar had agreed to provide additional car parking to be secured by a new section 173 agreement. It is only after the Council's resolution of 19 October 2010 to retain the current section 173 agreement that the procedural steps open to Sheradar changed. It had been negotiating with the Council to end the agreement under section 177(2) of the Act. With the Council's resolution, the only option available to it to satisfy condition 2 of the permit became an application under section 184(3).[23]
3. Whilst Sheradar made a series of applications to the Tribunal under section 87A and other provisions in November/December 2010, it was not until April 2011 that it lodged the application under section 184 of the Act.[24] In my view, for reasons that I will outline later, I consider this is the most appropriate of the applications before the Tribunal to deal substantively with the key issue in dispute between the parties, namely whether the land should remain subject to the agreement.
4. Section 97 of the Victorian Civil & Administrative Tribunal Act 1998 directs that the Tribunal must act fairly and according to the substantial merits of the case in all proceedings. Section 98(1)(d) enjoins against formality and technicality. As was aptly stated in Comello v Hobsons Bay CC[25]:

[25] Achievement of these objectives would generally require that where there are complex statutory processes are laid down, so long as the substantive objective is ultimately obtained, it would not be in the interests of justice to send the entire proceeding back to "go" because the steps had been taken in the wrong order. It is a well recognised maxim in that "justice delayed is justice denied". This maxim has particular point in a Tribunal which has a specific statutory obligation to dispose of matters speedily.

1. In my view, this is a situation where I consider it is in the interests of justice to exercise my discretion under clause 62 of schedule 1 of the Victorian Civil & Administrative Tribunal Act 1998 to disregard the failure of the applicant to comply with Regulation 56(2) of the Planning and Environment Regulations 2005 to give the Council a copy of the proposed amendment to the agreement. I am satisfied that the Council well knew the effect of the proposed amendment to the agreement to which this application under section 184(3)[26] relates.
2. I am therefore satisfied that the parties to the agreement cannot agree that the agreement should be amended to remove the land from the application of the agreement. I therefore find that the jurisdictional basis for an application under section 184(3) exists.

1. What is a relevant permit for the purposes of section 184(4) depends on the facts and circumstances of each case.
2. I agree with the Council that a permit is not a "relevant permit" simply because it relates to the same land as the section 173 agreement. For example, if an agreement requires that land is not to be used for, say, licensed premises, a permit to remove vegetation on the site is unlikely to be a "relevant permit". However, a permit that affects the subject land, which one party says does not comply with the agreement and that has triggered the application to the Tribunal under section 184(3) to remove the land from the application of the agreement, must be considered a relevant permit to which regard must be had under section 184(4)(b).
3. The permit granted by the Tribunal falls into this category. It is not like the situation in Sixtyfifth Eternity Pty Ltd v Boroondara CC[27] where the applicant attempted to rely upon six recent permits granted by the Tribunal for large scale and intensive retail and commercial developments in the Camberwell Junction Precinct but where the six permit sites were hundreds of metres from the subject site. In this case, Deputy President Macnamara considered what Justice Morris said in Solid Investments on the issue of what was a relevant permit. In Solid Investments, His Honour said:

[58] The effect of section 184(4), however, is that the tribunal may only approve an amendment to an agreement to remove land from the application of the agreement in two types of circumstances. The first circumstances is if the tribunal considers that the owner of the land to be removed from the application of the agreement is not subject to any further liability under the agreement. The second circumstance is if, having regard to any relevant permit, or requirements under the Subdivision Act, the tribunal considers it inappropriate that the agreement should continue to apply to the land and the owner. The first of these circumstances will usually be ascertained by examining the agreement and the events that have subsequently occurred. However it would be open to conclude that a landowner was not subject to any further liability under the agreement if the agreement was void from the outset or had otherwise been discharged. As to the second circumstance, there is no reason why the permit or subdivisional requirement that is "relevant" must be a permit or requirement in respect of the subject land itself. It may be that it is inappropriate that an agreement should continue to apply to particular land because a permit has been granted in relation to neighbouring land.

1. In Sixtyfifth Eternity, Deputy President Macnamara found that the six permit sites could not be regarded as "neighbouring" and found that they were not relevant permits for the purpose of section 184(4)(b). He indicated that "Parliament intends a relatively narrow focus upon permits affecting the subject land itself or adjacent sites."[28]
2. That a permit affecting the subject land will be considered relevant is evident from the fact that when the applicant appealed to the Supreme Court, against the Tribunal's decision in Sixtyfifth Eternity, the Court ordered that the proceeding be:

... adjourned sine die in order to enable the applicant to prosecute an application for review before VCAT with respect to permit application No P2265/2007 under the Boroondara Planning Scheme, in order inter alia to seek to enliven a fresh basis for the exercise of the power under s 184(3) and (4) of the Planning and Environment Act 1987.

1. It is clear from the terms of this order that the Court considered a permit in respect of the subject land would be a relevant permit in the circumstances of that case under section 184(4).
2. The Council further submitted that the permit in the present case was not a relevant permit because, by reason of condition 2, there is no conflict between the permit and the agreement. Even if there were, the permit does not affect the obligations under the agreement of either Sheradar or the Council.
3. I disagree with this argument. Whatever weight should be given to condition 2 in considering the permit does not affect whether the permit is a relevant permit.
4. Whether a wide or narrow focus needs to be taken is, as I have indicated, something that will turn on the facts and circumstances of each case. However, in this particular case, I find that the permit granted by the Tribunal is a relevant permit.

Is it inappropriate that the agreement should continue to apply to the land?

1. In considering how the Tribunal should exercise its discretion under section 184(4), it is relevant to note that the test is not whether the Tribunal considers it appropriate (as a matter of exercise of general planning discretion) that the agreement may be removed from the land. The Tribunal must be satisfied that it is inappropriate that the agreement should continue to apply.[29]
2. As Deputy President Dwyer said in New Dimension Homes Vic Pty Ltd v Frankston CC[30]:

[19] As I indicated in John Pernal Pty Ltd v Mornington Peninsula Shire Council [4], the test for the removal of a section 173 agreement (and the jurisdiction of this Tribunal under s 184 of the Planning and Environment Act 1987) is more limited than a simple planning "merits" review. The very character of a section 173 agreement is its ability to be registered on the title to land over an extended period as an effective covenant to bind future successors in title to its obligations, and to achieve more broadly based planning objectives. In order to remove land from the operation of a section 173 agreement, in the absence of the consent of all parties to the agreement, an applicant must demonstrate more than a change of planning circumstances as might justify an amendment to a planning permit or a case for rezoning of land.

1. There is no definitive test to determine when it will be inappropriate that an agreement should continue to apply to land. Clearly though, from the words of section 184(4)(b), the Tribunal must have regard to any relevant permit. In this context, I consider it will also be relevant to have regard to the following factors:
   • When the permit was granted.
   • What consideration the responsible authority (under section 60(1A)(i)) and the Tribunal (under section 84B(2)(h)) gave to the agreement when deciding to grant the permit.
   • How does the permit affect obligations under the agreement or vice versa?
2. Looking beyond any relevant permit, it is relevant to consider:
   • The age of the agreement and the context and circumstances surrounding the entry of the agreement.
   • What were the original intent and obligations of the agreement?
   • Whether circumstances have changed since the agreement was entered.
   • Has the land and the owner had benefit from the agreement or do they continue to enjoy benefit from the agreement?
   • What is the relationship between the benefits to the land and the owner of the agreement and any ongoing responsibilities or obligations under the agreement?
   • What benefit would there be in maintaining the agreement?
   • Should the land and/or the owner continue to accept the obligations under the agreement?
3. I will now address these various factors.

1. The permit was granted very recently by the Tribunal and issued at its direction on 11 May 2010.

What consideration was given to the agreement when the permit was granted?

1. There was no explicit discussion of the agreement by the Tribunal in its reasons for decision. Nevertheless, the Tribunal was well aware of the existence of the agreement because of condition 2 and because of submissions made by Residents, Ratepayers and Friends of Berwick Village Inc at the hearing.
2. There was discussion at the hearing of the present proceeding about whether, by including condition 2, the Tribunal was deliberately leaving the issue of compliance with the agreement to a later date and effectively deferring any consideration of whether a permit should be granted even though it was contrary to the agreement, or whether it regarded condition 2 as merely a machinery provision and assumed that there was no issue about ending the agreement or removing the land from the application of the agreement.
3. The Council says that the Tribunal must have treated the existence of the agreement and whether it should continue to apply as a separate exercise to be considered later in the context of any process to remove the agreement from the land. It says that the Tribunal did not consider the question as to whether the agreement should continue to apply to the land, therefore little weight can be given to the permit when deciding whether it is inappropriate that the agreement should continue to apply to the land.
4. I find this contention difficult to accept. The Tribunal was required as a matter of law (pursuant to section 84B(2)(h) of the Act) to have regard to the agreement in determining the application for review. It specifically examined the appropriateness of the terms of the 2006 Plan as it related to the use and development proposal before it. With respect to the 2006 Plan it said:

[19] To give effect to the policy framework for activity centres, the Council has prepared a strategy plan for the Berwick Village[6]. The strategy contains a variety of objectives and provisions which in broad terms seek to create a viable, integrated and consolidated centre which services the needs of its community. The review site is included in the boundaries of the activity centre. The strategy also envisages a three storey height limit but beyond that the plan provides only general direction as to how the site is encouraged to be developed and integrated with the balance of the centre.

[20] The provision of a significant mixed use development on a large, vacant site within the activity centre contributes to the achievement of the strategy's objectives for the centre, and to the achievement of broader policy objectives for sustainable settlement patterns generally. The proposed supermarket and specialty shops will add variety to the existing retail offer within the centre. The hotel will provide short term accommodation and the restaurant/bar will add entertainment options. These uses are to be provided on a site which in the Berwick context enjoys reasonable access to public transport.

[21] The strategy envisages a three storey height limit within the activity centre, but we are satisfied that on this site, a larger building can be contemplated. We have formed this conclusion on the basis that the review site is large, and it is located on a main road. Sites which enjoy these attributes, which are zoned Business 1 and are located within a major activity centre, are rare. Subject to the consideration of, amongst other matters, amenity, built form, traffic and car parking considerations, the policy framework and the provisions of the zone seek to achieve intensive development of such sites. A limitation of the site's development potential to three storeys represents a very limited and constrained assessment of the outcomes which the planning scheme seeks to achieve for this site.

1. The parties agreed that the only remaining obligation under the agreement is "not [to] develop or use or cause or permit to be developed or used the subject land other than in accordance with the Plan". The only aspect of the plan that the Council contends is breached by the permit is the preferred maximum building height of three storeys. In my view, it is clear that the Tribunal has considered this aspect of the Plan and consequently the potential conflict that a building of five storeys would create in terms of the agreement. It has clearly reached the view that it is not appropriate to restrict the site's development potential to three storeys as contemplated by the Plan. Rather, it considered that the Plan's overall objectives would be better served by the proposal before it and by approving a larger building than three storeys.
2. It does not appear that the Council contested the issue of height before the Tribunal or argued that a permit should not be granted because it would be in breach of the agreement. On the other hand, this was an issue raised by parties.[31]
3. I consider that in light of these factors, it is reasonable for me to conclude that the Tribunal, when it considered the grant of the permit, did not consider the existence of the agreement as an insuperable hurdle to the grant of the permit. It did not consider that the existence of the agreement was a reason for not granting the permit.
4. Rather, being aware of the agreement, it considered that the grant of the permit would not be contrary to the objectives of the Plan and would support the planning scheme objectives for the site. Removal of the agreement has been left to subsequent processes. Whether the Tribunal assumed that would be achieved by agreement or by a section 184 application is not relevant. The Tribunal clearly did not consider the agreement should inhibit the grant of the permit and assumed it would be removed. Therefore, in my view, considerable weight should be given to the permit as an expression of what the Tribunal considers is an appropriate planning outcome for the site having regard to the Plan and to the planning scheme.

How does the permit affect obligations under the agreement?

1. The obligation under the agreement with respect to the plan is very broad. The owner covenants and agrees that it will "not develop or use or cause or permit to be developed or use the subject other than in accordance with the Plan."
2. The plan has many components. The reference to height in both the 1990 Plan and 2006 Plan is a single item of detail aimed at implementing broader objectives of the Plan. I agree with the submissions by Sheradar that the objectives of the 2006 Plan do not extend to dictating the terms of future development on specific sites within the Berwick Village Commercial Centre. Instead, the 2006 Plan seeks only to articulate a "vision for future development" in the Berwick Village Commercial Centre as well as a "land use strategy to guide future developments".[32]
3. As noted by the Tribunal, the 2006 Plan provides only "general direction as to how the site is encouraged to be developed and integrated with the balance of the centre".[33]
4. Consistent with the above, the 2006 Plan itself does not contemplate that the building height guidelines - set out under the heading "General Guidelines" in Table 2 at page 51 - should operate as mandatory controls. To the contrary, the relevant guideline expresses only a preference for a particular building height:[34]

Generally, re-development at the focal point locations shown in the Built Form Framework will have a minimum building height of two storeys; however, three-storey buildings are preferred for the focal point locations at the Lyall Road - Clyde Road - High Street node, as shown in the Built Form Framework.

1. In my view, it is therefore arguable whether the agreement imposes an obligation on the owner not to develop the land with a building exceeding three storeys, particularly in circumstances where the Tribunal in granting a permit for a five storey building has explicitly formed the view that a larger building is appropriate and will give effect to the Plan's objectives.
2. The ultimate sanction of a section 173 agreement is the ability to apply for an enforcement order under section 114 of the Planning and Environment Act 1987.[35] Whilst not expressing a concluded view, I consider it would be arguable as to whether there was a breach of the agreement if the building allowed by the permit to exceed three storeys was constructed.

1. The agreement was entered in 1990, some 21 years ago, to facilitate a particular development agreed to by Council prior to rezoning the land from Berwick Residential - Berwick Township Zone to Berwick Office Zone.

1. As noted previously, there were two components to the agreement, namely that:

(a) The land owners seek approval for the development of the land strictly in accordance with the specific development plans referenced in the agreement (which depict two double storey office buildings and one single storey restaurant; and

(b) The use and development of the land be otherwise in accordance with the Berwick Village Commercial Strategy Plan (which, at the time the agreement was entered, set out the former City of Berwick's vision concerning the future use and development of the Berwick township), as amended from time to time.

1. It is evident from the 1990 Plan that the original intent of the agreement was to ensure that the development was in accordance with the plans agreed to by the Council prior to the rezoning.[36] The obligation in Clause 5(b)(iii) of the agreement not to use or develop the land other than in accordance with the Plan appears to flow from the primary obligation to seek approval for the specific development proposal (known as Berwick-on-Lyall), rather than a separate obligation that was independent from the specific development proposal.
2. The obligations created under the agreement relating to the specific development proposal required the owner to make a permit application for the Berwick-on Lyall development as soon as the amendment to the planning scheme was gazetted. It did this and a permit was duly issued. That permit, however, was never acted upon and has since expired. There was no obligation on the owner under the agreement to actually build the Berwick-on Lyall development.
3. I therefore conclude that the primary obligation under the agreement to obtain approval for the Berwick-on-Lyall development was satisfied.

Have circumstances changed since the agreement was entered?

1. Circumstances have changed since the agreement was entered 21 years ago. The township of Berwick has grown substantially and its status in the activity centres hierarchy has also been elevated. The change in circumstances is acknowledged in the 2006 Plan[37] and is discussed at greater length in the 2011 Berwick Village Draft Structure Plan. The 2011 Draft Structure Plan now purports to set out a vision for the future of Berwick Village - "to retain its distinctive character and village feel, but also to accommodate necessary growth and expansion through appropriate development on identified sites."
2. Since the agreement was entered and the land was rezoned to an office zone, further rezoning has occurred. The subject land and adjoining land at 11 - 17 Lyall Road have been included in a Business 1 Zone. The zone purpose is no longer for office use but for the intensive development of business centres for retailing and other complimentary commercial, entertainment and community uses.[38] In a strategic planning context, the land has gone from being regarded as a fringe area under the 1990 Plan to a mixed use development zone and (possibly) a key focal point in the 2006 Plan and a strategic site in the 2011 Draft Structure Plan.
3. Circumstances have also changed in terms of the content of the Plan, which the obligation in the agreement refers to. The 1990 Plan proposed a building height of two storeys, but clearly contemplated scope for development that varied from the strategy Plan, even varying quite significantly. The 2006 Plan raised the preferred height for buildings on the subject land to three storeys, whilst the 2011 Draft Structure Plan proposes four storeys. Each document refers to "preferred" building heights. Neither contemplates them being mandatory.
4. Thus, in line with the growth of Berwick itself, the significance in development potential of the subject land and the adjoining site at 11 - 17 Lyall Road has grown. Each of the Plan documents has emphasised that the strategy should not be treated as a static policy, but should be reviewed periodically to ensure that the objectives outlined remain relevant to change in circumstances.

1. The owner of the land obtained initial benefit from the agreement as a result of the land being rezoned from a residential to an office zone. The specific development proposal referenced in the agreement was never built and the permit expired, so there has been no ongoing benefit in this respect.
2. It is questionable whether the initial benefit flowing from the agreement associated with the rezoning can be said to continue. The adjoining land at 11 - 17 Lyall Road was not included in the agreement and was not rezoned to Berwick Office Zone. Nevertheless, it was rezoned, together with the subject land and other land, to Business 1 Zone in 1999 when the Casey Planning Scheme was introduced.
3. I do not consider it is likely that the existence of the agreement influenced the rezoning of the land to Business 1 Zone. It is more likely that the subject land and the adjoining land at 11 - 17 Lyall Road were rezoned to Business 1 Zone because of their strategic location within the Berwick Activities Centre. In my view, the subject land enjoys its current zoning irrespective of the agreement. I therefore cannot conclude that the land continues to enjoy any benefit from the agreement.

Relationship between the benefits and obligations under the agreement

1. In my view, there is no continuing relationship between any benefits to the land and the obligation under the agreement not to use or develop the land other than in accordance with the 2006 Plan. The 2006 Plan is an adopted Council policy that the Council and the Tribunal may consider before deciding on a permit application[39]. Therefore, even if there was no agreement, the Plan (as amended from time to time) would still be a relevant matter to consider in connection with any permit application for use or development of the land.
2. For reasons that I have previously outlined, I do not consider that the Plan imposes a mandatory height limit on the subject land. I consider that the Plan sets out a preferred height limit. The nature of the Plan and the words used in the Plan all indicate that it is intended to be interpreted as a guideline rather than a rigid control. There are planning controls available to the Council (for example, the Design and Development Overlay) that it could introduce if it wished to place mandatory height restrictions on this or any other land within the Berwick Village. It has chosen not to do so and indeed the Plan is not even referenced in the Local Planning Policy Framework of the Casey Planning Scheme.
3. I therefore consider that whilst there was initially a strong connection between the benefit of rezoning the land to Berwick Office Zone and the specific development proposal referenced in clauses 5(b)(i) and (ii) of the agreement, there is no remaining relationship between the benefit that ensued from the initial rezoning and the ongoing obligations under clause 5(b)(iii). Once the obligation to seek approval for the Berwick-on-Lyall project was satisfied and then, over time, that project fell by the wayside, the relationship between the benefits to the land and the owner of the agreement, in terms of the initial rezoning, and the ongoing obligation under clause 5(b)(iii) of the agreement have become far more tenuous.

What benefit would there be in maintaining the agreement?

1. As I have already noted, any use or development of the subject land will continue to be assessed in the context of the Plan as amended from time to time. There has been an assessment of the current proposal against the 2006 Plan by the Tribunal as part of its decision to grant a permit. The Tribunal concluded that the proposal met the objectives of the Plan.
2. The Council considers that by refusing to amend the agreement to remove the land from the application of the agreement it will be able to defeat the proposal for which the Tribunal has granted a permit. It relies upon the height provisions in the 2006 Plan to say that the development allowed by the permit will be in breach of the agreement. However, for reasons that I have outlined above, I consider it is arguable that if an enforcement order application was made on this basis there would necessarily be a finding that there was a contravention of the agreement.
3. I also note that in the negotiations between Sheradar and the Council since the Tribunal decision, the Council has been concerned to secure a higher rate of car parking. It was successful in these negotiations in terms that Sheradar was prepared to enter a new section 173 agreement to provide for additional car parking. It was not suggested to me that there was any basis for seeking a higher rate of car parking in the existing agreement. It appears, however, from the Council resolution of 19 October 2010 that the Council now wishes to negotiate a reduction in the scale of the development because it does not like the Tribunal's decision.
4. The Council sees benefit in maintaining the agreement because it considers this will give it leverage in either defeating the proposal or negotiating a different outcome. Sheradar sees no benefit in maintaining the agreement because of the uncertainty it will create about its ability to proceed with the proposal for which a permit has been granted. It also says that the benefits that will flow to Berwick in terms of implementing the Plan's objectives and other objectives for the activity centre in the planning scheme would be compromised were this proposal not to proceed. Sheradar says there would be no benefit in maintaining the agreement.

Should the obligations continue under the agreement?

1. Weighing up all these factors, I have reached the conclusion that there is no strong planning related reason why the land and/or the owner should continue to accept the obligations under the agreement. The primary reason why the agreement was first entered was to facilitate a specific development proposal. This development proposal did not proceed. Subsequent rezoning of the land now means that the original proposal would no longer be appropriate in any event. Thus the original intent of the agreement is no longer relevant. In terms of the residual obligation under the agreement not to use or develop the land other than in accordance with the Plan (as amended from time to time), I am satisfied that this planning purpose will continue to be achieved through the operation of the planning scheme and the provisions of the Planning and Environment Act 1987.
2. The Council submitted that:

A finding in this case that it would be inappropriate for the s 173 agreement to continue would pave the way for persons wishing to terminate a section 173 agreement to:

(a) apply for a permit allowing things inconsistent with that agreement;

(b) invite the responsible authority or Tribunal on review to ignore the s 173 agreement, or defer consideration of it either in the manner that Council did in 2005 or by imposition of a condition like Condition 2;

(c) apply to the Tribunal under section 184(3), contending that the Tribunal has already determined that the section 173 agreement is inappropriate.

1. There is no power for the Tribunal to end an agreement by way of a condition in a planning permit or in the context of considering a permit application. It needs to be done either by agreement under section 177 or section 178, or by application to the Tribunal under section 184.
2. When considering the permit application, the Tribunal was bound to consider the effect of the agreement (section 84B(2)(h)). This is not something that the Tribunal could ignore. Although the agreement was not explicitly raised by the Council or the applicant at the hearing, it was raised by other parties.
3. The existence of the agreement was clearly something the Tribunal was aware of as well as the need to end the agreement before the permit came into operation. The only live issue in the context of considering the agreement was the extent to which the permit was "in conflict" with the Plan. The Tribunal considered the permit application and the Plan and concluded that the permit would support the objectives of the Plan. I conclude from the Tribunal's decision that the Tribunal considered that, in terms of the planning merits of the proposal and its relationship with the Plan, the proposal (with the changes made in condition 1), was appropriate.
4. In a situation where there has been a full consideration of the planning merits of a proposal, is not for a later Tribunal in the context of an application under section 184(3) to revisit the previous findings of the Council or the Tribunal, which led to the grant of a permit.
5. I therefore come back to the Council's argument that if the permit is considered to be a relevant permit, it would be too easy to remove land from the application of an agreement. I disagree. Both the Council and the Tribunal have an obligation to consider any section 173 agreement and its implications before making a decision about a permit application.
6. I disagree with the Council's contention that the Tribunal, in granting the permit, has already determined that the section 173 agreement is inappropriate. The Tribunal could not do that in the context of considering a permit application. But it has determined that the existence of the agreement alone should not prevent a permit being granted.
7. The Tribunal has cautioned against being too ready to amend a section 173 agreement because their whole purpose is to impose longer term planning constraints over land.[40] However, that does not mean there will never be any circumstances when it will be inappropriate that an agreement shall continue to apply to land and an owner. The whole purpose of section 184(3) and (4) is to provide a mechanism to resolve disputes when parties cannot agree to amend or end an agreement under sections 177 and 178 of the Act. It may not be an easy task to persuade the Tribunal to amend an agreement in this way but it is not meant to be impossible.

1. For the foregoing reasons, I consider it would be inappropriate that the agreement should continue to apply to the land at 1 - 9 Lyall Road and the owner.
2. In summary, the agreement was entered many years ago. Since then the planning controls and strategic objectives for this land have changed. The planning objects, which led to the agreement being entered, have changed. Indeed, they may be said to have become obsolete with respect to the office use and the style of building that the specific, primary obligation sought to achieve. The specific, primary obligation under the agreement has been discharged leaving only a general obligation that will be addressed in any event through a proper application of considerations under the Act and the planning scheme. The land no longer derives any benefit under the agreement. I consider that there is no longer a sufficient nexus or relationship between the benefit conferred by the agreement and the obligations created by it to require that the agreement continue to apply to the land.
3. In light of the changes in circumstances that have ensued since the agreement was entered and having regard to the permit granted by the Tribunal, I consider it is inappropriate that the agreement should continue to apply to the land and the owner. I will therefore approve the amendment of the agreement to remove the land from the application of the agreement.

1. Sheradar seeks to amend the permit in two ways[41]:
   • Deleting Condition 2; or, alternatively
   • Adding the words "to the satisfaction of the responsible authority" or an appropriate adaptation of that phrase to Condition 2.
2. With respect to the first of these amendments, Sheradar says that Condition 2 is redundant. Section 114 of the Act provides a mechanism by which the Council could seek to enforce the terms of the agreement if development was to be undertaken on the land contrary to its terms. It is prepared to take its chances with respect to any such enforcement proceeding. However, as Condition 2 is presently worded, it prevents the permit from coming into the effect until the agreement is removed. By deleting Condition 2, it would at least allow development to commence in accordance with the permit at 11-17 Lyall Road, which is not subject to the agreement.
3. Alternatively, the applicant requests the terms of Condition 2 to be amended to expressly require that the Council not unreasonably withhold its consent to the removal of the agreement. This would enable the Council's refusals to end the agreement to be challenged.
4. I find the basis of this application and the applicant's arguments in support of it unconvincing.
5. A condition such as Condition 2 was not essential to the grant of a permit. A section 173 agreement is not in the same category as a registered restrictive covenant. There is no equivalent provision in the Act regarding agreements to section 62(1)(aa), which requires that the responsible authority must include a condition that the permit is not to come into effect until the covenant is removed or varied, if the grant of the permit would authorise anything which would result in a breach of a registered restrictive covenant.
6. Nevertheless, it accords with principles of orderly and proper planning to ensure that permits are not granted, or at least do not come into effect, until any agreement, which might conflict with the permit, is amended or removed from the land. Condition 2 serves this purpose.
7. Although I have expressed doubts as to whether it could be said that a development constructed in accordance with the permit could be said to necessarily contravene the agreement, nevertheless I do not consider it is consistent with orderly planning to "invite" enforcement proceedings or to create a situation of uncertainty in this respect. It was entirely appropriate for the parties at the previous Tribunal hearing to consent to the inclusion of Condition 2. It is an appropriate condition to be included in this permit and I consider it would not be appropriate within the meaning of section 87A(1) of the Act to amend the permit to delete it.
8. Nor do I consider it to be appropriate to amend Condition 2 as sought by Sheradar. As I have previously noted, there is no power by the Tribunal to end an agreement by way of a condition in a planning permit or in the context of considering a planning application. Ending or amending an agreement needs to be done either by agreement under section 177 or section 178, or by application to the Tribunal under section 184 of the Act. Amending Condition 2 by adding the words "to the satisfaction of the responsible authority" or similar, simply purports to create opportunity to appeal to the Tribunal against any refusal by the Council to agree to end or amend the agreement. I consider this is an attempt to invest the Tribunal with a power that it does not possess.
9. I agree with the comments of Deputy President Dwyer in Popular Past-times Pty Ltd v Melbourne CC[42] where he said:

[63] Section 87A ... purports to provide a very wide discretion. ...what is appropriate will depend upon the facts and circumstances of each case, and ... exercise of my discretion ought to take account of any relevant decision guidelines or considerations set out in the Act, and be reasonable and for a proper purpose having regard to the objectives of the Act and/or the specific provision conferring the discretion. This includes, in my view, whether or not the amendment of the permit would lead to an appropriate planning outcome.

1. In all the circumstances, I do not consider the amendment of the permit to delete or amend Condition 2 would lead to an appropriate planning outcome. This application will therefore be disallowed.

1. These two applications were for the following:
   • Under section 149(1)(a) of the Act, to direct Council to remove the section 173 agreement.[43]
   • Under section 149A of the Act, to declare that properly construed, Condition 2 requires Council to consent to the removal of the section 173 agreement.[44]
2. The parties addressed these two applications together and I propose to do the same.
3. With respect to Condition 2, Sheradar argued that, in addition to setting out the mechanics pursuant to which the permit will come into effect, this Condition should properly be construed as requiring the Council to not unreasonably withhold its consent to the removal of the agreement. To interpret the Condition otherwise, would allow the Council, without any reasonable cause, to frustrate the use and development of the land as specifically allowed by the Tribunal. In this context, Sheradar notes that at no time prior to the grant of the permit did the Council oppose the development proposal on the basis that it was inconsistent with the terms of the agreement. To the contrary, the Council was aware of the need to remove the agreement and at no stage prior to the final order of the Tribunal did it indicate that it would oppose the ending of the agreement (either absolutely or on condition).
4. I do not consider that Sheradar's arguments with respect to these two applications can be supported for the following reasons as submitted by the council.
5. Section 149(1)(a) of the Act states:

A specified person may apply to the Tribunal for the review of -

(a) a decision of a specified body in relation to a matter if a planning scheme specifies or a permit contains a condition that the matter must be done to the satisfaction, or must not be done without the consent or approval, of the specified body;

1. It has been said that this is "a very wide provision designed to offer a general opportunity for the review of matters lying outside the opportunities for review offered by other provision of the Planning and Environment Act".[45]
2. But section 149(1)(a) is not "a 'general provision' for review ... it is relevantly directed to adjudication with respect to compliance with the terms of permit conditions where these conditions require performance to the satisfaction of the responsible authority.[46]
3. That is because section 149(1)(a) confers jurisdiction on the Tribunal to review a decision of a specified body in relation to a permit condition only if the condition requires that the matter must:

(a) be done to the satisfaction of the specified body; or

(b) not be done without the consent or approval of the specified body.

1. Such conditions are said to impose a "secondary consent" because the primary consent - the permit - has issued, but the condition requires a further consent to be obtained from the specified body in relation to the matter.[47]
2. Section 149 of the Act "does not authorise a review of decisions made by a specified body under the Act but is confined by its terms to the review of decisions under a planning scheme, a permit condition, a section 173 agreement or an enforcement order"[48] A decision to refuse to agree to something under the Act must be reviewed, if at all, "as provided for by the Act".[49]
3. By its application under section 149(1)(a) of the Act, Sheradar asks the Tribunal to review Council's decision to refuse under section 177(2) to end the section 173 agreement.
4. Condition 2 does not impose a secondary consent of the kind to which section 149(1)(a) is directed. The "consent" in issue, if there is one, is the agreement of Council under section 177(2) of the Act to end the section 173 agreement. The termination of section 173 agreements is governed by Division 2 of park 9 of the Act; the decision to agree (or not agree) to end the section 173 agreement is a decision under the Act, not a decision under Condition 2. Section 194(1)(a) does not confer jurisdiction to review such decisions.
5. Parliament has clearly turned its mind to the relationship between Division 2 of Part 9 and section 149(1): section 149(1)(b) allows for review only of matters provided for by section 173 agreements.
6. With respect to the application under section 149A, Sheradar says that Condition 2 is properly construed as a machinery provision which requires Council to consent to the removal of section 173 agreement so that the applicant can act upon the permit. The condition should not be construed as giving the Council and unfettered discretion as to whether it does or does not consent to the removal of the section 173 agreement.
7. However, Condition 2 does not require Council to do something. Rather, it prevents the applicant from doing something until the section 173 agreement is ended under Division 2 of Part 9 of the Act. As previously noted, Condition 2 does not and could not operate to require the ending of the amending of the agreement, whether by consent or otherwise. That can only occur under other provisions of the Act. All that Condition 2 does is to provide that the permit will not come into effect until the agreement has been removed. It does not require the Council to consent to this. There is therefore no basis for Sheradar to request the Tribunal to direct the Council to agree to end the section 173 agreement under section 149A(2)(b).
   1. These applications must therefore be refused also.

1. The final application made by Sheradar under section 149B(1) of the Act seeks a declaration that Council's decision to refuse to agree to the section 173 agreement being ended was unlawful.[50]
2. The basis for this application rests on Wednesbury unreasonableness. Sheradar submits that the Council's refusal to agree to end the agreement pursuant to section 177 of the Act[51] is unlawful, on the basis that the Council is exercising its discretion to withhold consent for an improper purpose. Sheradar points to the express terms of the Council's resolution made on 19 October 2010. The Council's justification for its refusal to end the agreement is the facilitation of further "negotiations with the developer to seek further reductions in the scale of the development".
3. The scale of the development was a key consideration at the previous Tribunal hearing and in the Tribunal's reasons for decision. Sheradar says that the Council's decision to refuse to agree to end the agreement can be characterised in no other way but an attempt to subvert the order of the Tribunal, which was made in its decision, by coercing the applicant to make alterations to the approved development proposal. Its says that this much has been repeatedly recognised by Council's own planning officers, who have advised the Council against withholding its consent so as to "stall the appropriate approved development from occurring".
4. I disagree with Sheradar that the Council's justification for refusing to end the agreement which was because it wished to negotiate with the applicant to seek a further reduction in the scale of the development, must necessarily be regarded as an improper purpose.
5. It was not suggested by the applicant that its earlier agreement to negotiate a new agreement under which it would provide a greater number of car parking spaces than the Tribunal directed was a negotiation based on an improper purpose. When it comes to negotiating the ending or amending of a section 173 agreement, "political" considerations may come into play without being improper purposes provided they relate to a planning purpose.
6. The very nature of a section 173 agreement means that it may constrain use and development of land that may otherwise be permitted under the planning scheme.[52]
7. A section 173 agreement is an instrument that forms part of the planning controls which apply to land.[53] In Wodonga CC v Kiene[54], Deputy President Dwyer said:

[32] A section 173 agreement is a creature of statute, established to play a specific role in the planning system in Victoria. ... Having regard, amongst other things, to what an agreement can provide for, the fact that an agreement is made with a responsible authority, and the process for enforcement in similar fashion to a planning scheme or permit, it is clear that a agreement forms part of a suite of complementary planning controls and tools under the Act that are available to regulate the use and development of land, or to otherwise achieve a planning objective.

1. In all the circumstances, the scale of development in this location can be said to be a planning purpose, just as I consider the rate of car parking to be a planning purpose.[55] Equally I do not consider that by opposing the ending the agreement, the Council was seeking to subvert the determination of the Tribunal in the previous proceeding
2. Even though the Tribunal determined to grant a permit, which the Council continues to consider is contrary to the section 173 agreement, this does not mean that the Tribunal decision is determinative of whether or not the section 173 agreement should be ended or amended, or whether the Council is obliged to agree to end or amend the agreement. In the planning permit proceeding, the Tribunal did not have the power to direct the removal of the agreement or to require the Council to end or amend the agreement. The requirement in the Act to have regard the agreement means that it was open to the Tribunal to decide not to grant the permit because of the existence of the agreement, although it was not bound to do so. Equally, it was open to the Tribunal to grant a permit, which it did in the present case, but to determine that the permit would not come into effect until the agreement was removed. This left the merits of removing the agreement to be resolved by a separate process, either by agreement under sections 177 or 178 of the Act, or by an application under section 184. When the parties cannot agree to end or amend an agreement under sections 177 or 178, there is a limited opportunity to apply to amend the agreement under section 184(3). In the present case, such an application has been made and has been successful. This does not mean however, that the Council's refusal to agree to end or amend the agreement was improper.
3. I therefore do not agree that there is any basis for making a declaration under section 149B of the Act as applied for by Sheradar.

1. The applicant applied for costs. However, I do not consider that this is a case where there should be any departure in the general rule set out in section 109(1) of the Victorian Civil and Administrative Tribunal Act 1998 that a party to a proceeding should bear at their own costs in the proceeding.

[1] Sheradar Pty Ltd v Casey CC [2010] VCAT 858

[3] But not the adjoining land at 11-17 Lyall Road

[4] Berwick Village Commercial Strategy Plan; City of Berwick December, 1990: Page 19

[5] Berwick Village Commercial Strategy Plan; City of Berwick December, 1990: Page 22

[6] Berwick Village Commercial Strategy Plan; City of Berwick December, 1990: Pages 37-38

[7] Berwick Village Draft Structure Plan May 2011

[8] Berwick Village Commercial Centre Strategy September 2006: Figure 4D SWOT Analysis - Opportunities and Threats, Page 14; Figure 9 Development Opportunities, Page 31. See also comments in section 3.5 "Development Opportunities / Potential", which states that the Village offers a number of development opportunities, as shown in Figure 9, namely:

• The peripheral areas along Wheelers Street and Lyall Road that can be nutured to expand consistent with the framework prescribed for the area;

[9] Berwick Village Commercial Centre Strategy September 2006 page 47

[10] I believe this refers to the Built Form Framework Plan shown in Figure 12 of the Berwick Village Commercial Centre Strategy September 2006. Unfortunately, this plan is quite illegible.

[11] The subject land is on the west side of Lyall Road.

[12] Berwick Village Commercial Centre Strategy September 2006 page 51

[13] Berwick Village Commercial Centre Strategy Plan 1990; Page 5

[14] Clause 11.04-2 establishes the following activity centre hierarchy - Central Activities Districts, Principal Activity Centres, Major Activities Centre, Specialised Activity Centres and Neighbourhood Activity Centres.

[17] I was tendered copies of the written submissions made by parties at the hearing. There was no reference to the agreement in the submissions of either the Council or the applicant.

[18] Letter dated 24 February 2010 from Russell Kennedy to Norton Rose; letter dated 4 March 2010 from Norton Rose to Russell Kennedy and letter dated 10 March 2010 from Norton Rose to Casey City Council.

[19] Goodcorp Pty Ltd v Melton SC [2003] VCAT 911

[20] [2004] VCAT 2356

[22] See letter from Russell Kennedy to Norton Rose dated 24 February 2010.

[23] I am discounting the other applications, which Sheradar has made, in this context.

[25] [2002] VCAT 441

[27] [2009] VCAT 2314

[28] [2009] VCAT 2314 at [190]. The comments of Deputy President Byard in the recent case of Chahad Properties Pty Ltd v Glen Eira CC [2011] VCAT 1003 at [92] expresses some disagreement with the interpretation of what constitutes a 'relevant' permit in Sixtyfifth Eternity. However, I have not relied upon these comments in my decision because it has not been necessary in consideration of this issue.

[29] John Pernal Pty Ltd v Mornington Peninsula SC [2009] VCAT 1595 at [13]

[30] [2010] VCAT 579

[31] Specifically by Residents, Ratepayers and Friends of Berwick Village Inc. I have not looked at other submissions made by other parties to see whether this issue was raised by them also.

[32] See page I of the 2006 Strategy Plan

[33] See [2010] VCAT 858 at [19]

[35] Pursuant to section 173 of the Act it is also an offence to contravene a section 173 agreement.

[36] See paragraph [7] above and Berwick Village Commercial Strategy Plan; City of Berwick December, 1990: page 19. See also other documentation surrounding the adoption and approval of Amendment L8 to the Berwick Planning Scheme, in particular the Panel Report dated 12 March 1991.

[37] Berwick Village Commercial Strategy September 2006: H1

[38] Clause 34.01 Casey Planning Scheme - Business 1 Zone purpose

[39] Under section 60(1A)(g) of the PEA 1987

[40] See for example, John Pernal Pty Ltd v Mornington Peninsula SC [2009] VCAT 1595 and the comments of Deputy President Dwyer at paragraph [7] of that case quoted earlier.

[42] [2008] VCAT 1184

[45] ECO Resorts Aust Pty Ltd v Yarra Ranges SC [2004] VCAT 1190 at [9]

[46] Casey City Council v Dennis Family Corp (2007) 28 VPR 78; [2007] VSC 238 at [27]

[47] See Tarwin Valley Coastal Guardians Inc v Minister for Planning [2010] VCAT 1226 at [9] and the decision there cited.

[48] Deakin University v Whitehorse City Council [2009] VCAT 134 at [125], explaining the effect of the decision in Casey City Council v Dennis Family Corp [2007] VSC 238.

[49] Deakin University, ibid, at [26]

[51] Section 177(2) provides that an agreement may be ended "by agreement between the responsible authority and all persons who are bound by any covenant in the agreement"

[52] See section 174 of the Planning and Environment Act 1987

[53] Solid Investments Australia Pty Ltd v Greater Geelong City Council [2004] VCAT 2356 at [43]

[54] [2009} VCAT 81

[55] As to what constitutes a planning purpose, see Walsh, J in Allen Commercial Constructions Pty Ltd v North Sydney Municipal Council in [1970] HCA 42; (1970) 123 CLR 490 at 499-500 and Planning Commission (WA) v Temwood Holdings [2004] HCA 63 at [93]; [2004] HCA 63; (2004) 221 CLR 30 at 67 (Gummow and Hayne JJ)