APPEALED FROM: Hobart City Council v Smith [2010] TASSC 11; (2010) 172 LGERA 272, [2010] TASSC 11

Environment and Planning - Environmental planning - Development control - Control of particular matters - Subdivision - Principles governing consent or approval - General principles - Refusal based on lack of access to adjoining lot - Relevant considerations - Duty to further objective of providing for fair and orderly development.

Local Government (Building and Miscellaneous Provisions) Act 1993 (Tas), s85(a).

Judgment Number: [2010] TASFC 9

JOHN SMITH and PENNY SMITH v HOBART CITY COUNCIL

2 The order dated 19 March 2010 is varied so that order no 3 therein reads as follows:

"The appeal to the Resource Management and Planning Appeal Tribunal is remitted to that tribunal for reconsideration in accordance with directions that (a) the tribunal is to be differently constituted; and (b) the tribunal is to regard as relevant considerations (i) the Hobart City Council's past planning decisions relating to 512 Nelson Road, and (ii) the financial consequences of the provision of public road access to 512 Nelson Road through the land of John Smith and Penny Smith."

JOHN SMITH and PENNY SMITH v HOBART CITY COUNCIL

1 I agree with the reasons of Blow J and agree that the appeal should be allowed to the extent of varying the order of the learned primary judge by adding the directions to the tribunal specified by Blow J.

JOHN SMITH and PENNY SMITH v HOBART CITY COUNCIL

2 This appeal concerns an application by the appellants for a permit for a subdivision. They own a bushland block at 502 Nelson Road, Mount Nelson. Its total area is about 2.26 hectares. They want to subdivide it into 12 residential lots. They applied to the Hobart City Council ("the council") for the necessary permit under the Land Use Planning and Approvals Act 1993 ("the LUPA Act"), s57. The council refused that application.

3 There is a similar property that adjoins the appellants' land. That property is 512 Nelson Road. That property does not have a frontage onto any public road. The owner of 512 Nelson Road applied for a permit for a subdivision of that land in 2006, but that application has neither been granted nor refused. It has remained "stalled", essentially because of the lack of direct road access to that property.

4 The appellants' plan of subdivision, as lodged with the council, made provision for a cul-de-sac running off Nelson Road, but not connecting with 512 Nelson Road. One of the reasons for the council refusing the appellants' application was that the plan did not provide for road access, through their land, to 512 Nelson Road. Council considered that any subdivision of their land should include provision for a public road giving such access. There was a second reason for the council's refusal, but it is not relevant to this appeal.

5 In refusing to approve the appellants' plan of subdivision, the council relied upon the Local Government (Building and Miscellaneous Provisions) Act 1993 ("the LGBMP Act"), s85(a). That provision reads as follows:

"The council may refuse to approve a plan of subdivision if it is of the opinion -

(a) that the roads will not suit the public convenience, or will not give satisfactory inter-communication to the inhabitants both of the subdivision and the municipal area in which it is ...".

6 The appellants appealed to the Resource Management and Planning Appeal Tribunal. They were successful: J and P Smith v Hobart City Council [2009] TASRMPAT 94. The tribunal set aside the council's decision and, in substitution for it, made a decision approving the appellants' plan of subdivision.

7 The council appealed, and was successful: Hobart City Council v Smith (2010) 172 LGERA 272, [2010] TASSC 11. Porter J held that the tribunal had erred in law in the following respects:

•

In directing itself "as a matter of law, that the planning power could not be properly used in ... a way which may ultimately impose a burden on the developer and consequentially confer an advantage on an adjoining landowner".

•

In taking into account two considerations that he held to be irrelevant, namely (i) that the problem of road access to 512 Nelson Road had been created by past planning decisions of the council; and (ii) that a requirement that the appellants provide for access to 512 Nelson Road would impose a significant financial impost on them and confer a significant financial advantage on the owner of that property.

8 His Honour set aside the orders of the tribunal and ordered a rehearing by it of the appeal from the council's decision. He also ordered that the tribunal be differently constituted.

9 The appellants contend that his Honour's conclusions as to errors of law were themselves erroneous. Specifically,

•

They contend that the tribunal did not direct itself that the planning power could not be properly used in such a way as to impose a burden on them and confer an advantage on the adjoining landowner, but made a perfectly proper merits-based decision.

•

They contend that the past planning decisions of the council and the financial consequences of a requirement to provide road access to 512 Nelson Road were relevant considerations that the tribunal properly took into account.

10 The tribunal had evidence before it as to the sequence of events that resulted in 512 Nelson Road not having a frontage onto any public road. There was evidence of the following facts:

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512 Nelson Road was originally part of a slightly larger property known as Lot 58.

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Before 1972 there was a subdivision of Lot 58 which resulted in the formation of a "battle axe" block comprising six acres and known as 512 Nelson Road. It had a frontage onto Nelson Road of a little under 80 feet, and was about that wide for the first 150 feet or thereabouts back from Nelson Road. It then opened out behind four smaller residential blocks, to a width of about 330 feet, and extended back about another 750 feet to its rear boundary.

•

On 21 July 1964 there was meeting of the council's Town Planning Committee which approved a road layout. However the council was unable to find any record as to what that committee approved at that meeting.

•

In 1972 the council and the Minister for Lands and Works approved a further subdivision of 512 Nelson Road, dividing it into two lots. Lot 1 comprised the front area measuring about 80 feet by about 150 feet with a frontage onto Nelson Road. Lot 2 comprised the rear area measuring about 350 feet by about 750 feet, with a right of way 12 feet wide running along the western boundary of Lot 1 to Nelson Road. In a letter dated 5 December 1972, the Town Clerk wrote:

"Lot 1 was by a previous subdivision left as a road inlet for the development of lot 58. This is no longer required as alternative road access will become available from the adjoining properties, in line with a road layout approval by the Town Planning Committee on 21st July 1964."

•

As a result of that subdivision, Lot 2, the present 512 Nelson Road, did not have a frontage onto any public road, but it did have rights of way over adjoining properties, to Nelson Road on the north side and Lalwinya Court on the south side.

•

No provision was made for any direct road access to 512 Nelson Road in the City of Hobart Planning Scheme 1982.

11 The tribunal also had evidence as to the likely financial consequences of the provision of public road access to 512 Nelson Road through the appellants' subdivision. That evidence suggested that one lot in the subdivision would need to be sacrificed to provide such access, and that the sale price of such a lot would be in the order of $180,000 or thereabouts.

12 In par[43] of his reasons, the learned primary judge said the following:

"The last two considerations said to be irrelevant to the issue under s85(a) are that the solutions to the access problems of No 512 were put forward to cure a problem created by earlier planning decisions of the Council, and that to provide access to the adjoining lot would impose a significant financial impost, and at the same time confer a financial advantage on the owner of No 512. For the reasons which I have already given in relation to grounds 1 to 4, I agree that these matters are irrelevant to the proper determination of issues under s85(a), and I would add, to the broader exercise facing the Tribunal, excluding of course, any arguments of improper purpose."

13 The appellants' application to the council was an application to which the LUPA Act, s51, applied. By virtue of s51(2)(a), the council was required to seek to further the objectives of the resource management and planning system of Tasmania, which were set out in Sch1 to the LUPA Act. Part 1 of that schedule contained the following:

"1 The objectives of the resource management and planning system of Tasmania are -

(b) to provide for the fair, orderly and sustainable use and development of air, land and water; ...".

14 The tribunal was also required to seek to further those objectives. By virtue of the Resource Management and Planning Tribunal Act 1993 ("the RMPAT Act"), s5(3), the tribunal is part of the State's resource management and planning system. The same objectives are set out in Sch1 to that Act.

15 It follows that, when this matter was before them, the council and the tribunal were each required to seek to further the objective of providing for the "fair" and "orderly" development of land.

16 In my view the evidence as to the financial consequences of providing public road access through the subdivision to 512 Nelson Road was relevant to the determination of the subdivision application because it related to the question whether a requirement to provide such access would be fair or unfair. It was open to the council and the tribunal to conclude that, in all the circumstances, putting the appellants in a position where they could not subdivide without providing road access to the adjoining land was so unfair that refusing approval under the LGBMP Act, s85(a), was inappropriate. On the other hand, it was also open for them to conclude that the provision of such access was a reasonable quid pro quo for the right to subdivide. See Lloyd v Robinson [1962] HCA 36; (1962) 107 CLR 142 at 154.

17 Similarly, I think it was open to the council and the tribunal to make a finding that placing the appellants in a position where they could not subdivide without providing public road access to the adjoining land was inconsistent with the objective of providing for the orderly development of land. In view of the evidence as to the forgotten committee decision of 1964, the ad hoc landlocking of 512 Nelson Road in 1972, the failure to solve the landlocking problem in an orderly manner when the new planning scheme was created in 1982, and the stalling of the 2006 subdivision application in relation to the adjoining land for several years, the arguably opportunistic decision to try to make the appellants solve their neighbour's problem might not be seen as consistent with orderly development.

18 For these reasons, I conclude that the learned primary judge erred in law in holding that the council's past planning decisions and the financial consequences of the requirement to provide road access to the adjoining land were irrelevant considerations.

19 On my reading of the tribunal's decision, there were two lines of reasoning that led it to conclude that the lack of provision for road access to 512 Nelson Road did not warrant refusing approval. The first line of reasoning concerned case law. The tribunal took the view that to refuse approval because of the lack of public road access to the adjoining property was not a proper use of planning power. The second line of reasoning concerned the merits of the case. After considering a number of factors, the tribunal also concluded that the refusal of approval because of the lack of public road access to the adjoining property was not warranted or justified.

20 There is no doubt that the council had a discretion to refuse to approve the plan of subdivision by virtue of the LGBMP Act, s85(a). There is nothing in the relevant legislation that fetters the exercise of such a discretion. In such a situation, principles governing the exercise of a statutory discretion can be developed by the courts: Norbis v Norbis [1986] HCA 17; (1986) 161 CLR 513. The question in this case is whether the tribunal made an error as to the existence of a principle whereby, in certain circumstances, the refusal of approval is not a proper use of planning power. On the hearing of this appeal, counsel for the appellants did not argue that such a principle existed and that the tribunal was right to apply it. He argued that the tribunal did not proceed on the basis that such a principle existed or was applicable, and that the learned primary judge erred in concluding that the tribunal had proceeded on the basis that such a principle existed and was applicable.

21 At this point, I think it is desirable to refer to the reported planning cases concerning road access through subdivisions to adjoining properties. In Lloyd v Robinson (above), the Town Planning Board of Western Australia had approved a subdivision subject to a condition requiring the developer to transfer 20 acres to the Crown free of cost for park and recreation purposes. The relevant statute empowered the Board to impose conditions. The High Court (Kitto, Menzies and Owen JJ) concluded that the condition in question was valid. At 154 their Honours said, "... there is no room for reading the Act down in some fashion by appealing to a principle of construction that has to do with confiscation."

22 In Coulson v Shoalhaven Shire Council (1974) 29 LGERA 166, a council approved a subdivision application, but imposed a condition that the developers grant a right of way in favour of an adjoining property. The developers sued in the Supreme Court of New South Wales for a declaration that the condition was invalid. Helsham J declared it to be invalid. His Honour held that the council did not have an unrestricted discretion as to the conditions it could impose, but that its powers were limited by the Local Government Act 1919 (NSW), s333, which contained an exhaustive list of the matters that the council was required to take into consideration. Nothing in that section entitled the council to take into consideration the means of access to adjoining land. The council was also required, under an interim development order, to have regard to planning principles. His Honour concluded that that requirement did not empower the council to require the grant of a right of way. At 172 he said the following:

"Planning principles involve public considerations, including the placing of restrictions on the rights of owners of land to use, enjoy, or even retain their land, in the interests of the community, and no doubt tree preservation and private access to public roads are matters involving public considerations; but to suggest that these considerations enable the alteration of rights of property as between private individuals, that they can be used to compel one owner to confer a private right of property on another, seems to me foreign altogether to the notion of the application of any town or country planning principles to matters of subdivision."

23 In Proctor v Brisbane City Council (1993) 81 LGERA 398, a council had approved a subdivision, but decided not to impose a condition requiring the provision of road access to some adjoining land. The owner of the adjoining land appealed unsuccessfully, first to the Planning and Environment Court, and then to the Queensland Court of Appeal. The Local Government (Planning and Environment) Act 1990 (Qld), s6.1(1)(c), prohibited the imposition of "a condition that is not relevant or reasonably required in respect of the proposal to which the application relates, notwithstanding the provisions of a planning scheme." The Court of Appeal held that the Planning and Environment Court had properly applied the statutory test of what was "relevant or reasonably required". Their Honours considered Coulson v Shoalhaven Shire Council and Lloyd v Robinson. At 403 they said:

"Neither Coulson nor any other authority which we have found provides reason to doubt the Council's power to impose such a condition as the appellant seeks. ... It may be said that if the desired access were provided, that would be a private advantage for the appellant arising out of subdivision, because no doubt the access could augment the value of his property, but the access would, it must be remembered, be a public, not a private road, and one which persons other than the appellant could use."

24 Coulson v Shoalhaven Shire Council is distinguishable from the present case because it concerned different legislative provisions, and a right of way, not a public road. There is nothing in the relevant Tasmanian legislation which makes this case distinguishable from Proctor v Brisbane City Council. There is no doubt that the council had the power to refuse approval under s85(a) because the plan of subdivision did not provide for road access to 512 Nelson Road. As I have said, the appellants do not contend otherwise.

25 The tribunal seems to have expressed a similar view in its reasons at pars[11] and [12], which read as follows:

"11 Notwithstanding the evidence that emerged at the hearing, it is clear enough, as the Tribunal has already ruled in relation to an associated appeal, that the decision of the Council, ostensibly based upon Section 85(a) was, on the face of it at least, within power. The Council was entitled to refuse to approve a plan of subdivision if it was of the opinion that the roads would not suit the public convenience or would not give satisfactory intercommunication to the inhabitants both of the subdivision and the municipal area in which it is.

12 That such a conclusion may not have been justified, particularly in light of the evidence and concessions made at the hearing, is beside the point. It does not follow from the fact that evidence did not support a particular conclusion that the decision was not within power. The Council was, and is, entitled to reach an opinion that roads will not suit public convenience or they will not give satisfactory intercommunication in respect of any plan of subdivision, and having reached that opinion, is entitled (not obliged) to refuse to approve that plan. ...".

26 The tribunal went on, in pars [14] - [17] of its reasons, to consider the merits of the council's decision, referring to 512 Nelson Road, the fact that it had a different owner, the pending subdivision application dating from 2006, and the rights of way leading to Nelson Road and Lalwinya Court. It then continued:

"18 But it is no proper use of planning power to rectify this difficulty for an adjoining landowner by endeavouring to require Mr and Mrs Smith to provide access at the cost of one lot of their proposed 12 lot subdivision."

27 The tribunal then referred to Coulson v Shoalhaven Shire Council, quoted the passage that I have quoted from that case above, and continued:

"19 The Tribunal quite agrees.

20 To refuse to grant to Mr and Mrs Smith the permit that they seek on the basis that they in turn have refused to submit a proposal which provides a road to the boundary of 512 Nelson Road would be to 'compel one owner to confer a private right of property on another'."

That was not correct, since the creation of a public road, not a private right of way, was contemplated.

28 The tribunal then went on to refer to the cost to the appellants of providing road access to the adjoining property, the possibility of a strata title subdivision of 512 Nelson Road, the possibility of the owner of that property buying the land over which he presently has the right of way to Lalwinya Court, the possibility of him or the council buying a lot in the appellants' subdivision, and the possibility of him buying some other property between his property and Nelson Road. It also referred to the council's decision in 1972, and the fact that the council had not made arrangements for a road reservation under its planning scheme. The tribunal then continued as follows:

"24 The case advanced by the Council that there was the possibility that Mr and Mrs Smith may be compensated at some stage, either now or at an undefined, unspecified time in the future, is so speculative and so vague as to not be a matter that this Tribunal considers it is appropriate to have regard to. In short, to do as the Council suggests would impose a significant financial impost upon Mr and Mrs Smith and confer upon the owners of 512 Nelson Road a significant financial advantage.

25 Such an approach is contrary to principle and not warranted or justified in the circumstances of this case."

29 The tribunal went on to set aside the council's decision and substitute its own decision, ordering that a permit issue to the appellants.

30 Although the tribunal addressed a number of issues relating to the merits, I think it is clear that it relied on two lines of reasoning - one relating to some supposed principle restricting the use of the statutory power to refuse approval under s85(a), and one relating to the merits of the council's decision. I think the reliance upon two separate lines of reasoning is made most clear in par[25] where the tribunal said that the council's approach was both "contrary to principle" and "not warranted or justified in the circumstances of this case". The reference to Coulson v Shoalhaven Shire Council, and the comment that refusal of the application "would be to 'compel one owner to confer a private right of property on another'" also indicate that the tribunal took the view that it was not open to it or the council, as a matter of principle, to refuse approval of the subdivision. Paragraphs [11] and [12] of the tribunal's reasons might be read as saying exactly the opposite. One possible interpretation, bearing in mind the tribunal's use of the words "on the face of it at least" was that the tribunal at that point was dealing only with the nature of the unfettered statutory discretion, as distinct from some supposed principle restricting the exercise of that discretion. Another possibility is that what the tribunal said in pars[11] and [12] was inconsistent with what it concluded at par[25].

31 In the light of this analysis of the tribunal's reasons, I think it is clear that the tribunal took the view that the refusal of the application was contrary to principle and not within power. I think it is clear that the tribunal thereby erred in law. No question of the conferring of a right of property on the owner of the adjoining land arose. What the council wanted was provision for a public road, as was contemplated in Proctor v Brisbane City Council. Nothing turns on the fact that that was a case about a proposed condition rather than a refusal of approval. It was open to the council to refuse approval pursuant to s85(a) because the proposed subdivision made no provision for road access to the adjoining land. There was no principle that prevented the council from refusing approval on any such basis.

32 Although the tribunal also went through the process of considering the merits of the appellants' application and the council's arguments, it had also determined that the financial consequences of providing road access to the adjoining land meant that the lack of road access could not warrant refusal of the application. Because it took that view as to the significance of that factor, it would be wrong to reason that the tribunal, in its second line of reasoning, made a merits-based determination that should be allowed to stand.

33 It follows that the learned primary judge was right to set aside the tribunal's decision and remit the matter for reconsideration by the tribunal.

34 Although I have concluded that the learned primary judge was right to remit the matter to the tribunal, I have also concluded that he was wrong as to the relevance of two considerations. Although his order remitting the matter to the tribunal should stand, I think it should be varied by adding some directions to the tribunal as to relevant considerations. The power to vary the order is conferred by the Supreme Court Civil Procedure Act 1932, s47(1). The power to give directions when remitting a matter to the tribunal is conferred by the RMPAT Act, s23(2)(c)(ii).

35 Accordingly, I would allow the appeal and vary the order of the learned primary judge by adding a direction to the tribunal that, in its reconsideration of the matter, it is to regard as relevant considerations (i) the council's past planning decisions relating to 512 Nelson Road, and (ii) the financial consequences of the provision of public road access to 512 Nelson Road through the appellants' land.

JOHN SMITH and PENNY SMITH v HOBART CITY COUNCIL

36 I agree with the reasons for judgment of Blow J. I agree also that the appeal should be allowed and the order of the learned primary judge be varied as proposed by Blow J.