Skypoint Investments Pty Ltd v Gavranich & Anor

District Court of WA|2010-08-09|Before: Mr P

The applicant is further advised that the infrastructure contributions for Lot 538 shall be satisfied prior to the Shire issuing clearance for lots associated with the subject subdivision. The applicant is advised to contact Ed Rosowski of Council's Engineering Services on 9257 9950 to discuss provisions regarding specific cost contributions.

Costings for the roundabout at the intersection of Apricot and Berkshire Roads are estimated at a total cost of $315,000 with a contribution of $22,000 to be paid by the subdivider/applicant for the subdivision of Lot 538 (189) Berkshire Road, Forrestfield."

"8. The Shire will correspond with the proprietors of land to the east of Apricot Road to ensure that they will contribute as part of their agreement area, to one half the cost of Apricot Road upgrade. Failing that, Civil Properties and the Shire to examine an arrangement to recover the cost under the provisions of Section 28 of the Town Planning and Development Act 1928."

13 The evidence of Mr Milward was that he did not accept Mr McKellar's letter of 13 December 2002 as a completely accurate record of the discussions between them. Mr Milward said the result of the discussions, instigated by Mr McKellar on behalf of the plaintiff, was to permit the plaintiff to undertake certain parts of the infrastructure works identified by the Shire and approved by the WAPC as necessary for the U7 development area and in consideration of the plaintiff doing the works to allow the plaintiff to set off the costs associated with the work from the monetary contribution which was otherwise payable by the plaintiff pursuant to the contribution tables that formed part of the basis upon which all parties in AA1 and AA2 were permitted to subdivide their properties.

14 Mr McKellar said in his evidence that, as the plaintiff's acquisition of land within AA1 proceeded after Lot 538, he became concerned with the "efficacy and cogency" of the contribution scheme under the ODP for U7. He said:

"There was a lot of negotiations ... during the planning approvals process between myself, the local government and the Planning Commission in relation to that and what works we had to do as far as subdivision works and the like, and I came to an agreement with the Shire." (T58)

15 Mr McKellar expressed concern that the plaintiff was being asked to contribute to works which he considered it should not have been required to contribute to or which should not have formed any part of the contribution scheme. He also felt that owners were being asked to contribute to costs which he considered were more properly Shire costs. He also felt that some of the costs were costs that would ordinarily be borne by the owners in the course of their subdivision works.

16 Mr McKellar explained how the plaintiff decided to take it upon itself to approach the issue of contributions "from an entirely different angle" rather "than merely conceding to give money to [the] purported contributions scheme" (T60).

17 Mr McKellar said the plaintiff's motivation was to upgrade the whole of Apricot Street, rather than contribute to 50 per cent of the cost of upgrading Apricot Street, on the basis that it was more convenient for the plaintiff and would assist the plaintiff in the presentation of its subdivision to potential purchasers. Nobody criticised the plaintiff for wanting to have the works undertaken sooner rather than later to advance its commercial interests.

18 Mr McKellar gave evidence that he also thought it was "a fairly easy recovery provision under ... section 28A, as it was at the time, of the Planning Act". On this basis, Mr McKellar said he "put to Mr Milward, amongst other things, that [the plaintiff] upgrade the whole of that road, Apricot Street" (T60). He noted that the plaintiff was also required to undertake other works in respect of its subdivision in any event.

19 Mr McKellar's evidence was that as a result of the meeting with Mr Milward, he understood the plaintiff "would upgrade the whole of that road but, more importantly, as I state in par 8 of [the] letter, that they would assist me recovering one-half of that road cost which is summarised at clause 8". Mr McKellar's evidence was that he "made it quite clear to Mr Milward that I would not pay for 100 per cent of the cost of this road if I couldn't recover it from the neighbour and my understanding was he was happy with that" (T61).

20 I note Mr Milward's evidence was that he did not respond to par 8 of Mr McKellar's letter because he did not, in effect, see the need on the basis that he advised the plaintiff and other affected owners of the proposed arrangement with the plaintiff by letter dated 17 December 2002. I will refer to this letter shortly.

21 The evidence of Mr Milward was that the Shire (and the WAPC) approached the issue of the plaintiff's contribution on the basis that the plaintiff would, in the end, still be obliged to comply with its percentage contribution according to the schedule for all necessary works in AA1 and AA2, as indicated by the WAPC when it initially approved the ODP for U7 in its letter dated 29 July 1999 (attachment 2).

22 Mr McKellar described the process adopted by Mr Milward on behalf of the Shire of Kalamunda as 'moving money around between schedules that were in this purported scheme'. Mr McKellar expressed the view that he was not concerned at the time by what Mr Milward did because he did not see "any merit in the schedules anyway. They had no effect, so he could move money around where he wanted. It wasn't my concern" (T61).

23 Mr McKellar said the Shire's solicitors prepared a deed which the plaintiff amended and which was ultimately signed, confirming the contributions that the plaintiff would make. Mr McKellar said that he did not believe he entered into any agreements regarding the contribution scheme as part of the deed.

24 Mr McKellar in his evidence accepted that the plaintiff required the WAPC's approval (which was of course conditional on the contributions schedule), whilst at the same time rejecting any requirement for an outline development plan. His evidence in regard to the alleged agreement by the Shire to permit the plaintiff to recover from affected owners, the costs of the proposed works was, in my view, an attempt by the plaintiff to distance itself from any acquiescence to the contribution scheme. This was because the plaintiff never formally challenged the schedules when it had the opportunity to do so in the approvals process. Instead, there was tacit approval and implicit compliance with the force and effect of the contribution schedules, as evidenced by the conduct of the plaintiff at all material times in its dealings with the Shire and the WAPC.

25 The plaintiff, according to Mr McKellar, as part of constructing Apricot Street put in a sewerage line on its side (two-thirds of the length) and a water main (the whole length) in the ground within the road reserve before upgrading the pavement and kerbing. The plaintiff's complaint, as Mr McKellar put it, was that "subsequent to that construction, when the later subdivider went ahead, he fed off all of those water mains with his own water mains into his subdivision and fed off sewerage mains into his subdivision" (T63 - 64).

26 In the course of his evidence, Mr McKellar produced a map obtained from the Water Corporation indicating the water main installed on the plaintiff's side of Apricot Street to which the defendant had "tapped in" in three places (Exhibit 6P2). The plaintiff also tendered a sewer mains plan showing the sewerage pipe installed by the plaintiff to two-thirds of Apricot Street into which the defendant had "tapped in" in five places (Exhibit 6P1). In this regard, the plaintiff's claim is put in the alternative that, if it is not successful with respect to obtaining a contribution to the cost involved in installing both the water and sewerage pipes, then it should obtain a benefit for the ducts in the areas where the defendant has joined its piping. Mr McKellar accepted that the Water Corporation approved and certified both the water and sewerage part of the works.

27 In cross-examination, Mr McKellar said the plaintiff first became interested in the area in "around 2000" and that he was aware of an outline development plan for AA1. He accepted that AA1 and AA2 formed part of an area described as U7. He said he only became aware of cl 6.13 in the Shire of Kalamunda's District Planning Scheme No 2 sometime later. He eventually accepted in cross-examination that he understood both AA1 and AA2 were within the urban development zone. He accepted that he would have seen the outline development plan at about the time that he, on behalf of the plaintiff, showed an interest in buying land in the area.

28 Mr McKellar accepted in cross-examination that, by the time he received the WAPC's letter of 19 December 2001, he understood what was in its earlier letter of 29 July 1999 (T81). Mr McKellar accepted that he could not proceed with the subdivision of the plaintiff's Lot 538 unless the plaintiff satisfied Condition 11 which by its express terms (at least on the defendant's case) required the plaintiff to contribute in accordance with attachment 2 to the infrastructure works described in that document, which formed part of the WAPC's letter dated 29 July 1999. He accepted the plaintiff had to pay money, but not the proposition that it had to contribute in accordance with the schedule percentage for the costs of the works identified. As Mr McKellar put it, "I agreed to pay money. I didn't accept the condition".

29 Mr McKellar did accept in cross-examination that the plaintiff was required, in order to comply with Condition 11, to make infrastructure contributions in accordance with the schedule. He did accept that although the plaintiff did appeal the conditions of approval for the subdivision, it did not do so in relation to Condition 11 of the approval. He also accepted that the consent orders made by the Town Planning Appeal Tribunal on 30 July 2002 expressly included the retention of Condition 11 which, in the conditions attaching to the order in Sch A, became Condition 7 (in exactly the same terms). Further, Condition 7 was the subject of an advice note, being par 3 in the following terms, (which are almost identical to the original advice note in the approval appealed against):

"3. With regard to Condition 7, the Shire of Kalamunda advise that the infrastructure contribution is for the upgrading/construction of Berkshire Road, the construction of a roundabout at the intersection of Berkshire and Apricot Roads, the upgrading of the dual use paths, the upgrading of Sultana Road and the construction of drainage as outlined in Annexure 'D'.

The subdivider is further advised that the infrastructure contributions for Lot 538 shall be satisfied prior to the Shire issuing clearance for lots associated with the subject subdivision. The subdivider is advised to contact Ed Rosowski of Council's Engineering Services on 9257 9950 to discuss provisions regarding specific cost contributions.

Costings for the roundabout at the intersection of Apricot and Berkshire Roads are estimated at a total cost of $315,000 with a contribution of $22,200 to be paid by the subdivider."

30 Mr McKellar accepted that by September 2002, if not earlier, the plaintiff had become interested in Lot 539 and Lot 2.

31 Mr McKellar gave evidence that he recalled receiving a facsimile from the Shire of Kalamunda (Ms Butterworth, Manager Planning Service) dated 8 November 2002 in relation to a number of subdivision applications lodged by the plaintiff. The communication related to the plaintiff's applications for proposed subdivision of Lot 2 and Pt Lot 539 (four in total).

32 The facsimile attached the Shire's response to each of the four applications lodged. It indicated that the Shire was willing to meet with Mr McKellar to discuss any of the conditions that had been imposed and appropriate ways that the plaintiff might seek to satisfy the conditions. The Shire's response in respect to each application was sent to the WAPC (the authority which had the power to approve the subdivision). Two of these indicated it was a condition of the council's approval that the subdivider (i.e. the plaintiff) would contribute to infrastructure contributions for the U7 Agreement Area 1, as endorsed by the Planning Commission on 29 July 1999, to the satisfaction of the Shire of Kalamunda.

33 Mr McKellar said he recalled meeting with Ms Butterworth and Ms May from the Department of Planning and Urban Development in November 2002. He accepted that no agreement was reached at the meeting.

34 Mr McKellar agreed that he received a copy of the letter sent by Mr Milward dated 17 December 2002 to landowners in AA2. Mr Milward was seeking to inform affected owners, and to clarify for them, that the plaintiff would satisfy part of its contribution obligations by undertaking works necessary in Apricot Street, the cost of which would be set off against the upgrade of Berkshire Road.

35 Mr McKellar's evidence was that he thought he was "kicking in $35,000", as opposed to contributing to "their scheme". By adopting this position, he sought to put a different interpretation on the content of Mr Milward's letter to AA2 owners dated 17 December 2002.

36 In my view, the proper interpretation of Mr Milward's letter dated 17 December 2002 has to be understood in the context of the plaintiff's request that it be permitted to complete the upgrading of Apricot Street to Sultana Road East. The plaintiff made the request because it was ahead in time with its subdivision compared to the owners in AA2. Administratively, this involved the need to recognise the financial contribution of the plaintiff in the context of its existing obligations under the contribution schedule. The Shire needed to reallocate the funds to the infrastructure upgrade works required for U7 in a way that the total cost and contribution percentage in place for each owner within AA1 and AA2 was not affected or changed. Mr Milward was indicating this principle to the parties involved and, in my view, this is what he did, nothing more and nothing less. He did not say, in effect, that the contribution scheme no longer applied to the works proposed to be done by the plaintiff. Also, he did not say to the plaintiff that it was at liberty to recover one half of the cost of the works from the defendant. For the reasons which follow, in my opinion the plaintiff did not change its position either. It continued to order its affairs on the basis that the contribution schedules as amended were operative and applicable.

37 In cross-examination, Mr McKellar (eventually) accepted that, in December 2002 the subdivisional approval the plaintiff obtained for Lot 538 as part of AA1 included an obligation to make infrastructure contributions for the upgrading of Berkshire Road between Roe Highway and Apricot Street in accordance with the percentages set out in attachment 2 to the WAPC's approval to modify ODP for U7 dated 29 July 1999. The Schedule also proposed that the AA1 owners meet one-half of the cost of upgrading Apricot Street adjacent to AA1. It is significant that Apricot Street does not directly abut the area of the Lot 538 subdivision.

38 In cross-examination, Mr McKellar accepted that the purpose of the contribution table prepared by the Shire was to give effect to its intention to have landowners make the contributions set out in the stated percentages towards the costs of carrying out the identified public works. He also accepted, as is plainly the case, that the purpose of the contribution schedule was to require landowners to make contributions to the identified public works necessary for the agreement areas within U7, irrespective of whether the specified works involved land which fronted or was adjacent to the land holding of the particular owner.

39 It is plain from the process evidenced by the documents that the intention of the Shire was that the contribution table was a collective way of obtaining contributions rather than obliging each subdivider to pay for the public works immediately adjacent to that owner's particular lot. By agreeing to contribute as a condition of their subdivision approval, the owners were, in my opinion, indicating to each other that they agreed the identified upgrade works were necessary for the whole of the U7 area and that by "pooling" the cost, and therefore their contribution to the cost of the works, they in effect agreed "to contribute" to the costs for the purposes of s 159 of the Act. In other words, they accepted that they would not make statutory claims in this regard against each other as if no contribution arrangement existed.

40 It is difficult to understand the basis upon which Mr McKellar maintained in his cross-examination that Mr Milward's letter was "completely inconsistent" with his own record of their meeting on 10 December 2002, as set out in his letter of 13 December 2002. Mr McKellar was given ample opportunity to explain his position in cross-examination but, with respect, his evidence in this regard was difficult to follow. In my view, it is also inconsistent with the plaintiff's conduct at the time. If there had been, in fact and in reality, any material difference, it is very likely that Mr McKellar would have responded at the time. Instead, Mr McKellar did not say anything. In particular, he did not respond to Mr Milward with any disagreement about the way in which Mr Milward proposed to deal with the AA2 landowners as a result of the Shire agreeing, on behalf of the AA2 owners, that the plaintiff, as an AA1 landholder, could off-set its monetary contribution by receiving a credit for the agreed value of the works proposed to be undertaken.

41 In cross-examination, Mr McKellar maintained the position that the financial payments made by the plaintiff in relation to infrastructure works in the U7 agreement area were in respect of Lot 539 and Lot 2, and were not made on the basis of any obligation to contribute as an AA1 owner (T129). Notwithstanding this Mr McKellar, on behalf of the plaintiff, wrote to the Shire of Kalamunda by letter dated 13 February 2004 to obtain final clearance for its subdivision and, in doing so, referred to its "U7 Agreement Area 1 contribution" as having been satisfied on the basis "Settled by Deed".

42 In re-examination, Mr McKellar agreed with the proposition of the plaintiff's counsel that the $22,200 referred to in par 3 of the advice notes, which formed part of Sch A to the consent orders made on 30 July 2002, was "the total contribution for Lot 538".

43 With respect to Mr McKellar, it was difficult to understand and follow his evidence. Many of his answers were not responsive to the question put to him. Part of the reason for this was because he tended, in respect of almost every question put to him, to try to anticipate the question and where counsel might be seeking to take him. It seemed to me he was intent when giving his evidence, irrespective of the question, to respond in a way that he thought would best advance the interests of the plaintiff. On occasions his answers were based on semantical interpretations of the question or of the document being referred to. This invariably led to a further process of questioning to arrive at a position which reflected a fact which on the evidence was not in dispute or it necessitated the question to be put to him again and again until he answered it.

44 It was apparent from the evidence of Mr McKellar that in his opinion, based on historical accounting and presumably a number of assumptions for the purpose of the exercise, the plaintiff paid more by way of contributions to aspects the development upgrade works necessary for U7 than the defendant. I accept of course that Mr McKellar feels aggrieved by his conclusions in this regard. But this is a matter which, in my opinion, is irrelevant to the factual and legal issues that must be determined to resolve the plaintiff's statutory claim against the defendant in this case. The fact is that the plaintiff sought subdivisional approval in respect of its land and this was granted on the basis of a contribution schedule for landowners in AA1. At all material times it was in effect a condition of the approvals obtained by the plaintiff that its contributions be determined having regard to the stated percentages, even if the precise nature of some of the works involved varied or changed as a result of the pace at which the various subdivisions proceeded.

45 The defendant's first witness was Ms Amanda Butterworth. Ms Butterworth is a qualified town planner. Between 1998 and 2004, she was the Manager Planning Service for the Shire of Kalamunda. In this role, she was responsible for "where and what type of building took place in the Shire". This included dealing with subdivisions, scheme amendments, development applications, outline development plans, strategic planning and scheme review. Relevantly, she was involved in the assessment of subdivision applications and preparation of the Shire's response to the WAPC for proposed subdivisions.

46 Ms Butterworth gave evidence in relation to the adoption by the council on 15 February 1999 of the ODP for U7 for Agreement Area 1. The outline development plan was considered by the Shire pursuant to cl 6.13 of the Shire of Kalamunda District Plan Scheme No 2 (as amended). By reference to the relevant documentation, she explained the adoption process by the WAPC of the outline development plans for AA1 and AA2 and their modification. It included WAPC's support as recorded in its letter to her dated 29 July 1999 for the proposed method of determining infrastructure contributions for Agreement Area 1.

47 Ms Butterworth was, in her evidence, taken through the relevant correspondence and minutes of meetings and documents relating to AA1 and AA2. On 8 November 2002, she sent the Shire's response to the plaintiff's subdivision applications for Lot 2 and Pt Lot 539 to Mr McKellar of the plaintiff. In her covering facsimile, Ms Butterworth offered to meet with Mr McKellar to discuss the conditions proposed in the Shire's advice to the WAPC dated 8 November 2002. In respect of two of the applications the Shire indicated that a condition of the council's approval was that the plaintiff must "contribute to infrastructure contributions for the U7 Agreement Area 1 as endorsed by the Planning Commission on 29 July 1999 to the satisfaction of the Shire of Kalamunda".

48 Ms Butterworth's evidence was that in late November she met with Mr McKellar and Ms May from the Department of Planning and Infrastructure to review the conditions on the plaintiff's subdivisions, including the plaintiff's contributions to the urban development area. She refreshed her memory about the meeting by reference to an internal memorandum she prepared on 3 December 2002. She recalled that the meeting concerned the conditions requiring developer contributions, the road upgrading and the public open space and/or draining. On the issue of developer contributions, Ms Butterworth said:

"I would have made it clear that the intent of the outline development plan was to require contributions to a development scheme and this condition was consistent with the outline development plan that had been endorsed by the council and the West Australian Planning Commission." (T14)

49 Ms Butterworth did not recall any agreement being reached at the meeting in relation to the issues. However, she did think the plaintiff had "at some stage" made a developer contribution towards the infrastructure. The subdivisions in question were both within AA1.

50 Ms Butterworth was aware that Mr Milward progressed the issues with Mr McKellar after her meeting with him. She liaised with Mr Milward in relation to the proposed conditions for subdivision of Lot 2 and Pt Lot 539. In this regard she assisted in the preparation of the Shire's response to the WAPC as set out in the Shire's letter of 9 January 2003 and the proposed amendments to the conditions of the plaintiff's subdivisions.

51 Ms Butterworth confirmed that the Shire received a letter from the Planning Commission concerning the proposed modification to the outline development plan for AA2 which was discussed at a general services meeting of the Shire on 7 April 2003.

52 Ms Butterworth gave evidence that, as a result of the plaintiff's request to undertake the upgrade of Apricot Street and other works, Mr Milward adjusted the contribution tables which identified the infrastructure works to be undertaken and the percentages of each owners' liability for the costs of such works, but so that the total cost of each developer was not changed in financial terms. She said, notwithstanding the infrastructure work which the plaintiff undertook to complete, there was still a shortfall due from the plaintiff and this was reflected by the financial payment made by the plaintiff.

53 In cross-examination Ms Butterworth said she believed the original outline development plan for the whole of the urban development zone had been prepared by Gray & Lewis on behalf of a developer (not the council). Ms Butterworth accepted that the proposed outline development plan for AA1 which was adopted by the Shire on 15 February 1999 did not contain the layout of a sewerage system. Neither did it contain, on the face of it, the method of carrying out the development and the projected time of completion for each stage of development. Her evidence was that the plan did contain the location of a drainage basin. She accepted that the developer contributions schedule was prepared by the Shire and it did not form part of the initial documentation that was submitted by Mr McKellar or the firm which submitted the ODP on behalf of the landowner. She suggested that the Shire did this in response to the WAPC's Condition 2 imposed by its letter of 28 April 1999 on the outline development plan for AA1. Ms Butterworth's evidence was that she was not aware of Mr McKellar's letter dated 13 December 2002 to the Shire (addressed to Mr Milward) and therefore the reference in cl 8 to the proposed need (according to the plaintiff) to consider an arrangement for recovery from affected owners arising out of the Apricot Road upgrade.

54 In summary, Ms Butterworth's evidence was that she believed:

"... that the outline development plan required developer contributions and that the work Mr McKellar undertook was capital works in lieu of cash, and that was the choice of Mr McKellar to undertake capital works in lieu of cash, but it was a developer contribution in the form of capital works. And in a developer contribution for an overall outline development plan or for an overall urban development area, I do not believe that there is that ability to be able to then seek money back from a later subdivider because it's undertaken as part of a developer contribution or infrastructure works as a whole."

55 Ms Butterworth gave her evidence before a court examiner on 22 July 2010 before the commencement of the trial.

56 Mr Milward is a qualified engineer. He has considerable experience in civil engineering works. He worked for a lengthy period of time in local government before retiring in 2005. During the period 1998 to 2005 Mr Milward was employed by the Shire as "Executive Manager, Engineering Services" and was a member of the Shire's senior management team. His role was to manage and oversee the construction of all roads and drainage infrastructure, parks infrastructure and private subdivisional work carried out in the Shire. In his role, he was responsible for the preparation of all reports related to engineering operations and their presentation to council.

57 Mr Milward gave evidence about the U7 area and the Shire's role in the approvals process for its subdivision by the various landowners. Understandably given the lapse of time since his retirement, his recollection of the detail was refreshed by reviewing the relevant documentation.

58 Mr Milward was unsure who prepared the initial schedule of landowner percentage contributions but was certain the Shire prepared the indentified infrastructure works set out in the schedule. His evidence was that these works were considered necessary for the area as a whole in order to support the development that would occur following the proposed subdivision of the various landholdings within the U7 area.

59 Mr Milward's evidence was that he was involved in the preparation of the schedule of owner contributions dated 16 August 2001 for the U7 area. The cost estimates were determined by the Shire's engineering services department. He said the schedule was prepared to indicate to subdividers the estimated cost of their contribution obligation to the infrastructure works necessary for the U7 area. Mr Milward confirmed that the schedule included landowners in AA1 and AA2 and that the works did not in every case directly abut each landowners' property. The schedule stated:

"The attached spreadsheet details contributions to be made by developers when the lots are subdivided, for the widening of Berkshire Rd between Apricot St and Roe H'way and the construction of a 2 lane roundabout at the intersection of Berkshire Rd and Apricot St.

Developers will also be responsible for widening Berkshire Rd in front of their lot (east of Apricot) and upgrading Apricot or Sultana Rd East where they abut a property."

60 Mr Milward recalled a meeting in his office with Mr McKellar on 10 December 2002. He did not have a total recollection of the discussions but said it was about the manner in which the plaintiff would conduct its development of Lot 2. The discussion concerned in particular that the plaintiff wanted to complete the upgrade construction of the second-half of Apricot Street (which adjoined Lot 2) for the purpose of the commercial presentation of its newly created lots. Mr Milward said the plaintiff wanted to assume responsibility for completing the works to that portion of Apricot Street which abutted Lot 2 (the plaintiff's property) and Lot 504 (the defendant's property). Before this time, this work and the costs associated with the work, had been identified in the contribution schedules as a cost to be shared equally between the AA1 and AA2 owners.

61 Mr Milward, on behalf of the Shire, was open to the plaintiff's request. He was conscious that in order to facilitate the timing of its subdivision the owner of Lot 537 (which abutted another part of Apricot Street) had already upgraded that portion of the street abutting its property.

62 After further negotiations with Mr McKellar on behalf of the plaintiff, Mr Milward said that an agreement was reached with the plaintiff as to the works it would undertake and the way in which its contribution obligations to the U7 area would be adjusted in order to meet the obligation.

63 In this regard, Mr Milward accepted that he would have received Mr McKellar's letters of 10 and 13 December 2002 (identical except the second letter included the addition of par 5.3) and thereafter he wrote to Mr McKellar and the affected landowners in AA2 (because of the plaintiff's proposal to undertake the works in Apricot Street that abutted the defendant's property), to see if there was any objection and also to provide them with updated contribution schedules to explain how the 'knock-on effect' of the plaintiff's proposal would cause the owners financial contributions to be re-allocated to meet the cost of the other works in the U7 area.

64 Mr Milward said that the net effect of the amendments to the contribution schedules was "zero" insofar as the AA1 and AA2 owners were concerned because the financial contribution did not change. The effect was that the defendant's identified contribution for the works necessary to Apricot Street was still required to be paid. However, on behalf of the owners in AA1 and AA2, the council would on receipt of these funds use the funds to pay for the works to Berkshire Road. It is noted incidentally that Berkshire Road did not abut the defendant's property. This was a direct result of the Shire agreeing to allow the plaintiff to undertake the works to Apricot Street.

65 The plaintiff's proposal, and the need to put into place the plaintiff's request in the context of the contribution schedules, had to be disclosed to the affected owners of the U7 area. Accordingly, Mr Milward wrote to them by letter dated 17 December 2002. The letter provided:

"Dear Sir/Madam

FORRESTFIELD U7 AGREEMENT AREA 2 - CONTRIBUTIONS

In accordance with Department for Planning and Infrastructure and Shire of Kalamunda requirements, shown on the attached Table 1, are to be made by sub-dividers of the lots listed, for the upgrading of Berkshire Road and Apricot Street.

It appears that the subdivision of Agreement Area 1, to the west of Apricot Street will be completed ahead of Area 2. To facilitate the sub-division of Area 1, it is preferable to concurrently complete the upgrading of Apricot Street, to Sultana Road East. The developer of Area 1, has indicated a willingness to complete the upgrade of the roadworks required for Apricot Street, on the basis that his cash contribution towards his share of the upgrade of Berkshire Road, between Roe Highway and Apricot Street, is reduced by the value of the works necessary in Apricot Street. Instead therefore, of contributing $170,000 towards the Berkshire Road upgrade, the developer will upgrade Apricot Street and pay a contribution of $35,000, being the difference in the estimated cost of Berkshire Road and Apricot Street (see Tables 3 & 4).

If Area 1 works proceed on the basis of the above, there will be no obligation upon Area 2 owners to upgrade Apricot Street, but in exchange they will be asked to contribute an additional cash amount totalling $135,000 towards the upgrade of Berkshire Road, between Roe Highway and Apricot Street, and the construction of the roundabout at Berkshire Road and Apricot Street.

The amended contribution requirements would be as shown on the attached Table 2, entitled 'Forrestfield U7 Agreement Area 2 Contributions Amended Requirements'.

To ensure that all owners and possible future owners within Area 2, have an understanding of their contribution obligations, your agreement is sought to formalise the amended contributions as detailed above.

I would like to seek Council concurrence of these amendments, therefore your indication of agreement or otherwise before 14 February 2003, would be appreciated.

If you have any queries regarding this matter, please do not hesitate to give me a call.

Yours faithfully

Graham Milward

EXECUTIVE MANAGER ENGINEERING SERVICES."

66 Mr Milward said he received no objection to the proposal in his letter, and none from Mr McKellar that the plaintiff reserved the right to recover a contribution from the defendant for the Apricot Street works. Accordingly, he referred the matter to council to formalise the position. The council's minutes of its meeting on 7 April 2003 record that the recommendation was carried unanimously. The minutes, in part, state:

"8. The proposals to change the utilisation of the contributions paid by developers in Area 2, has been submitted to all landowners, and their comments have been sought. No comment has been received and they have been advised further that the matter will be considered by the General Services Committee in April.

If the provisions relating to the contributions, payable by the developers of Areas 1 & 2, are changed by the Council, approval for the changes will also be required from the West Australian Planning Commission.

COMMITTEE RECOMMENDATION TO COUNCIL GS 36/2003

That the allocation of developer contributions for Agreement Areas 1 & 2, in the Forrestfield U7 Development, be amended to those shown at (Attachments 4 & 5.) on the basis that it is anticipated that the developers in Area 1 will reconstruct the full length of Apricot Street.
That in the event of developers in Areas 1 & 2, both completing portions of the upgrade of Apricot Street, developer contributions re-allocated to reflect the extent of work undertaken by each.
That the approval of the West Australian Planning Commission be sought for the amended usage of developer contributions."

67 Mr Milward expressed the opinion that the plaintiff's construction of a water main and sewer main fronting its properties in Apricot Street to service those properties is not part of the road construction. He said their installation was necessary in order for the plaintiff to comply with a condition imposed by the Water Corporation on the plaintiff's subdivision. In his view, the construction of the water and sewer mains by the plaintiff was an entirely separate matter from the provision of a road. He opined that the installation of empty pipes for future services under a road at the time of the construction of the road was a situation where he considered the duct work would form part of the road construction. The plaintiff's construction of the water main and sewer main was not, in his opinion, a duct forming part of the road construction. This of course is a question for the court to determine, and Mr Milward's opinion is irrelevant.

68 In cross-examination Mr Milward said he was not aware of Planning Bulletin No 18 dated February 1997 concerning developer contributions for infrastructure (which has since been superseded). In cross-examination, Mr Milward was unable to be specific as to whether all or which landowners had been provided with the contribution schedules at the different times. He was unaware whether all the infrastructure works identified in the schedules had been completed. However, at the time of his retirement in 2005 he said they had not all been performed.

69 In cross-examination, Mr Milward agreed that the contribution schedule which identified "half cost upgrading Apricot Street adjacent to Agreement Area 1" contained a budget for pavement and drainage works only. He agreed it did not include the Water Corporation works for sewers and water mains. Mr Milward said this was completely outside his role and, in effect, a matter for the Water Corporation and the landowner.

70 In cross-examination Mr Milward was taken to Mr McKellar's letter to the Shire dated 10 December 2002 which followed their meeting on the same day. As mentioned, a further version of the letter dated 13 December 2002 was sent by Mr McKellar, the only difference being the inclusion of par 5.3. Nothing substantive to the determination of the issues in this trial arises from the difference between the letters. Importantly, in cross-examination Mr Milward did not accept that Mr McKellar's letter of 10 December 2002 was an entirely accurate record of their discussions. In particular, he had no recollection of Mr McKellar referring to s 28 of the Town Planning and Development Act 1928, but said that if Mr McKellar had he would have made it plain to him that it did not apply. His evidence was:

"If he had referred to it, I would have made it clear to him that in this circumstance that didn't apply because of the contributions which everybody was making to the infrastructure costs for U7." (T165)

71 It was put to Mr Milward in cross-examination that Mr McKellar had said to him at the meeting that the plaintiff would recover 50 per cent of the upgrade of Apricot Street from the defendant under s 28A of the Act, unless the council assisted in obtaining a reimbursement for the plaintiff of the costs through the contribution scheme. Mr Milward did not accept this contention and maintained that at the time he was fully aware that all of the contributions that would be made by the developers were required to ensure that everybody made a fair and equitable contribution to each portion of the necessary infrastructure upgrade for U7 (even if it did not directly abut the owners' landholding). Mr Milward did not accept, that in the meeting with Mr McKellar, he indicated he had no problem with the plaintiff recovering one-half of the Apricot Street works under the Act.

72 In relation to par 8 of Mr McKellar's letter, Mr Milward said he knew the proprietors of the land to the east of Apricot Street were going to contribute so he saw no need to respond. He knew that the contributions were going to be made because the works were already provided for in the contribution schedules. Mr Milward indicated that, in a sense, he did respond by his letter of 17 December 2002 which was sent to the plaintiff (to which he received no response from Mr McKellar).

73 In cross-examination, Mr Milward explained that the contribution schedule for AA2 required the payment of about $500,000 and of that sum $135,000 was required as "their contribution towards the upgrading of Apricot Street" and, that because the plaintiff requested to do that work (and did it), that money (still required to be paid) would be used by the Shire to pay for the identified works required to Berkshire Road. He said the reallocation in effect meant that the plaintiff did not need to contribute to Berkshire Road because it had in effect contributed to Apricot Street more than its contribution share required for that particular work.

74 In response to a question from me, Mr Milward confirmed that the plaintiff, having constructed the upgrade to the portion of Apricot Street, was not therefore required to give the Shire a cash contribution for this work. Accordingly, the plaintiff's cash contribution was reduced to $35,000 in recognition that it had contributed in kind by accepting responsibility for completing the upgrade to Apricot Street. Mr Milward accepted that there was, in effect, a set-off between the plaintiff's financial contribution as a result of its contribution in kind. In my view, the practical and legal effect of this evidence, is that the Shire was acting as an agent for the plaintiff in ensuring that the defendant contributed to the cost of the upgrade to Apricot Street (which was a part only of all the infrastructure works necessary).

75 Ms May is a qualified town planner and worked as a planning officer at the Department for Planning and Infrastructure between 1999 and 2003. She said the Department for Planning and Infrastructure is the advisory body to the WAPC (a statutory body) which makes the decisions under the Act.

76 Ms May said as a planning officer of the Department her role included the task of assessing and making recommendations on applications for subdivision approval, amendments to town planning schemes and structure plans. She said the WAPC is the statutory decision-making authority in relation to applications for subdivision of land. The local authority is a "referral authority" which provides comments for the consideration of the WAPC.

77 Ms May's evidence was that a structure plan is a guiding document which outlines land uses, road networks and other matters to inform and guide decision-making on subdivision applications. She said that an outline development plan is one form of a structure plan that provides the framework for determining land use, subdivision applications and development applications in the relevant area.

78 Ms May, in the course of her work, recalled dealing with Ms Butterworth in relation to the plaintiff's applications for subdivision the subject of this action. The purpose of those discussions was to set the conditions for the approval of the subdivisions. Ms May had a recollection of attending a meeting with Mr McKellar and Ms Butterworth on 22 November 2002, but did not have a specific recollection of the content of the meeting. Ms May refreshed her memory from the documents and said she would have been aware of the contribution schedule at the time and that the table formed a part of the outline development plan. As a result she said:

"In the determination of subdivision applications, we had regard for the content of the outline development plan, and the infrastructure contributions table." (T209)

79 She said that the requirement of the owner to contribute to the cost of infrastructure works relevant to the subdivision was imposed as a condition of the approval by reference to the infrastructure contributions table.

80 Ms May was shown her email dated 13 January 2003 which contained draft conditions for the plaintiff's subdivisions. The draft condition were intended to reflect the basis of the agreement reached between the plaintiff and the Shire at that point in time with respect, in particular, to the plaintiff's obligations under the contribution schedule.

81 Ms May said that she did not have delegated authority to determine outline development plans but that she understood her manager and the Statutory Planning Committee of the WAPC did.

82 The defendant's final witness was Mr Gosatti. He is a director and shareholder of the defendant, which he described as a property development company. He is also a director of a civil contracting company. He has a Bachelor of Business degree with a major in accounting.

83 Mr Gosatti said the defendant had been involved in land development for about 12 years and that for the six years prior to this he had been involved in a similar family business. All of the defendant's subdivisions have been in respect of vacant land in the Perth metropolitan area. Over the last six years, he estimated that the defendant had been involved in the subdivision of about 150 - 250 lots per year. The plaintiff and the defendant are competitors in the business of land subdivision.

84 Mr Gosatti said, prior to the defendant purchasing Lot 504 (later Lot 540) from Mr and Mrs van der Kooy in March 2004, the defendant had no interest in AA1 or AA2.

85 As part of the defendant's due diligence in 2004, before purchasing Lot 504, Mr Gosatti received from the previous owners (Mr and Mrs van der Kooy) a copy of Mr Milward's letter dated 17 December 2002. Mr Gosatti considered that the letter indicated that the Shire proposed to use his contribution for changing Apricot Street in a different part of U7, but that the contribution was still required and of the same value. He said at the time he became interested in the property, the upgrade to Apricot Street that affected AA2 was nearly complete.

86 Mr Gosatti also said that he received, as part of the defendant's due diligence, the Planning Commission's letter of approval of subdivision of Lot 504 dated 9 July 2003. The approval was subject to Condition 2 which provided:

"2. Contributions being made for the provision of infrastructure for the U7 Agreement Area 2 as endorsed by the Western Australian Planning Commission on 25 March 2003 to the satisfaction of the Western Australian Planning Commission. (LG)"

87 It is common ground that the reference to 25 March 2003 is intended to refer to the Planning Commission's approval of a modification to the outline development plan for U7 Agreement Area 2 dated 31 March 2003. The second condition of this approval required the incorporation of:

"... a development contribution schedule including contributions for each landowner on a proportional lane area basis for the upgrading of Berkshire Road (including a dual-use path) to a 4 land divided carriageway between Apricot Street and Roe Highway, upgrading (widening of road pavement) of Berkshire Road between Apricot Street north-west side of Forrestfield Senior High School, upgrading of Apricot Street and Sultana Road East adjacent to Agreement Area 2, and the construction of a roundabout at the intersection of Berkshire Road and Apricot Street."

88 Mr Gosatti confirmed that the WAPC approval for the subdivision of Lot 504 dated 9 July 2003 also contained conditions requiring the defendant to obtain certification from the Water Corporation that arrangements had been made with that body to connect to a water supply and a sewerage supply service to be available to the lots proposed by the application (Conditions 17 and 18).

89 Mr Gosatti gave evidence that, as part of the conditions imposed by the subdivision approval for Lot 504, the defendant paid to the Shire the sum of $39,700 in accordance with the contribution schedule.

90 With respect to the satisfaction of the Water Corporation's conditions concerning water supply and sewerage supply services for the defendant's subdivision lots, Mr Gosatti said that the defendant used a micro-tunnelling machine to obtain access to the Water Corporation's water and sewer mains on the plaintiff's side of Apricot Street because (obviously) the council would not permit the road pavement to be dug up for this purpose. The defendant was not "allowed to touch the bitumen". Having drilled under the road, the PVC pipe installed for the carriage of the water and sewer service was connected (after payment of a fee) to the existing mains by employees and contractors of the Water Corporation. The defendant was not permitted to do this work.

91 Mr Gosatti said that on no prior occasion had the defendant been the subject of a claim by another property owner as a result of connecting to water or sewer reticulation. In his experience, empty ducts (pipes) are sometimes installed at intersections when constructing new roads for future services to be connected through and that lines parallel to the road do not have any connection to the road (which of course is a matter of statutory construction for the Court).

92 The evidence of all the witnesses was informed by the relevant documents created at the time. Understandably, because of the passage of time, the witnesses did not have a detailed recollection of all aspects of the relevant discussions and communications. However the document trail is sufficient to enable a clear understanding of what occurred, and when, in relation to the factual matters the subject of the plaintiff's claim.

93 The only conflict in the oral evidence concerns the plaintiff's contention that the Shire, as part of the adjustment of the contribution schedules in 2002 and 2003, agreed that the plaintiff could recover one-half of the cost of its expenditure on the portion of Apricot Street adjoining the defendant's property. The resolution of this issue is informed primarily by the content of the relevant documentation, the context in which the contribution schedules were amended and the conduct of the parties (or, more accurately in the case of the plaintiff the lack of conduct).

94 Before considering the legal issues raised by the plaintiff's claim I make the following findings of fact in addition to the findings already made.

95 The relevant subdivisions of land of the plaintiff and the defendant the subject of this action fall within the Shire of Kalamunda's District Planning Scheme No 2 (as amended). The land is within an urban development zone which was designated "Urban Cell 7". U7 is in turn divided into separate areas which were designated according to the likely timing of their development. These areas included AA1 within which the land the subject of the plaintiff's subdivision applications is located. Agreement Area 2 contained the land which was the subject of the defendant's subdivision applications.

96 The Shire of Kalamunda District Planning Scheme No 2 provided pursuant to cl 6.13 that land within the urban development zone would be "progressively developed for residential purposes and for commercial and other uses normally associated with residential development". Clause 6.13 provided that, before the granting or obtaining of a recommendation for approval for any development within the zone that involved subdivision, council required the submission of an outline development plan for the whole of the urban development zone. Accordingly, it was a condition precedent of the Scheme that the council consider and approve the outline development plan before a grant of subdivision approval could be obtained from the WAPC.

97 The Scheme provided for a process of advertisement and consultation. The Scheme also provided for provision to the WAPC of the outline development plan including any objections and for a request that the WAPC adopt the plan submitted "as the basis for approval of subdivision and development applications within the area covered by the plan" (cl 6.13(f)).

98 On 15 February 1999, the Council of the Shire of Kalamunda resolved to adopt and to forward to the WAPC outline development plan U7 for Agreement Area 1 (the land bounded by Roe Highway, Apricot Street, Sultana Road East and Berkshire Road, Forrestfield). The Shire requested approval for the ODP for AA1 subject to four conditions.

99 By letter dated 28 April 1999 the WAPC resolved to adopt the Outline development plan for Urban Cell 7 - Agreement Area 1 "as the basis for its consideration of subdivision applications within the area covered by the plan" subject to conditions. Condition 2 provided that:

"Prior to the determination of subdivision applications, satisfactory agreements for equitable developer contributions should be in place for public open space, construction of drainage within the public open space, landscaping and management of the public open space and for the upgrading of Berkshire Road and Apricot Street."

100 On 29 July 1999 the WAPC resolved to adopt a modification to the ODP for U7 - AA1 conditionally and the method of determining infrastructure contributions for AA1 as set out in attachment 2. Attachment 2 headed "Infrastructure Contributions: U7 Agreement Area 1" identified, in general terms, six separate matters concerning infrastructure requirements and upgrades necessary within U7 to support the proposed subdivision of the land in AA1. The schedule attributed a percentage of required contribution to the four then existing landholdings namely Lot 537, Lot 538, Lot 539 and Lot 2 (the last three ultimately being the subject of subdivision by the plaintiff). The schedule is attached below.

101 The identified infrastructure necessary to support the proposed subdivision of the land in AA1 includes an owners contribution for upgrading roads not immediately adjacent to their landholding and, relevantly for the present action, between them a 100 per cent contribution to half the cost of upgrading the portion of Apricot Street adjacent to AA1. At this time, the estimated cost of the infrastructure works had not been determined and therefore the actual financial contribution allocated in accordance with the designated owner obligations.

102 In this regard, irrespective of whether the outline development plan is prepared by the proponent landholder or somebody else, it is the fact that the preparation and approval of an outline development plan is required before there can be a lawful grant of a subdivision approval under the Scheme. I do not, with respect, accept the plaintiff's submission that merely because a specified item in cl 6.13(b) of the planning scheme is not identified in the plan, that the outline development plan is in some way null and void and that all of the subsequent decision-making and conduct by owners after its purported adoption is beyond power and unlawful.

103 On 20 September 1999, the council of the Shire adopted an outline development plan for U7 Agreement Area 2 (the land bound by Sultana Road East, Apricot Street, Berkshire Road and Western Power easement, Forrestfield). The ODP for AA2 was adopted by the WAPC by letter dated 24 December 1999 as the basis upon which it agreed to consider subdivision applications within AA2 subject to various conditions which included a requirement that:

"Prior to the approval of subdivision applications for the land, satisfactory agreements for equitable developer contributions should be in place for public open space, construction of drainage within the public open space, landscaping and revegetation of the creek line (for drainage purposes) and for the upgrading of Berkshire Road, Sultana Road and Apricot Street." (Condition 2)

104 Condition 3 provided that the developer contributions to include 100 per cent of the cost of upgrading that portion of Berkshire Road adjacent to AA2 (widening of road pavement) and 50 per cent of the cost of upgrading Apricot Street and Sultana Road adjacent to AA2 and 50 per cent of the cost of construction of a roundabout at the intersection of Berkshire Road and Apricot Street. Other specified contributions were identified by Condition 3.

105 The plaintiff subdivided three lots within AA1 being Lots 538, 539 and Lot 2 which comprised 78 per cent of the area of AA1. The defendant subdivided one lot within AA2, being Lot 504. Conditional approval by WAPC to the subdivision of these lots was granted as follows:

Lot 538 - 18 December 2001;
Lot 539 - 21 January 2003;
Lot 2 - 15 May 2003;
Lot 504 - 8 July 2003.

106 The plaintiff was advised by the WAPC by letter dated 19 December 2001 that it would conditionally approve the subdivision of Lot 538. Condition 11 of the approval provided:

"The subdivider shall contribute to infrastructure contributions for the U7 Agreement Area 1 as endorsed by the Western Australian Planning Commission on 29 July 1999 to the satisfaction of the Western Australian Planning Commission."

107 Advice note 5 to the approval related to Condition 11 and provided that the Shire had advised that the infrastructure contribution was for:

"... upgrading/construction of Berkshire Road, the construction of a roundabout at the intersection of Berkshire and Apricot Roads, the upgrading of the dual use paths, the upgrading of Sultana Road and the construction of drainage as outlined in Attachment 'C'."

108 The applicant was advised that its contributions to the infrastructure were required to be satisfied before the Shire issued clearance for the lots. Advice note 5 also included a note that the costing for the roundabout at the intersection of Apricot and Berkshire Road was estimated at $315,000 with a contribution of $22,000 to be paid by the applicant for the subdivision of Lot 538. Advice note 5 referred to attachment C which is the AA1 contribution schedule adopted by the WAPC.

109 The plaintiff appealed the conditions for the subdivision of Lot 538 in the Town Planning Appeal Tribunal but did not appeal Condition 11. Consent orders disposing of the appeal were made by the Town Planning Appeal Tribunal on 30 July 2002 which included Condition 7 which was identical to the original Condition 11.

110 The consent order also replicated Advice note 5 in the approval as Advice note 3 in identical terms.

111 In accordance with the contribution schedules for AA2 the plaintiff, in relation to Lot 538, was required to make a cash contribution of $107,500 towards infrastructure costs as set out in the AA1 contribution table dated 16 July 2002 (which was also provided to the plaintiff under cover of Mr Milward's letter dated 17 December 2002). The plaintiff's contribution for Lot 538 was resolved in December 2002.

112 Ms Butterworth, on behalf of the Shire provided to Mr McKellar on behalf of the plaintiff, the Shire's response to the plaintiff's four subdivision applications concerning Lot 2 and Pt Lot 539 and prepared for the WAPC. The Shire's letters to WAPC record that an ODP was prepared by Gray & Lewis for the entire urban development zone referred to as Urban Cell 7, Forrestfield and that U7 had been divided into separate stages/agreement areas. The Shire's approval to the proposed subdivision applications was conditional on WAPC imposing a condition requiring the plaintiff in each case to contribute to infrastructure contributions for U7 Agreement Area 1 as endorsed by WAPC on 29 July 1999 to the satisfaction of the Shire.

113 On 22 November 2002 Mr McKellar, on behalf of the plaintiff, Ms Butterworth, on behalf of the Shire and Ms May, on behalf of WAPC, met to discuss the approval of the plaintiff's proposed subdivision applications for Lot 2 and Lot 539. On 10 December 2002 Mr McKellar met with Mr Milward, on behalf of the Shire, to discuss the proposed subdivisions and to resolve outstanding issues in relation to Lot 538. Mr McKellar outlined his understanding of the discussions at that meeting in his letter of 10 December 2002 to Mr Milward. The letter was subsequently resent on 13 December 2002 with the addition of par 5.3.

114 Relevant to the plaintiff's claim in this action is the plaintiff's proposal to the Shire in discussions that the plaintiff accept responsibility for undertaking some of the identified infrastructure works required by the contribution schedules and, in particular, to upgrade the portion of Apricot Street between the plaintiff's property and the defendant's property.

115 I do not accept, and find accordingly, that Mr McKellar advised Mr Milward in the course of their discussions and communications that the plaintiff would, if the Shire agreed to the plaintiff undertaking the works in Apricot Street, seek to recover one-half of the cost of that work from the defendant. The plaintiff did not respond to the letter sent by Mr Milward to affected landowners and the plaintiff, with respect to the Shire's decision to reallocate funds received from AA2 contributions for the work undertaken by the plaintiff in Apricot Street to other works on Berkshire Road, which was included in the contribution schedules.

116 In my view, whatever Mr McKellar meant by cl 8 of his letter of 10 December 2002, it was overtaken by the plaintiff's acquiescence and non-objection to the proposal by Mr Milward on behalf of the Shire in his letter of 17 December 2002. By that letter, the Shire sought from the plaintiff, inter alia, agreement "to formalise the amended contributions" in the way set out in the letter, the effect of which was to permit the plaintiff to undertake the upgrade of Apricot Street and to off-set the cost of doing so from its contribution burden in the schedule. Therefore, the plaintiff's cash contribution was reduced to $35,000 on the basis its would be relieved of making any further cash contributions to the AA1 scheme for inter alia Lot 538.

117 As explained by Mr Milward in his letter the Shire, by adopting this course of action, did not release the defendant from contributing its identified share in the schedule towards the upgrade of Apricot Street. The amount of the defendant's contribution as prescribed by the AA2 contribution schedule was at all material times $39,700. The total payments due under that schedule from contributors were the same before and after accommodating the request of the plaintiff, namely a total of $498,300. Having levied the defendant for its contribution in accordance with the schedule, the Shire, on behalf of the owners, reallocated the AA2 contributions to the Berkshire Road works. This was because the plaintiff had, in satisfaction of its cash contribution, agreed to undertake the upgrade to Apricot Street adjacent to AA2 (which had a value of $135,000 in the schedule).

118 The applications for subdivision of Lot 2 and Lot 539 were lodged by the plaintiff in November and August 2002. It was recognised at the time that some of the works the subject of AA1 infrastructure contributions were works that were required in order for the subdivisions to proceed. I find that it was agreed between the Shire and the plaintiff that the Shire would reduce the plaintiff's cash contribution under the AA1 schedule to $35,000, thereby relieving the plaintiff of any further cash contributions for Lots 538, 539 and Lot 2. This position was a direct result of the Shire permitting the plaintiff, at its request, to affect the upgrade of Apricot Street to its full width where it fronted Lot 2, to upgrade Sultana Road to its full width where it fronted Lot 2, and to construct the drainage basin within Lot 539 and Lot 2.

119 As mentioned, in order to give effect to the plaintiff's request and the agreement negotiated with the Shire with respect to its contribution, it was necessary for the contribution schedules to be adjusted. In this regard, the 50 per cent upgrade of Apricot Street ($135,000) was deducted from AA2 and added to AA1. By way of offset, the sum of $135,000 for the Berkshire Road upgrade was deducted from AA1 and added to AA2.

120 As a result of the agreement between the plaintiff and the Shire, the WAPC subdivision conditions for Lot 539 and Lot 2 therefore did not require the condition concerning infrastructure contributions. Instead, the conditions required provision to compel the plaintiff and the Shire to enter into a legal agreement to require the plaintiff to undertake the agreed infrastructure works as part of the staged subdivision of the area. The agreement between the plaintiff and the Shire in this regard was reflected in the conditions which the WAPC attached to its approval of the subdivision of Lot 539 (Conditions 9 and 10) and Lot 2 (Conditions 11, 13 and 14).

121 The legal agreement required by the condition was entered into between the plaintiff and the Shire on 8 August 2003. Recital H and Recital I refer to the background to the agreement recorded in the deed between the parties. Clause 11 of the agreement provided that, upon payment of $35,000 by the plaintiff to the Shire, the Shire could expend the money "on such upgrading works on local roads and local road drainage as the Shire thinks fit".

122 Mr McKellar maintained in his evidence that the deed did not record that part of the agreement between the Shire and the plaintiff which, he says, in effect permitted the plaintiff to recover from the defendant one-half of the costs for its expenditure on the Apricot Street upgrade. Mr McKellar maintained that the plaintiff did not thereby agree to contribute in accordance with the contribution schedules for the outline development plan. With respect, both these contentions are rejected. This was not the effect of the evidence when considered in its background and the circumstances which gave rise to the deed. It is also not, in my opinion, consistent with Recital H which merely records that the plaintiff and the Shire disagreed as to the quantum of, and requirement to, contribute to infrastructure works in the area of the structure plan. It does not expressly record a rejection by the plaintiff of the underlying premise and operation of the contribution schedules as part of the outline development plan.

123 In my view, the plaintiff at all material times negotiated within the framework of the contribution schedules. The resultant agreement with the Shire, with respect to its contribution, did not result in any diminution in monetary value of its required contribution or the required contribution of other landowners.

124 Pursuant to the contribution schedule for AA2, the defendant remained at all material times liable to contribute $39,700, which it did in the discharge of its obligation to make infrastructure contributions pursuant to the outline development plan for U7.

125 In my view, it is immaterial that the Shire, instead of receiving a cash contribution from AA1 and AA2 landowners for the upgrade of Apricot Street, agreed to allow the plaintiff to undertake that work and credit the plaintiff with the value of that work. This was done within and 'inside' the original contributions scheme that applied. At all material times the defendant was obliged by the contribution schedules to contribute to the upgrade of Apricot Street. When the obligation was imposed as a WAPC condition for subdivision of land in U7 Areas 1 and 2, the nature of the contribution crystallised. The attribution of cost by the Shire at a later time to the works, at that time crystallised the defendant's contribution in monetary terms for the upgrade of Apricot Street. On both occasions there was no objection by the plaintiff to the contribution schedule procedure utilised by the Shire as part of the outline development plan necessary as a precondition to the right of any subdivision of land within the affected area.

126 Condition 2 of the defendant's approval to subdivide Lot 504 required the defendant to contribute to the provision of infrastructure for the U7 Agreement Area 2, as endorsed by the WAPC on 31 March 2003. The defendant made the required contribution in the sum of $39,700.

127 The plaintiff relies on s 159 of the Planning and Development Act 2005 to claim from the defendant, one-half of the costs that it says it contributed or bore in respect of upgrading the road pavement, kerbing and associated drainage of a portion of Apricot Street between the plaintiff's property and the defendant's property. In the alternative, the plaintiff seeks to recover a portion of the costs incurred which relate to the provision of "service ducts" in connection with the road.

128 For the purpose of the trial, the parties agreed the reasonable costs incurred by the plaintiff in effecting the works to the relevant portion of Apricot Street, and therefore the amount recoverable from the defendant if successful. The agreed figures for the purpose of par 5 and par 7 of the statement of claim are $24,225.25 and $72,882.95 (the total, if the plaintiff is successful on all claims is $97,108.20). In the alternative, the parties agreed that, if the plaintiff is successful only on the issue of service ducts, the figure for pars 5 and 7 for the reasonable costs incurred is $8,857.34 and $24,149.49, a total of $33,006.83. Finally, in the event the plaintiff is unsuccessful on the service ducts claim but successful for the main claim, the agreed figures for pars 5 and 7 are $15,367.91 and $50,727.46, a total of $66,095.37. These figures represent one-half of the costs that would be payable under s 159, if the plaintiff's claim was successful on the basis stated but do not include escalation and interest.

129 Section 159 of the Act provides:

"159. Subdivider may recover portion of road costs from subsequent subdivider

(a) a person (in this section called the later subdivider) has subdivided land in which -

(i) a lot or lots has or have a common boundary with; or

an existing road to which there is access from the subdivided land;

(b) a person (in this section called the original subdivider) who previously subdivided land that also has a common boundary with that existing road, in connection with that subdivision, contributed to or bore solely the cost of providing or upgrading the existing road; and

the original subdivider may, in accordance with this Division, recover from the later subdivider a sum representing one-half of so much of the reasonable cost as was borne by the original subdivider of providing or upgrading the part of the existing road which has a common boundary with the lot or lots, or is joined by a subdivisional road, as referred to in paragraph (a).

CPI means the Table described as the Consumer Price Index (All Groups Index) for Perth published by the Commonwealth Statistician under the Census and Statistics Act 1905 of the Commonwealth, or if the same is not published, such other similar index as the Minister may reasonably determine;

market value of land means the capital sum, determined in accordance with section 155(3)(b)(ii), (iii) and (iv), which an unencumbered estate in fee simple in the land might reasonably be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require;

road has the meaning given by section 4(1) and includes a private road created under Part IVA of the Transfer of Land Act 1893 or as defined in the Land Administration Act 1997 section 3(1).

(3) In this section a reference to the cost of providing a road is a reference to the aggregate of -

(a) the value, as at the date of the subdivision referred to in subsection (1)(b), of the portion of the land provided as a road, being such percentage of the market value of the total area of land comprised in that subdivision as the area of the road bears to that total area as at the date of that subdivision; and

(b) the reasonable cost of designing and carrying out the following works -

(ii) the formation, preparation, priming and sealing of the road; and

(iii) the provision of kerbing, drainage and service ducts in connection with the road,

escalated by the percentage by which the CPI last published prior to the date of the subsequent subdivision has increased over the CPI last published prior to the original subdivider subdividing the land referred to in subsection (1)(b)."

130 It is common ground that the defendant is a "later subdivider" for the purposes of the section. It is also accepted that the plaintiff, for the purposes of the claim, contributed to or bore solely the cost of actually providing the upgrade to Apricot Street.

131 The issue for determination in this trial is whether the defendant as a "later subdivider" contributed to the cost of the upgrade of Apricot Street. The plaintiff says the defendant did not contribute to the cost and the defendant says that it did contribute to the cost by payment of its contribution costs in accordance with the contributions scheme for the U7 area and, in particular, as a landholder in AA2.

132 If the defendant did not contribute to the cost of the relevant infrastructure works then the plaintiff would be entitled to recover one-half of the reasonable costs incurred in undertaking the works (this is if it is accepted that the way in which the plaintiff met its contribution obligations constituted it contributing to or bearing solely the cost of providing the upgrade). It is common ground that the plaintiff's claim is limited to that part of Apricot Street which has a common boundary with the parties' respective lots.

133 As mentioned, the plaintiff's claim is, in effect, in respect of two discrete areas of cost incurred in the works undertaken in Apricot Street. The first part relates to the cost incurred in the provision of road drainage, pavement and kerbing. The second part relates to the provision of the water and sewer mains (within the road reserve) on the plaintiff's side of Apricot Street on the basis that this infrastructure is "service ducts in connection with the road" as provided for by s 159(3)(b)(iii) of the Act.

134 The issue for determination is whether the defendant as a later subdivider for the purposes of s 159 of the Act, contributed to the cost of the upgrade of the relevant portion of Apricot Street. The second issue requires, if the defendant is held not to have contributed to the relevant cost, the Court to determine whether the plaintiff's costs in the installation of the water and sewerage mains is a "service duct in connection with the road" for the purpose of determining the costs of providing the road.

Did the defendant contribute to the cost of the upgrade of Apricot Street?

135 The defendant contends that a determination of the plaintiff's claim must involve a full consideration of the context and background in which owners in AA1 and AA2 contributed to the necessary infrastructure upgrades as a condition of their respective subdivision approvals.

136 The defendant relies upon the purpose of requiring an outline development plan, namely for the orderly and most efficient means of development of land proposed to be subdivided for urban use. The defendant contends that the outline development plan (or structure plan) has force and effect under the local scheme. The defendant considers it provides a template to guide owners of land within the area as to what type of development may be permitted or approved, and collectively and individually, what obligations may be attached by WAPC (on recommendation from the Shire) to any proposed subdivision.

137 It is the case that WAPC is the statutory authority which has the power to approve the subdivision of land and not the Shire itself: s 135 of the Act. In this regard, the defendant says the Shire's town planning scheme required WAPC to adopt the proposed outline development plan. The trial itself did not concern the relevant statutory provisions in relation to the powers of WAPC and the Shire but, from a practical viewpoint, it is obvious that if WAPC is the granting authority of subdivisional approval, then it would follow that it must consider and adopt the relevant outline development plan for the area proposed to be subdivided for urban use.

138 It is the fact in this case that WAPC did purport to adopt the relevant outline development plans for AA1 and AA2. By doing so, it signalled that these were to be the template for its consideration of future subdivision applications in U7. It is the case that, to the extent an applicant for subdivision disagreed with any proposed condition to be imposed by WAPC, it could put the matter in issue by exercising its right of appeal to the Town Planning Appeal Tribunal. In my view, it is important in this case that even though the plaintiff in respect of its application for subdivision of Lot 538 did lodge such an appeal to the Tribunal, it did not seek to disturb or upset the conditions proposed by WAPC in relation to the contribution schedules based on the adoption by the WAPC of the relevant outline development plans.

139 In the course of the trial, a matter which was referred to as a "pleading issue" arose concerning the extent to which the plaintiff contended that the conduct of the Shire and the WAPC was beyond power insofar as it related to their respective approvals and adoption of the outline development plan and contribution schedules. All of the evidence at the trial was conducted on the basis that the lawfulness of actions of the WAPC and the Shire in the course of considering the plaintiff and defendant's applications for subdivision was not in issue. As indicated in the course of submissions, and as I think counsel for the plaintiff accepted, the defendant certainly did not conduct its defence on the basis that it understood from the pleadings that the plaintiff's case was predicated on an assumption that the WAPC and the Shire did not have any power and were acting unlawfully in the steps they took to adopt the outline development plan. This is in part because of the admissions made by the plaintiff in the pleadings. In my view, there was no joinder of issue at the trial of this fundamental jurisdictional question, which might have been heard as a preliminary issue.

140 It is clear from the evidence that the plaintiff itself at all material times conducted its affairs and negotiated on the basis that the steps taken by the WAPC and the Shire defined the framework within which it sought to negotiate the extent of its contributions to the required infrastructure upgrades for U7. Accordingly, for the purpose of resolving the plaintiff's statutory claim based on s 159 of the Act, it is not necessary to determine whether the WAPC or the Shire were acting beyond power (and therefore unlawfully) in their relevant actions which are the subject of this action.

141 A difficulty with the plaintiff's submissions, in my view, is that it is premised on the contention that the ODP itself, by reason of its approval and adoption by WAPC, imposed some legal obligation in its own right on subdivision applicants to make contributions. With respect, I agree with the defendant's submission that the outline development plan is just a template to guide decision-making for the future development of land. It is the imposition of the condition on the subdivision application by the WAPC which is the source of the obligation on the landholder to make the specified contributions to the infrastructure necessary in the area.

142 It is perfectly permissible for a contribution schedule under an ODP to include infrastructure works which are not immediately adjacent to an applicant's landholding but which is within the area of the ODP (as in this case). In my opinion the legal obligation to contribute to the infrastructure contributions for the U7 area on the basis endorsed by the Commission on 29 July 1999 arises from the statutory power of the WAPC to impose conditions on an applicant for subdivision, and not from the ODP itself or from its earlier approval by the WAPC or the Council.

143 In this case, the plaintiff did not exercise its right to appeal against the relevant condition imposed by the WAPC on its subdivision applications. Instead, as I have found, it conducted its negotiations with the WAPC and the Shire on the basis that the conditions circumscribed its obligation to make infrastructure contributions. In fact, it made contributions on the basis of the parameters set by the identified contributions to the work set out in the schedules. In this regard, it is relevant to note that some of the infrastructure works necessary and to which the plaintiff and the defendant both contributed did not concern land immediately abutting or adjacent to their property but involved works necessary in other parts of the agreement area. This is not a case where the WAPC or the Shire has attempted at a later point in time to "change the goal posts" set out in the contribution schedules, either as to the works to be done or the costs of the works. Instead, in my view, it is an attempt by the plaintiff to change the rules of the game after the final siren and after the spectators have gone home.

144 It is obviously relevant that the works identified by AA1 and AA2 contribution schedules included the necessity to upgrade Apricot Street (the cost of which forms the alleged basis of the plaintiff's claim) and that the schedules apportioned responsibility for the costs associated with this work between the landholders in AA1 and AA2. The contribution prescribed by the schedule adopted by the WAPC and the Shire for the purpose of U7 required owners to make a contribution based upon a formula that their area of land had as a percentage to the whole of the area, being AA1 and AA2.

145 In my view it is the case that Condition 7 of the consent order concerning the plaintiff's subdivision of Lot 538 did require the plaintiff to make a contribution in relation to the upgrading of Apricot Street because it was required to contribute proportionally based upon the formula, and this was part of the work at the time that had been identified as necessary. By not seeking to disturb Condition 7 (originally Condition 11 on the proposed conditions of subdivision before the appeal) the plaintiff accepted an obligation to make a contribution in respect of each of the identified items of work. In my opinion, it is not correct to say that because the subdivision approval for Lot 2 and Lot 539 did not contain the same condition as Lot 538 (and the defendant's Lot 504) with respect to the contribution schedule, it does not follow that the plaintiff can invoke s 159 of the Act against the defendant. The legal position must be informed by the factual circumstances at the time.

146 As outlined above on a proper consideration of the facts, in my view it cannot be said that the defendant has not contributed to the cost of the upgrade of Apricot Street which is the subject of the plaintiff's claim.

147 The onus of proof is on the plaintiff to satisfy the Court that the defendant did not contribute to that cost on the balance of probabilities and it has failed to discharge the onus. In my opinion, the proper characterisation of the facts proved by the evidence in this trial, is that the defendant did make a contribution to the cost of the upgrade to Apricot Street by payment of its contribution amount to the Shire ($37,500).

148 For these reasons, I find that the defendant did contribute to the cost of the upgrade of Apricot Street the subject of the plaintiff's claim. Therefore, the plaintiff is not entitled to maintain its claim under s 159 of the Act against the defendant.

149 In my view, any contribution by the defendant is sufficient to displace the operation of the Act and defeat a claim by the plaintiff. The section does not on its proper construction permit a claim to be maintained by the "original subdivider" unless it contributed to or bore solely the cost of providing or upgrading the road, or if the "later subdivider" has made any contribution, no matter how much, to the costs of the road. The plaintiff did not, in my view, on the facts of this case solely provide for the costs of the road. The section does not permit an apportionment of costs if the defendant has in fact made a contribution to the relevant costs of the road. The statutory claim is predicated on the award being "one-half" of the reasonable costs borne by the original subdivider.

150 For the same reasoning, I am satisfied that for the purpose of s 159(1)(b) of the Act, the plaintiff contributed to the upgrade of Apricot Street, in the same way the defendant has. However (and it is not necessary to do so), it is not possible to determine the actual contribution by the plaintiff of the cost of upgrading Apricot Street by reason of the circumstances in which it did so. In other words, the fact that the plaintiff incurred the agreed costs in doing the works, in the context in which it did the works it is not a true measure of the extent of its contribution for the purpose of s 159. This is because it received other benefits to infrastructure upgrades in the area which was the subject of contribution by other landowners.

151 In my view, to allow the plaintiff's claim in the circumstances of this case, would be to permit the plaintiff an element of double recovery against the defendant in circumstances that would be unconscionable in law. With respect, it seems the plaintiff, some years after the relevant events, is seeking to change the basis upon which it obtained approval from the WAPC (with advice from the Shire) to the subdivision of its land in AA1.

152 In its submissions the plaintiff alleges its contribution to the necessary infrastructure works in U7 was greater per lot than the defendant. This may or may not be the case, depending on how the figures are worked and the assumptions made. However, the plaintiff should have negotiated with the Shire and the WAPC at the time it obtained its approval to subdivide its land. It cannot be rectified at a later time to the detriment of the defendant, by seeking a payment from the defendant, on the basis relied upon in this action.

Are the plaintiff's water and sewer mains "service ducts in connection with the road"?

153 In the alternative, the plaintiff seeks to recover its costs of installing the water and sewer mains on its side of Apricot Street from the defendant under s 159 of the Act. The plaintiff contends that the installation of these services at the time it upgraded Apricot Street is part of the "cost of providing a road" as a "service ducts in connection with the road": s 159(3)(b)(iii) of the Act.

154 As a matter of statutory construction, in my view, it is plain that "cost of providing a road" in subsection (3) includes the situation where an existing road is upgraded, as opposed to the creation of a new road.

155 The plaintiff relies upon Skypoint Investments Pty Ltd v Gavranich & Anor [2006] WADC 153 to support its construction. On the basis of the evidence in that case, Judge Crisford accepted that sewer and water mains were on the balance of probabilities within the provisions of the 1928 Act (in similar terms) having regard to "the concessions" made in evidence by the defendant's witnesses. As a result in that case the plaintiff was successful, with the assistance of the evidence of Mr McKellar, in recovering a contribution to its costs of installing what was described as sewer ducts and water ducts. In making this finding, the trial Judge noted "the terminology used by the plaintiff was not altogether satisfactory".

156 In my view, the purpose of s 159 is to enable the original subdivider who incurred "the cost of providing or upgrading an existing road" to recover a portion of that cost from a later subdivider. Exhibits 6P1 and 6P2 are plans produced by the plaintiff obtained from the Water Corporation showing the location of the sewer and water mains on the relevant portion of Apricot Street.

157 In determining the proper construction of the phrase "service ducts in connection with the road", I note that the section is concerned with "road costs" and that the term used in connection with "the cost of providing a road" is "service ducts". This is in contra-distinction to the term "utility services" defined in s 4(1) of the Act to mean "drainage, electricity, sewerage or water supply services or such other services as are prescribed". In my opinion, the reference to "service ducts" in s 159(3)(b)(iii) is arguably intended to refer to something other than "utility services", otherwise this defined term in the Act would have been used. There is also the limiting effect of the requirement that the ducts be "in connection with the road".

158 Section 4(1) of the Act defines "road" and "utility services" as follows:

(1) In this Act, unless the contrary intention appears -

road means a public thoroughfare for vehicles (as defined in the Road Traffic Act 1974) or pedestrians, and includes structures or other things appurtenant to the road that are within its limits, and a thoroughfare is not prevented from being a road only because it is not open at each end;

utility services means drainage, electricity, sewerage or water supply services or such other services as are prescribed."

159 The word "appurtenant" used in the definition of "road" is defined by the Oxford English Dictionary 'as belonging, as a property or legal right; constituting a property or right subsidiary to one which is more important; appertaining as if by right [to]'. The word "duct" is defined in The Macquarie Dictionary to mean:

"noun 1. Any tube, canal, or conduit by which fluid or other substances are conducted or conveyed. 2. Anatomy, Zoology a tube, canal, or vessel conveying a body fluid, especially a glandular secretion or excretion. 3. Botany a cavity or vessel formed by elongated cells or by many cells. 4. Electricity a pipe for enclosing electric cables. - verb (t) 5. to convey by means of a duct or ducts. [Latin ductus leading, conduct, conduit]."

160 Section 18 of the Interpretation Act 1984 (WA) provides that a construction which would promote the purpose or object of the underlying written law should be preferred to a construction that would not promote that purpose or object. If it was a fact that in order to obtain access to the water and sewer mains it was necessary for the later subdivider to disturb the surface of the road to connect service ducts for the purpose of its subdivision, this might tend to suggest that "service ducts" should be given a broader construction, even though the pipes in question are not strictly "in connection with the road".

161 The evidence is that the installation of the water and sewer mains by the plaintiff was pursuant to separate conditions concerning the Water Corporation. This is as opposed to the road which is the subject of power and control by the Shire and the Main Roads Department. In practical terms, at least to this extent, the water and sewer pipes, and the road (and its associated kerbing and drainage), are separate infrastructure items. As an aside, it is not clear from the evidence that the defendant in fact obtained any benefit from the plaintiff having previously installed the water and sewer mains on its side of the road, because of the process involved in drilling underneath the road pavement and having the Water Corporation make the necessary connections. It is implicit from this that the water and sewer mains infrastructure is not the property of the landowner, even though it may have paid for its installation. This again suggests a separate division in fact and law between the road, and the water and sewer mains.

162 Clearly the correct interpretation must allow the term "service ducts in connection with the road" to have some practical meaning and effect. The defendant contends that the term "service ducts" describes the piping sometimes installed underneath the surface of the road itself in order to allow for the crossover of services generally, including for example, telephone lines. Such ducts (pipes) would obviously be for the benefit, and only for the benefit of the later subdivider. In my view, on a strict interpretation, the term "service ducts" may properly be understood to refer to any pipes necessary to convey or transport water, and road waste or litter away in order to maintain the upkeep and integrity of the road.

163 The term follows immediately after a reference to "kerbing" and "drainage". In this regard it logically, in my view, refers to the pipes necessary to deal with the result of the kerbing and drainage which may (depending on the circumstances) create the need for pipes which is part of the road infrastructure itself, as opposed to other unrelated services not necessary for the construction or ongoing maintenance and integrity of the road. In this sense, such ducts, can be seen to properly form part of the road itself, which is consistent with the intent and object of the section, namely to permit recovery of "road costs" from a subsequent subdivider.

164 In my opinion, the term "service ducts in connection with the road" in s 159(3)(b)(iii) of the Act does not, as a matter of statutory construction, refer to and include the water and sewer mains (even if they are installed on part of the road reserve). In my view, they do not form part of the infrastructure necessary for the road itself. Section 159 is concerned with costs associated with the provision of or upgrading of a road.

165 In my opinion the plaintiff's claim must be dismissed.

Upgrading Berkshire Road adjacent to Agreement Area 1

At a glance

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Judgment (205 paragraphs)

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Legislation Cited (6)

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CIVIL PROPERTIES PTY LTD -v- MILUC PTY LTD [2010] WADC 116 (9 August 2010)