The Lawson Clinic Pty Ltd v Ku-ring-gai Council

The opportunity for further public benefit material

1. In Lawson (No 1), despite my conclusion that there was no evidence that would provide any basis to quantify any public benefit discount, I did, effectively, grant leave to the Lawson Clinic to provide detailed financial and other information of the nature described in Lawson (No 1) (at [127]) if it elected to do so.
2. As no such further evidence has been filed, it is clear that the Lawson Clinic has determined not to pursue that aspect further, despite my comments at [109] to [125] in Lawson (No 1).

The application for leave to amend

1. At the commencement of the second day of this phase of the proceedings, the Lawson Clinic sought leave to amend the application. The proposed amendments sought to add to the scope of the application that had commenced the proceedings by adding words to it only. As a consequence, the specific terms of the application commencing the appeal and the proposed amendments can be shown by reproducing the proposed amended application with the proposed amendments in bold and underlined. The proposed amended application was in the following terms: 1. The appeal pursuant to s 97AA of the Environmental Planning & Assessment Act 1979 (NSW) be upheld by: a. modifying the deferred commencement development consent No 0327/13 in respect of 742, 746, 746A & 748 Pacific Highway Gordon by deleting or modifying Condition 33 entitled "Section 94 Contributions - Centres". b. modifying Condition 3 to delete the reference to the Draft Operations Management Plan and insert in its place a reference to the revised Operations Management Plan annexed as Appendix E2 to Mr Graham Pindar's Statement of Evidence and Annexure "A" to the affidavit of Mr Jonathan Levy of 4 May 2016. c. deleting Condition 72. 2. Costs. 3. Such further or other orders as the Court deems fit.
2. The proposal to amend was opposed by the Council.
3. In functional terms, the proposed amendments fell into four separate categories, these being: 1. The amendment to 1(a) which is an amendment of a procedurally inconsequential nature, purely responsive to the way the proceedings have unfolded. I permitted this amendment; 2. Second, the amendment proposing the substitution of the March 2016 Operations Management Plan (prepared by Mr Levy and appended to Mr Pindar's Statement of Evidence) for the Draft Operations Management Plan of August 2013, referred to in condition 3 of the conditions of consent (Exhibit E, Tab 4, page 3), is much more than a purely procedural amendment. However, given the nature of the August 2013 draft plan and its incorporation into the conditions of consent, I considered it appropriate to grant leave to amend in this regard. In doing so, I was not, obviously, approving substitution, merely permitting it to be a matter dealt with in my overall determination; 3. Third, the application for leave to amend sought to incorporate, as the draft amended application discloses above, the document signed by Mr Levy and Dr Skarbek that formed Annexure A to Mr Levy's affidavit. Having carefully considered the general terms of that document during the course of Mr Levy's oral evidence, I was satisfied that that document was drafted in terms that were presently incapable of enforcement if imported into conditions of development consent because the document was prepared in descriptive terms and not prescriptive ones. Indeed, in many respects, a significant number of elements in this document are neither sentences nor reference tables but merely lists of descriptive numbers. Whilst I indicated to Mr Ireland that this document had the potentiality to be turned into provisions capable of incorporation in an Operations Management Plan, that was not something that could be dealt with by me in my decision and, as a consequence, it was not appropriate to grant leave to amend with respect to that document. That ruling was based on the totality of the document and entirely sets aside from that consideration matters of a Wednesbury reasonableness (Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223) consideration of whether the observation, to use a neutral term, in the document postulating that banning the students/trainees attending the proposed facility from using vehicles to access the site on any occasion was appropriate. That topic is discussed later in the context of the traffic volume assessment that I am required to address. I declined to permit this amendment for those reasons; and 1. Finally, the application for leave to amend sought to modify the current consent by deleting condition 72 (Exhibit E, Tab 4, page 27). This proposed amendment requires little exploration to understand the final outcome for which leave was granted and to which the Council indicated that it would not raise objection.

The evidence

1. Evidence was provided on behalf of the Lawson Clinic by:

• Mr Levy (the guiding, non-clinical, managerial mind behind the proposed facility - to whose affidavit was appended a statement prepared jointly by him and by Dr Skarbek, the psychiatrist who gave evidence in Lawson (No 1) and who is proposed to be the Medical Director of the proposed facility). Mr Levy also gave evidence in Lawson (No 1);
• Mr Kerr, town planner, who gave evidence in Lawson (No 1); and
• Mr Pindar, traffic engineer, who did not give evidence in Lawson (No 1).

1. Evidence was given on behalf of the Council by:

• Mr Brindle, town planner, who gave evidence in Lawson (No 1); and
• Mr Piccoli, Council's Strategic Traffic Engineer, who did not give evidence in Lawson (No 1).

The presently contested contribution and its Contributions Plan source

1. At [43] to [46] in Lawson (No 1), I set out the source in the Contributions Plan for, and the nature of, the items called up for contribution for development categorised as "business" (that being the broad umbrella under which "commercial premises" falls in the Contributions Plan) in the Gordon Town Centre.
2. I went on to conclude, at [66], that there was sufficient relevant nexus between the proposed facility and that which was called up in this regard by the Contributions Plan.
3. The Lawson Clinic also provided additional town planning evidence preparing to address the issue of the extent to which it might be postulated that, on a planning basis, the proposed facility would contribute to the demand for major works and land acquisition (for three proposed new roads) to be funded through this element of the Contributions Plan levy for commercial premises in the Gordon Town Centre.
4. Before proceeding to consider these issues, it is also appropriate to set out the relevant further extract (Exhibit B, folios 167 to 168) from the Contributions Plan that followed from the more discursive material in Lawson (No 1). This additional detail was also reproduced at [52] in Lawson (No 1). It is in the following terms: 52 The second matter to which it is necessary to turn is the section of the Contributions Plan that followed, immediately, from the more discursive list set out above. This section (Exhibit B, folios 167 to 168) is in the following terms: Transport modelling for the Gordon Town Centre was undertaken by GTA consultants and updated to reflect the then draft revised Ku-ring-gai Local Environmental Plan (Town Centres) 2008 which was exhibited at the end of 2008 by the Ku-ring-gai Planning Panel, adopted for referral to the Minister for gazettal on 27 May 2009 and gazetted on 25 May 2010. The analysis supported the need for the construction of several new roads to break up the long linear blocks on the western side of the Pacific Highway as follows: A link road between Dumaresq Street and McIntyre Street A link road between Dumaresq Street and Moree Street A link road between Moree Street and St Johns Avenue The Roads and Traffic Authority noted that the success of the proposed traffic management scheme depends on all new local roads being implemented. The two remaining are regarded as critical to the functionality of the town centre into the future and, accordingly, the required land is zoned SP2 Infrastructure under the Ku-ring-gai Local Environmental Plan (Town Centres) 2010 which was gazetted on 25 May 2010. An additional proposed new road link between St Johns Avenue and Moree Street is also supported by the Roads and Traffic Authority of NSW.
5. As a consequence, although I had concluded for the reasons set out in Lawson (No 1) that there was a nexus, the Lawson Clinic now canvasses the extent to which a contribution (if any) by it might be appropriate to be levied.

Issues in the second phase

1. It therefore remains for me to consider whether or not the trip-generation rate for commercial premises of two vehicles per 100 square metres set out in the Contributions Plan and, as a consequence, the rate derived therefrom in the Contributions Plan for the identified works in the Gordon Town Centre is appropriate.
2. The outcome of this consideration will provide a basis to calculate the starting contribution (I use this expression for the reasons explained in the next section) to be derived for the proposed facility by application of what I determine is the appropriate vehicle movement factor for this proposed facility.
3. Finally, the Lawson Clinic seeks to have a discount to any calculated contribution on the basis that it is entitled to an offsetting amount as a consequence of the three dwellings presently on the allotments that are to be consolidated as the site proposed facility and which are to be demolished to make way for the proposed facility. The offsetting credit is, I understand it, agreed.

Scope of the second phase

1. Prior to the commencement of the hearing of the second phase of these proceedings, I had examined the five proposed evidentiary statements that were expected to be relied upon during the course of the hearing. As matters subsequently unfolded, as later described, this expected reliance turned out to be the case. My examination of the statements filed by the two town planning witnesses, Mr Kerr for the Lawson Clinic and Mr Brindle for the Council, caused me considerable concern. They raised a fundamental matter as to what was the appropriate scope of the matters to be dealt with during this second phase of the proceedings.
2. Before turning to explain the nature of my concern, it is necessary to set out three elements (two from my decision in Lawson (No 1) and one from the transcript of the first phase) that will provide a proper foundation to understand that which follows.
3. First, it is appropriate to set out the terms of [66] of Lawson (No 1). This paragraph followed from my analysis dealing with the question of whether or not there was some appropriate and sufficient nexus between the proposed facility and those works within the Contributions Plan for the Gordon Town Centre to be funded by development, generically labelled "business" but within which developments properly categorised as "commercial premises" (as I have held these should be regarded), are to be levied. The conclusion that I drew was in the following terms: 66 It therefore follows, from the very terms of the Contributions Plan itself in explaining the basis for these elements of the plan, that contributing to the need for some portion of the integrated whole scheme constitutes contributing to the need for the whole scheme as an integrated entity. Seen in this context, the disaggregation approach that was the foundation of Mr Ireland's submissions lacks validity and cannot succeed.
4. In the concluding remarks toward the end of Lawson (No 1), I also said, to indicate the scope of that which was permitted to be canvassed at the resumed hearing, the following at [123] and [124]: 123 As earlier observed, the parties have also agreed that, if, in light of the conclusion to which I have, in fact, come, they were unable to reach some negotiated outcome able to be embodied in consent orders of the Court, further hearing days have been allocated, on a contingent basis, in mid-May 2016. Given that I am not to be taken to be concluding that there is no public benefit to be derived from this for-profit enterprise but merely no evidence that would permit me to assess whether a discount was appropriate and, if so, how much it should be, I have weighed whether the failure to discharge the evidentiary burden should cause me to dismiss, effectively, the public benefit element of the Clinic's case or whether I should permit the negotiation and (at least contingent) further hearing to encompass an opportunity for the Clinic to provide, at least initially to the Council, what it says might be a proper economic evidentiary basis in support of a proposed discount. 124 I have concluded that, despite the present fundamental inadequacy of that which has been put on behalf of the Clinic (and I am not to be taken to be critical of Mr Ireland in this regard, he has cogently and competently mounted a case based on the material provided to him; it is the inadequacy of that material rather than its presentation in which I find fault), I should permit this element to go forward in tandem with the traffic generation matter for discussions between the parties and, if necessary, further evidence at a resumed hearing.
5. These two extracts provided the parameters I had set for one of the two discrete topics able to be canvassed at the resumed hearing (the second one, an opportunity for the Lawson Clinic to provide some proper evidentiary basis for its claim for a public benefit discount was not pursued as earlier set out).
6. It is also appropriate to note, in this preliminary context, one matter that was expressly excluded from this second phase. That matter was any attack of a general nature on the validity of the Contributions Plan. Mr Robson, senior counsel for the Council, had raised this matter in the hearing leading up to Lawson (No 1) as such general attack had not been pleaded on behalf of the Lawson Clinic and, as a consequence, the Council had not prepared in order to respond on that point. During the first phase, Mr Ireland, counsel for the Lawson Clinic, said (Transcript, 18 March 2016, page 257): So in this decision before Lloyd J or decided by Lloyd J, there were two proceedings. In distinction with what your Honour is dealing with here, there was a class 4 challenge to the contributions plan and also a class 1 appeal. We're only, of course, dealing with proceedings in the nature of the class 1 appeal that was before his Honour. So his Honour went on to deal with the matter pertinent to this case in para 25 on the basis that the contributions plan was valid, so on that sound basis, and of course there's no challenge to the validity of the contributions plan of this council in these proceedings.
7. With respect to the exclusion of general attacks on the Contributions Plan, Mr Ireland confirmed that his instructions did not encompass the making of any such general attack.
8. My examination of the statements proposed to be relied on as town planning evidence caused me to raise with the advocates my concern that, initially, Mr Kerr had run a significant thread through his statement that sought to respond to, and challenge, the determination I had set out in [66] of Lawson (No 1). Mr Brindle, rather than running such a thread through his statement, had expressly responded, in 2.2 of his statement, to this aspect of matters sought to be pressed by Mr Kerr.
9. I indicated to the advocates that I did not propose to permit evidence of that nature as, if the Lawson Clinic was dissatisfied with my determination and felt it could detect some question of law arising in that regard, the appropriate option was for the Lawson Clinic to consider whether or not it wished to test such potential conclusion by commencing proceedings in the Court of Appeal.
10. Mr Ireland indicated that he did not seek to rely on any element of Mr Kerr's Statement of Evidence that sought to canvass my determination in [66] of Lawson (No 1). Rather than seeking to parse Mr Kerr's Statement of Evidence on a sentence-by-sentence or paragraph-by-paragraph basis, I ruled that I would admit it into evidence on the basis of a general exclusion of such matters and, as is always the question in such proceedings, subject to my assessment as to what weight might be given to Mr Kerr's opinions. Similarly, with Mr Brindle's proposed Statement of Evidence, it was admitted as evidence with Mr Robson indicating that he did not tender the portion of the statement in 2.2 that responded to Mr Kerr on the matters in [66] of Lawson (No 1).
11. During the course of my explaining to Mr Ireland my concerns about Mr Kerr's written evidence, I did indicate that there were some elements of his written evidence that were unexceptional, these being where he indicated his approach to the analysis undertaken by the traffic experts. One specific element of this nature to which I drew Mr Ireland's attention was in the following terms: 9 The contribution amount for the "business" category of development is calculated on the basis of trip generation (p 9 of Contributions Plan). The assumed trip generation rate, assumed in the Contributions Plan, for the "business" category is 2.00 peak hour vehicle trips per hour per 100m2 of gross floor area (p 179). 10 The proposed hospital has a gross floor area of 2,704m2 giving a total assumed trip generation of 54.08 vehicle trips per hour based on that rate of trip generation assumed by the Contributions Plan. 11 However, the statement of evidence prepared by Mr Pindar estimates the trip generation from the proposed hospital at 16 vehicle trips per hour, or 29.59% of the assumed trip generation. 12 On this basis alone, in my expert opinion, it would be appropriate to discount the contribution amount by 70% based solely on the trip generating characteristics of the proposed psychiatric hospital. This is because the only basis for identifying the required contribution in the business category identified by the Contributions Plan is trip generation, yet the expert evidence of Mr Pindar demonstrates that the proposed development will as a matter of fact generate a lower rate than the rate assumed by the Contributions Plan. A proportionate reduction, in my opinion, would set the maximum level for the contribution in the present case, as a matter of reasonableness.
12. In addition, one of the appendices to Mr Kerr's report was a short document prepared by Mr Brindle concerning the indexation adjustments to contributions to be exacted pursuant to the plan, as a consequence of the plan having come into effect in November 2010, and the various contribution rates contained in it requiring to be adjusted to account for the time lapse. That document sets out the basis for the current contribution rate used by Mr Brindle. It assists in understanding indexation issues discussed in detail later. The attachment was in the following terms: CONTRIBUTION RATE CALCULATION The contribution rate referred to in my statement of evidence dated March 2014 of $214.20 is the rate per square metre of GFA for business appearing in the Summary Contribution Rates on page 9 of the CP ($146.65) INDEXED TO December 2014. Page 212 of the CP identifies the costs for various elements of the works schedule for Local Roads, Local Bus Infrastructure and Local Drainage: New Streets and Street Modifications. Page 62 of the CP states that the rates in the plan are indexed from December Quarter 2008 for land value cost estimates and September Quarter 2009 for construction cost estimate purposes. For land value cost estimates on page 212, the index used to index the contribution is the Housing Price Index (Sydney) (ABS Publication 6416.0 Residential Property Price Indexes: Eight Capital Cities Table 2 Established House Price Index, Index Numbers and Percentage Changes) For construction cost estimates on page 212, the index used to index the contribution is the CPI (All Groups Sydney) (ABS Publication 6401.0 Consumer Price Index, Australia). Both are readily available indices produced by the Australian Bureau of Statistics. The House Price index is now called the Residential Property Price Index.
13. The written town planning evidence was admitted on this narrowed basis, as was the concurrent oral evidence of Mr Kerr and Mr Brindle so conducted. There was no written joint planning report.
14. I was only obliged to intervene on one occasion, during the course of the evidence of the town planners, to decline to permit Mr Kerr to mount what seemed to me to be a plan-wide attack on the indexation methodology (later discussed in more detail in the context of the specific contributions sought to be levied on the proposed facility). I indicated to him that he could express an opinion as to why there were circumstances associated with the specific calculational basis for this proposed contribution that might render an element of the indexation process unreasonable but he was not permitted to deal with that topic on the very broad basis upon which he had embarked.
15. Mr Pindar also provided a detailed analysis of what he expected to be the pattern of traffic movements to and from the proposed facility. I understood Mr Ireland's submission with respect to them to be that he was not seeking to use them to found a challenge to my decision at [66] in Lawson (No 1), but to provide support for the basis that it would be reasonable to adopt a lower traffic movement factor. Such an approach is, in my view, disingenuous. My conclusion at [66] in Lawson (No 1) speaks for itself and confirms, as remains the case, the appropriate basis for my consideration in this phase of the proceedings: that the Gordon Town Centre traffic management works are, for the reasons set out in Lawson (No 1), an integrated package resulting from all anticipated contributions to increases in traffic volume for the Gordon Town Centre.

Mr Levy's evidence

1. Mr Levy, who I had described at [74] in Lawson (No 1) as being the guiding mind for the proposed facility, provided an affidavit for this phase of the proceedings. Mr Robson objected to the affidavit on the general basis that both the affidavit and the annexure to it were based on hearsay (and, potentially, some of it on second-hand hearsay).
2. Notwithstanding the fact that s 38(2) of the Land and Environment Court Act 1979 applies to these proceedings and, as a consequence, I am not bound by the strict rules of evidence, Mr Robson suggested that, in effect, the reliance on such material was so egregious as to warrant its rejection. I declined to accede to this submission. I took the view that it was appropriate to permit the material and for Mr Robson, should he choose to do so (as he did), to cross-examine Mr Levy on the assumptions and the facts contained in his affidavit and its annexure, with Mr Robson having the right to make such submissions as he considered appropriate as to the weight that should be given to Mr Levy's written and oral evidence.
3. It is unnecessary, at this point in my consideration, to set out any detailed point-by-point analysis of the entirety of the matters dealt with by Mr Levy in his written and oral evidence. However, there are, in my opinion, three aspects of his evidence with which it is appropriate to deal at this point. These are: 1. First, the detailed range of assumptions about operational aspects of the proposed facility set out in Annexure A to Mr Levy's affidavit (an annexure signed by Mr Levy and co-signed by Dr Skarbek (the Clinical Director-Designate of the proposed facility) represent the current understanding of Mr Levy and an entity he described as, on my note, the Medical Committee of the proposed facility, as to what would be the appropriate bases for estimating vehicle movements, their timing and the underlying causes of them. To the extent that this material might have underpinned the written evidence of Mr Pindar, in any general or specific aspect, I ruled that that was a matter for questioning of Mr Pindar rather than of Mr Levy; 2. Second, with respect to the postulated number of one or two UNSW students/trainees being present at the proposed facility on any day and the stated intention that they would be forbidden to drive to the proposed facility, Mr Levy conceded that that was, in effect, an aspirational statement and one which would not be able to be enforced in any practical way; 3. Third, Mr Levy acknowledged that there were no provisions that mandated that those estimates were to act as any limit on the number of vehicle movements generated for any of the aspects of the proposed facilities operation canvassed by him and, whilst he indicated that the Lawson Clinic would accept such conditions, they were not offered on its behalf except to the extent of Annexure A to Mr Levy's affidavit - an approach rejected as earlier explained.

The oral town planning evidence

1. The oral town planning evidence proceeded on a comparatively unusual basis in that, although Mr Ireland indicated that he wished to question Mr Brindle, Mr Robson did not wish to question Mr Kerr.
2. As a matter of fairness to the Lawson Clinic, as both Mr Brindle and Mr Kerr had provided written statements with them having been prepared sequentially (Mr Brindle responding to Mr Kerr), I considered it appropriate to proceed in the usual fashion, that is, by the giving of concurrent evidence. However, I considered it appropriate to confine Mr Kerr to responding to, and commenting on, such matters as arose from Mr Ireland's questioning of Mr Brindle rather than permitting Mr Kerr the opportunity to give what would have amounted to unconstrained additional evidence-in-chief, given that Mr Robson did not propose to test his evidence.
3. The oral evidence that followed (it being, as might be anticipated under the circumstances, primarily from the questioning of Mr Brindle by Mr Ireland) canvassed a comparatively narrow range of themes. These, in my assessment, were:

• The provision allowing for expenditure relating to property acquisition for the construction of the proposed north-south- running link roads to break up the lengths of the existing long blocks running east-west and bounded by St John's Avenue, Dumaresq Street and Moree Street;
• The fact that, despite the terms of the Contributions Plan contemplating its revision, no such revision had occurred despite the fact that the Contributions Plan had come into effect in late November 2010;
• The appropriateness of the indexation methodology adopted by the Contributions Plan with differing factors derived from the House Price Index (now Residential Property Price Index) be applied to land acquisition, on one hand, and a more general Sydney Consumer Price Index factor, to the remaining elements on the other;
• In light of the actual land acquisition costs to date for the purposes of the linking roads, what was the prospect of there being a significant surplus being generated from collections for, and the carrying out of, the presently provided for Gordon Town Centre element of the Contributions Plan and, if this were to arise, how the Contributions Plan proposed that any such surplus be dealt with; and
• Matters of detail suggested by Mr Brindle as to why elements of the proposed facility's operations might be expected to generate higher rates of the peak-hour traffic movements than Mr Brindle had understood were assumed for the purposes of analysis of such matters.

1. It is convenient, in my consideration of these matters, to deal with and dispose of this final aspect raised by Mr Ireland with Mr Brindle. In doing so, it is unnecessary to analyse the matters set out by Mr Brindle in 2.2 of his Statement of Evidence, Mr Ireland's questions concerning them, and the concessions made by Mr Brindle in response.
2. It is, however, appropriate to note, as an element to be taken into account in my weighing of the evidence given by Mr Kerr and Mr Brindle, that Mr Brindle readily conceded that elements of his assumptions were based on what had now been revealed to be incorrect foundations as established by Mr Levy's evidence or by a proper analysis of the March 2016 Operations Management Plan appended to Mr Pindar's Statement of Evidence and as explained by Mr Levy in his oral evidence. In this regard, Mr Brindle's evidence was frank and candid.
3. I am satisfied that, to the extent that Mr Brindle's evidence, both written and oral, sought to provide a foundation for any upward adjustment to peak-hour traffic movement assumptions, it did not do so. It is, however, appropriate to note in this context that Mr Brindle's evidence had been prepared prior to the joint conferencing and resultant joint report of the traffic experts, this process having resulted in agreement between the traffic experts on a peak-hour vehicle trip-generation rate appearing, as later discussed, in their joint report.

Land acquisition for the link roads

1. Approximately 80% of the estimated cost of elements in the Contributions Plan for the Gordon Town Centre for which business development proposals are to be levied is for land acquisition for the north-south-running link roads.
2. Six properties are identified for acquisition to permit their construction. Five of those six properties have been acquired and, as later discussed in more detail, one of the link roads has been constructed. As a consequence, significant actual expenditure is able to be considered in these proceedings, rather than merely anticipated amounts.
3. Mr Brindle's Statement of Evidence sets out a table identifying the six properties by street address, the anticipated acquisition cost and, for the five properties already acquired, the actual acquisition cost. That table is reproduced below: Land Acquisition Cost Estimated Cost in Plan 33 Moree $2,950,000 $2,796,800.00 32 Dumaresq $2,600,000 $2,751,200.00 36 Mclntyre $1,800,000 $1,981,700.00 41 Dumaresq $1,825,000 $1,900,000.00 23 St Johns Not purchased $6,150,730.00 4A Moree $990,000 $3,550,000.00

1. This makes it clear that, for four of the properties, those anticipated for acquisition, for the future, as having an underlying zoning (absent acquisition) for higher density residential development, the anticipated acquisition cost was $1,900 per square metre, whilst that for properties that had an underlying future zoning of "commercial" were anticipated to have an acquisition cost of $7,100 per square metre. However, all five acquired properties were purchased at about the $1,900 per square metre rate.

The traffic evidence

1. Mr Pindar and Mr Piccoli gave concurrent evidence directed to the question of the appropriate traffic generation rate to be adopted for the proposed facility. The starting point in considering this issue is clearly to be found in the agreed position expressed by them in their Joint Expert Report (Exhibit N). Their adopted, settled and compromise position is set out on page 2 in the following terms: In the circumstances, GP and JP are prepared to accept 20 veh/hr as the likely traffic generation for assessment purposes, which is significantly higher than the 11 veh/hr as approved based on the DA assessment process; and is similar to the 19 veh/hr based on surveys of a similar facility. This therefore assumes minimal walking trips.
2. Mr Ireland's questioning of Mr Pindar dealt with the basis upon which he was prepared to adopt this compromise outcome as an acceptable alternative to his primary position put in his individual Statement of Evidence (Exhibit M, page 10, final paragraph) in which he concluded, for the reasons there set out, that the appropriate rate to be adopted was the rate of 16 vehicle movements per hour in peak period.
3. Mr Pindar explained that, although he considered that it was even possible that a rate a little lower than 16 might be able to be justified (for example, on a proper consideration of the analysis of traffic movements associated with the St John of God Hospital at Burwood used by the then Roads and Traffic Authority in its document entitled Guide to Traffic Generating Developments, as a consequence of that facility being a general hospital as well as a psychiatric hospital with a much larger staffing and higher visitor rate than might be expected for the proposed facility). Nonetheless, he did not resile from the adoption of the rate in the joint report as being an appropriate compromise rate under the circumstances.
4. In response to questioning from Mr Robson, he acknowledged that the assumptions underpinning significant elements of his analysis on page 9, and portion of page 10, of his individual report was based on material provided to his office either by e-mail or conversational contact with Mr Levy. I have discussed Mr Levy's evidence earlier and will return to how I should deal with it in my subsequent analysis of Mr Robson's submissions.
5. It is, however, appropriate to set out some elements of Mr Pindar's statement that explain why he adheres to the view that the position he had agreed to be adopted with Mr Piccoli in the joint report should be regarded as a very conservatively appropriate position, even if there were flaws such as those relating to the assumption of zero traffic generation by students/trainees attending the proposed facility. Mr Pindar wrote: Nursing shift times are staggered throughout the day, with typically 1-2 nurses arriving or departing per hour to ensure eight nurses are on site at all times. In addition, up to eight doctors are in attendance during the day plus nine auxiliary staff including cleaners and kitchen hands. Therefore, a 'worst case' assessment of the typical arrivals/departures assumes 100% of staff travel to site by private car in the AM network peak hour, all eight doctors and nine auxiliary staff arrive in the same hour, two nurses arrive and two nurse depart during this hour and both the daily food delivery vehicle arrives and then departs during this hour. …In practice, the traffic generation would be significantly below this value, once more reasonable assumptions about trave mode splits, rid sharing and staggered arrival times for staff and deliveries are made; and the impact of the doctor arrivals is removed. Specifically, based on consideration to the factors listed above, a trip generation rate of 16 vehicles per hour during both AM and PM peak periods would be a more realistic assessment of the impacts on the road network peak hour of this mental health facility containing 64 beds and with a maximum of 25 daytime staff, including 8 doctors drawn from the existing consulting rooms.
6. Whilst Mr Pindar explained, in some detail, why he had adopted the original numbers he had set out in his Statement of Evidence and why he considered the agreed traffic generation rate to be conservative (in my terms, it was clear that he regarded it as generous in favour of the Council, although remaining acceptable), it was clear that, despite Mr Ireland's questioning, Mr Pindar was not prepared to repudiate the agreement with Mr Piccoli and propose that some alternative lower number would be appropriate to be adopted.
7. Mr Pindar specifically rejected the proposition that, if there were to be a demonstrated defect in his reliance on the material provided by Mr Levy, such as a zero-trip impact by the student/trainee attendances, the very conservative approach that he had taken in adopting the compromise agreed traffic generation rate could not warrant upward adjustment in the agreed number.
8. As there was, in fact, a generous buffer built into it such that (again, my terms) any potential basis for adjustment that might arise out of subsequent flaws to be found (if they were found) in Mr Levy's instructions as to assumptions to be made for the operation of the proposed facility, the buffer was already sufficient to accommodate such hypothesised potentiality for adjustment and no upward adjustment would be warranted.
9. Indeed, I understood him to accept that, if the assumptions that he had made about arrival times of medical professional staff (psychiatrists and other doctors, but not nurses) overstated such vehicle movements, this confirmed his view that there was appropriate conservative generosity in the agreed number and could be no potential basis to increase it.
10. However, as I understood the tenor of his evidence, he did not accept that this factor, either, provided any basis for a downward adjustment from the agreed position.
11. Mr Piccoli's position was, as I understood his evidence, a little more nuanced. My understanding of his position can be dealt with comparatively briefly as he was not subject to the same rigour of questioning in the witness box as was Mr Pindar.
12. Mr Piccoli was asked whether, if the student/trainee position was not accepted and some traffic movement assumption above zero should be adopted for these attendees at the proposed facility, it would be appropriate to consider an upward adjustment in the agreed rate. By inference, his position was that if any other error or defect were to be detected in the material contained in Annexure A to Mr Levy's affidavit (and as reproduced in Mr Pindar's Statement of Evidence), further reflective upward adjustments should also be contemplated.
13. However, in the overall context relevant to my consideration of this issue, Mr Piccoli did not seek to resile from the appropriateness of adoption of the agreed compromise position set out in the Joint Traffic Report.
14. At the conclusion of this concurrent evidence, it was clear to me that, whilst each expert felt that there were legitimate tensions in the matters that they were considering, with those tensions being downward (Mr Pindar) and upward (Mr Piccoli), neither of them was prepared to assert, in any positive fashion, that it would be inappropriate to adopt their agreed compromise position as set out in the joint report.
15. I was satisfied that, at that point in the proceedings, the prima facie position was that I should adopt their agreed rate, unless persuaded otherwise by either Mr Ireland's or Mr Robson's submissions (matters to which I turn later).

Condition 72 of the development consent

1. Condition 72 in the development consent is in the following terms: An Operational Management Plan must be adopted by Management and cover issues such as visiting times, patient use of outdoor areas, noise management techniques, complaints handling and security. A copy must be kept onsite in the main office. Reason: to ensure the operation of the facility minimises impact on neighbouring residents.
2. Deleting the condition would, whether or not the Operations Management Plan of March 2016 was substituted in condition 3 for the August 2013 Draft Operations Management Plan already referenced, be to no effect as an Operations Management Plan (whichever one being immaterial) would be mandated to be followed without the necessity for such a plan being separately required pursuant to the terms of the existing condition 72.
3. I suggested to Mr Ireland that, leave having been granted, if I were to determine that that aspect of an amended application should be approved, there would be no functional utility arising as a consequence of me doing so.
4. I observed to Mr Ireland that my experience in such matters in the past, on many occasions, was that the preferable course of events was to retain the requirement for such a plan but to modify the condition so that it permitted amendment to the plan (so that it became an adaptable document) but that any changes to the plan should require the approval of the Council. Such an informal process would provide an appropriate degree of flexibility whilst, at the same time, providing an appropriate role for the Council without the necessity for a formal application to modify the existing conditions of the development consent.
5. Mr Ireland and Mr Robson agreed that that was an appropriate and acceptable approach. As a consequence, I granted leave to amend in those terms, noting, as I here do, that that aspect of the amended application is not contested. The outcome will, therefore, be that a settled revised condition 72 will be substituted by consent.

The issues remaining

1. Having determined in Lawson (No 1) that the appropriate categorisation of the proposed facility is "commercial premises" and that, thus, it is brought within the business rate for the calculation of a contribution for works in the Gordon Town Centre pursuant to the provisions of the Contributions Plan, there remain two issues for determination in this phase of the proceedings. They both relate to how the base rate of $146.20, adopted at the commencement of the Contributions Plan in November 2010, should be applied to the proposed facility. This involves consideration of two separate issues: 1. First, whether there is a proper basis, on the grounds of reasonableness as discussed in Rose Consulting Group v Baulkham Hills Shire Council [2003] NSWCA 266; 58 NSWLR 128 and permitted by s 94B of the EP&A Act, for me to depart from applying the assumed peak-hour vehicle movements factor in the Contributions Plan (two vehicles per 100 square metres of gross floor area) to this proposed facility. This consideration involves determining what would be the likely reasonable vehicle movement rate per 100 square metres in peak hour for the proposed facility. Then, if there is a difference between that rate and the assumed rate in the Contributions Plan, would it be reasonable to alter the plan's calculation factor (for the purposes only of this proposed development), after considering whether it was appropriate to do so in light of the extent of such difference as may have been established after proper consideration of the traffic analysis; and 2. Second, whether or not, for the purposes of indexing the 2010 Gordon Town Centre business base rate to reflect movements in costs over the intervening period, the approach adopted by the Contributions Plan in 1.38 should be applied or, as Mr Ireland submits would be appropriate, a different indexation basis should be adopted as reasonable in the circumstances of what is now known about the costs of the land acquisition element for the relevant Gordon Town Centre works. If the approach proposed by Mr Ireland were to be adopted, by application of the lower of the two indexation rates in the Contributions Plan rather than the hybrid application process provided in the plan, the indexation effect on the amount to be exacted from the Lawson Clinic would be significantly lower.
2. These two matters are quite separate elements requiring resolution. Although the answer to each proposition has the potential to impact significantly on the contribution falling due (and, if both Mr Ireland's propositions find favour, very significantly affect the amount falling due), the answer to one is in no way contingent on the answer to the other.

The Contributions Plan indexation provisions

1. The Contributions Plan provides two separate bases for indexation of amounts set out in the plan to enable the amounts to be adjusted appropriately to reflect movements in prices over the period since the plan was adopted in November 2010. These provisions are contained in 1.38 of the plan (Exhibit B, Tab 1, folios 65-66), a section of the plan in the following terms: 1.38 Indexation of Contributions Contributions towards the capital works programme in this Development Contributions Plan will be indexed quarterly by the Consumer Price Index (All Groups Sydney), being a readily accessible public index. Contributions towards land acquisition will be indexed quarterly by the Housing Price Index (Sydney), being, likewise, a readily accessible index. Contributions will continue to inflate until they are paid. Both the Consumer Price Index and the Housing Price Index are published quarterly on the website of the Australian Bureau of Statistics at www.abs.gov.au. For the purposes of indexation, there is no differentiation in this plan between past works under recoupment and future works - both will be indexed quarterly. The amendments to the development contributions legislation which commenced on 8th July 2005 effectively required that contributions for past works must also be inflated in accordance with the Environmental Planning and Assessment Regulation, 2000 as specified in the relevant Contributions Plan. This process is fair and reasonable because it facilitates the timely provision of works under a rolling works programme by facilitating internal borrowing. Contributions for all works will be adjusted both at the time of consent of an individual Development Application and time of payment in accordance with the quarterly Consumer Price Index (All Groups Sydney) and the Housing Price Index- Established House Prices (Sydney). The justification for this adjustment lies both in the need to keep pace with increasing costs of implementation and to ensure equity between earlier and later developers in real terms (time value of money). It should be noted that there are essential lead times for Development Applications which are reported to the Consent Authority for determination. If the quarterly CPI or HPI changes between the reporting deadline and the council meeting, the updated amount will not necessarily appear in the consent. All contributions will continue to inflate until paid. For changes to the Consumer Price Index - (All Groups Sydney), the contribution rates within the plan will be reviewed on a quarterly basis in accordance with the following formula: The formula below is used to calculate the changed contributions payable: $CCW + $CCW x ([Current Index - Base Index]) [Base Index] Where: $CCW is the contribution towards capital works at the time of adoption of the plan expressed in dollars; Current Index is the Consumer Price Index as published by the Australian Bureau of Statistics available at the time of review of the contribution rate; Base Index is the Consumer Price Index as published by the Australian Bureau of Statistics at the time the works programme of this Contributions Plan was costed. $CLV + $CLV x ([Current LV Index - Base LV Index]) [Base Index] Where: $CLV is the contributions towards land within the plan at the time of adoption of the plan expressed in dollars; Current Index is the land value index as published by the Australian Bureau of Statistics available at the time of review of the contribution rate; Base Index is the land value index as published by the Australian Bureau of Statistics at the time the works programme of this Contributions Plan was costed. Note: For construction cost estimate purposes, the base date of this Contributions Plan is the September Quarter 2009. For land value cost estimates, the base date of this Contributions Plan is the December Quarter 2008. These are the respective quarters within which the Quantity Surveyor cost estimates were undertaken by Page Kirkland and the land valuations estimates were undertaken by HillPDA.42 Commencing during 2010, following the in force date of this consolidated Contributions Plan, Ku-ring-gai Council intends to fully integrate its contributions management with the mainframe system. As each updated CPI and HPI figures is entered into this system, it will automatically inflate unpaid contributions until such time as they are receipted. It will be necessary to verify with Council the correct payment due at the date payment is proposed.
2. Although I deal, later, with the competing evidence from Mr Kerr and Mr Brindle, and the competing submissions from Mr Ireland and Mr Robson concerning this issue, it is apposite, at this point, merely to note that, if the Consumer Price Index element of the envisaged adjustment process were applied to the totality of the rate for the proposed facility (the traffic generation calculus being irrelevant on this point), the rate of indexation since the commencement of the plan would be approximately 12%, whilst the relevant application of the Housing Price Index would result in an adjustment of approximately 55% to whatever is the calculation basis I determine after consideration of the traffic evidence.
3. A table of the quarterly incremental increases in each of these indices was Exhibit P and the description of the general nature of the competing positions is drawn from this exhibit.

The absence of review of the Contributions Plan

1. Mr Ireland also submitted that the fact that the Contributions Plan had not been reviewed since it came into effect in late 2010, when coupled with the fact that the land acquisition data (Section 3.8, Exhibit B, Tab 1, folio 118-119) upon which, particularly, the $7,100 per square metre rate adopted for acquisition of commercially zoned land was based, added to his submission that it was reasonable to take an approach favourable to the Lawson Clinic in considering these aspects of the Contributions Plan.
2. The first step in considering this submission is to turn to the provisions of the Contributions Plan itself. These provisions are set out in s 1.42 of the plan. They are in the following terms: 1.42 Monitoring and Review Ku-ring-gai Council acknowledges the necessity for monitoring a range of variables with respect to the on-going strategic management of the contributions system including: building and population growth, assessed demand, income and expenditure, future cash-flow and operational management systems. Ku-ring-gai Council recognises and supports the importance of keeping a Contributions Plan under review. It is generally intended that this plan will be comprehensively reviewed every five years triggered by the full release of census data from the five-yearly census. It is anticipated that data from the 2011 census will be released during 2012 allowing a review to commence in that year. Ideally, there will also be at least one review between each census. Reviews may also be triggered by the need to manage specific aspects of the plan such as significant changes in the cost of land or materials; in the event key parameters such as the scale of future development change; or in response to legislative change. Note: While Ku-ring-gai Council commits to keeping this Contributions Plan under review, nothing in this Contributions Plan can be taken as a commitment to adopt any review of this document by any specific date. Nothing in this Contributions Plan may be read as implying that the Plan will cease to operate unless reviewed within any particular period.
3. I have set out above the provisions of the Contributions Plan dealing with the anticipation of a review of it. As noted, Mr Ireland relies on the absence of such a review as contributing to a basis for concluding that departure from the terms of the plan would be unreasonable.

Mr Robson's submissions on Mr Levy's evidence

1. Mr Robson submitted that I should be very cautious in my approach to the material supplied by Mr Levy and incorporated in Annexure A to his affidavit. He submitted that, because Mr Levy had a significant financial and managerial interest in the proposed facility, I should consider that that which was contained in the annexure was self-serving and I should be sceptical with respect to it in the complete absence of any supporting documentation from any of the potential service providers.
2. I also understood that, with respect to the changes that Mr Levy has made to the Operations Management Plan between the August 2013 draft incorporated in the conditions of consent and the March 2016 version (appended to Mr Pindar's Statement of Evidence - Exhibit M, Appendix E), I should also regard those aspects of the March 2016 document, such as changes to visiting hours and the nature of rostering of nursing staff within the Operations Management Plan's framework (about which Mr Levy gave oral evidence) with considerable caution. This submission was, as I understood it, that I should infer that those changes were designed to reduce the anticipated actual vehicle movement number for the proposed facility at times relevant to calculation of the contribution to be exacted from the Lawson Clinic.
3. I turn, first, to deal with the material contained in Annexure A to Mr Levy's affidavit. The material provided was, on Mr Levy's oral evidence, obtained by him after discussions with various potential suppliers of the relevant services. He detailed the names of the firms with which he had had the consultations in his affidavit or in Annexure A to it. He was unshaken on this point, despite cross-examination by Mr Robson.
4. There are, in my assessment, two conclusions to be drawn from Mr Levy's written and oral evidence in this regard.
5. The first is that there is nothing inherently implausible in the material contained in Annexure A as to the likely number of, and scheduling for, vehicle movements for hospital operational purposes. To the extent that the facility's management can control the scheduling of services, there is nothing unreasonable in management seeking to do so in a fashion that minimises the impact that such scheduling would have on the calculations concerning vehicle movements that will derive the contribution to be exacted pursuant to the Contributions Plan. Such a management attitude is to be regarded merely as prudent commercial conduct.
6. Second, with respect to the way the information has been provided, issues of proportionality arise. Whilst undoubtedly, at some later stage, when construction of the proposed facility is significantly advanced, calling tenders for, or arranging direct-service contracts with, the suppliers of the various services will necessarily arise. However, in the circumstances of these proceedings, it would seem to me to be somewhat disproportionate to have required Mr Levy to go to the extent of harvesting the material provided in any greater detail than that attached as Annexure A to affidavit.
7. The first of the above discussed conclusions as to prudent commercial management also applies to the changes to the Operations Management Plan, changes that have, in the fashions noted above, created a potentially beneficial impact for the proposed facility in the relevant vehicle movement calculation. In this regard, it is also equally valid for Mr Levy to have had regard to commercial planning aspects related to the contribution that will result from these proceedings in the preparation of such a plan.
8. I do not consider, on this basis, that I should treat Mr Levy's evidence with the caution proposed by Mr Robson.

Conclusion on the vehicle movement issue

1. I have earlier set out the evidence of Mr Pindar and Mr Piccoli, together with the competing submissions made by the advocates concerning this - Mr Ireland's being that I should adopt a vehicle movement rate no higher than Mr Pindar's 16 vehicle movements as being the relevant calculator and Mr Robson's that, potentially, I could increase the number of vehicle movements above that adopted by Mr Pindar and Mr Piccoli as a mutually acceptable, conservative vehicle movement calculation (this being, as I understood it, on the basis that I should, first, treat Mr Levy's evidence sceptically and, with respect to the specific element of student/trainee movements postulated as being zero, add to such movements as Mr Pindar suggested would be the appropriate number if some adjustment were to be made).
2. Despite valiant attempts by both advocates to establish some foundation for departure, whether up or down being irrelevant in my view, from the position that Mr Pindar and Mr Piccoli had settled on as an appropriate, conservative vehicle movement calculation factor, neither of them has persuaded me that I should set aside the evidence-based conclusion reached, by agreement, by two well-qualified expert witnesses. These witnesses have given their written and oral evidence in a fashion, it seemed to me, entirely consistently with the duty to the Court (and not their instructing party) required by the Civil Procedure Act 2005 and the relevant expert witness requirements and code of conduct contained in the Uniform Civil Procedure Rules 2005.
3. I have, therefore, concluded that the relevant vehicle movement factor to be adopted for the purposes of my analysis is that of 20 vehicle movements per hour at the relevant time of day.
4. The general issue of whether or not the overall state of the conclusions that I reach on both issues in contention should trigger a Rose Consulting intervention to adjust the raw figure that would otherwise be derived from rigid adherence to the provisions of the Contributions Plan is dealt with, later, as a separate matter for consideration.

The indexation basis argument

1. Mr Ireland's submissions concerning the indexation factor to be applied to the 2010 base contribution is founded on the proposition that the land acquisition component for the Gordon Town Centre works in the Contributions Plan will, effectively, generate a windfall for the Council of a minimum of approximately $3 million and, potentially, a much larger amount (if the property at 23 St John's Avenue is able to be acquired on the same basis as the property at 4A Moree Street has already been acquired - this acquisition being at a rate generally in line with the anticipated residential acquisition rate set out in the Contributions Plan rather than at the commercial acquisition rate that had been anticipated for this purchase during the preparation of the plan).
2. It seems to me that, in light of Mr Brindle's evidence concerning the underlying zoning of 23 St John's Avenue, absent the public purpose presently evidenced by its SP1 zoning, would be "commercial" (and that the adjacent property to the east was, in fact, zoned "commercial"), I must conclude that, absent some specific evidence on behalf of the Lawson Clinic (it having the persuasive burden in these proceedings) that that property was not reasonably likely to be acquired at residential rates. Therefore, it is appropriate that I conclude that the larger potential windfall surplus from the land acquisition element for the Gordon Town Centre was unlikely to be realised
3. It is, therefore, also appropriate to deal with Mr Ireland's submissions on why a lower indexation rate should be applied on the basis that there is to be a surplus of some $3 million in the land acquisition component. This takes that aspect of the Lawson Clinic's case at its highest and assumes that the acquisition price for 23 St John's Avenue will be no more than that which has been allowed in the Contributions Plan. The Council's position, on my understanding of the totality of the evidence, is to respond to the proposition that the $3 million constitutes a windfall surplus (that should, in effect, partially be redistributed to the Lawson Clinic) by saying: 1. First, the totality of the projected expenditure for the Gordon Town Centre traffic-related works should be regarded as a composite whole and, properly regarded in that fashion, it was unreasonable to assume that there would be a surplus anywhere near the quantum posited by Mr Ireland or, potentially, at all; 2. Second, the Contributions Plan expressly set out a range of matters that would have otherwise been funded by the plan and were necessary works in themselves (albeit of a lower order of priority than those adopted for the plan) and the plan made specific provision for the application of any surplus funds over the life of the plan to be extended to some of those works and that this was provided for in the plan itself; and 3. Finally, the operation of contributions plans, generally, permitted councils to operate on a pool-of-revenue basis, lawfully moving money round to advance funds to effect some parts of the works to be funded pursuant to a contributions plan, with the items from which the pool funds had been drawn down being subsequently replenished as more contributions were received for works already executed. This recoupment process is one that, as I understood the Council's position, requires the indexation process as set out in the Contributions Plan to be applied without being tampered with in order to ensure that the complete value of the overall pool can be retained by the indexing as proposed. As I understood it, this recoupment process for the retention of value is said to require, as an essential underpinning element, the retention of the indexation formula as it appears in the plan.
4. These are discussed below.

The absence of a review of the plan

1. There are several things that are clear about the present status of the Contributions Plan and the absence of a completed formal review of it. It is, in this context, appropriate to note several factors I consider are required to be taken into account when assessing Mr Ireland's submission on this point. They may be stated succinctly: 1. First, the Contributions Plan commenced in late November 2010 so the anticipated five-year period triggering consideration of the desirability of reviewing the Contributions Plan only commenced, effectively, at the beginning of December 2015, and there is Mr Brindle's evidence that work on an internal examination of the plan is under way; 2. The terms of the element of the Contributions Plan itself, set out earlier in this section, make it clear that the intention to review the plan is cast in aspirational terms and is certainly not intended to be regarded as some form of binding obligation. Viewed this way, in the context that these proceedings were commenced on 24 November 2015, an expectation that a review of the plan might have been completed between early December and the date of the hearings of these proceedings might well be regarded as optimistic and (although this is not the case) excusable had there been some more formal undertaking embodied in the plan concerning the period for review; and 3. Finally, on this point, as Mr Robson pointed out, the Contributions Plan is a sophisticated plan developed through the required statutory consultation processes. Adoption of any changes to the plan after a review of it will need to go through a similar consultation and adoption process and, given the complexity of this Contributions Plan, it is not reasonable to expect that the internal review process to prepare for the necessary following public process (if the internal review demonstrated the desirability of triggering that process) could be undertaken in any truncated time period.
2. For these reasons, I have concluded that there is no valid basis why I should conclude that the failure to have undertaken a review of the Contributions Plan provides any (let alone sufficient) support to warrant establishing any Rose Consulting-style reasonableness trigger for interfering with the indexation approach set by the Contributions Plan or any other aspect of the substantive costings' elements called into question by the Lawson Clinic in these proceedings.
3. I also observe, in passing as it were, that it might have been reasonable to infer that the nature of the issues flagged by the commencement of, and pleadings for, these proceedings, by themselves, have caused some pause in whatever internal processes of review may have commenced and a desire to await the outcome of these proceeding as an element of the review process. That is made as an observation but, as there was no evidence from Mr Brindle on this point, nor a submission by Mr Robson that I should draw this inference, I wish to make it expressly clear that I have not done so.

Introduction

1. The EP&A Act gives the Court the power to vary a contribution to be exacted pursuant to a contributions plan, a power which is not given to the Council (unless, as was dealt with in Lawson (No 1) at [14]), there is some specific power in circumscribed instances where the Contributions Plan itself makes such provision. The statutory provision giving this power to the Court is not a circumscribed one, as can be seen from its terms: 94B Section 94 or 94A conditions subject to contributions plan … (3) A condition under section 94 that is of a kind allowed by a contributions plan (or a direction of the Minister under this Division) may be disallowed or amended by the Court on appeal because it is unreasonable in the particular circumstances of that case, even if it was determined in accordance with the relevant contributions plan (or direction). This subsection does not authorise the Court to disallow or amend the contributions plan or direction.

A surplus to be redistributed?

1. I turn, first, to consider the question of aggregation of the costs of the works within the Gordon Town Centre. Mr Brindle, in his written evidence, explained why he considered it reasonable that the pool of money to be available to Council for works to be constructed pursuant to the Contributions Plan, and the acquisition of land for that purpose for the Gordon Town Centre, should be regarded as a composite, total sum rather than one appropriate to be dissected in the fashion proposed by Mr Ireland. His description of this was in the following terms: On the other hand the cost of constructing Bean Farm Road, the completed link between McIntyre and Dumaresq Streets was $1,930,044 compared to the amount estimated by the QS at the time for the construction of the road in the work schedule of $826,901. Given known slope and drainage issues affecting the link between Dumaresq and Moree Streets, which is currently in early design stage, Council is expecting construction costs for this link to be significantly higher than the $713,703 allowed for in the contributions plan. It is envisaged that there would be various "swings and roundabouts" during the implementation of the plan with some works coming in under estimates and some over. It would be impractical to amend the plan every time a property was purchased or a work was completed to reflect actual rather than estimated costs.
2. Although pressed on this point by Mr Ireland, whilst in the witness box, Mr Brindle strongly defended this aggregation approach, relying, particularly, on the actual cost of construction of the Bean Farm Road being more than double that which had been anticipated when the Contributions Plan had been prepared. He indicated that he considered it not unreasonable to expect that the second, linking road in this overall package of traffic management works will also cost significantly more than had originally been allowed for in the plan and that it would be not unreasonable to anticipate that there might not be any surplus arising from the Gordon Town Centre traffic-related works' pool once it had been completed.
3. As I have earlier indicated, I found the way Mr Brindle gave his evidence provided an appropriate basis for me having, in the absence of compelling contradictory evidence (and there is none on this point), confidence in the opinion that the expressed. On this point, I am satisfied, on the basis of the written and oral explanations, that it is open to me to conclude that there is no certainty that there will be any surplus from this pool of money, let alone a significant one warranting redistribution.

A surplus to be applied to extra works

1. I now turn to the question of what is to happen, if this conclusion is incorrect and there is to be some surplus generated from the Gordon Town Centre traffic works' pool after the completion of all works proposed to be funded from that pool. On this point, the Contributions Plan provides a framework for dealing with this contingency. It does so at 5.12 (Exhibit B, Tab 1, folios 194-195) in the following terms: 5.12 Facilities not included in this Contributions Plan There are many works which should be provided as part of the new development in Ku-ring-gai which have been excluded from this Contributions Plan in the interests of maintaining a reasonable contribution rate. It is also recognised that, in the case of works to the transport network, more than any other work, there is opportunity for assistance from the State or Federal Government which may arise without warning after the adoption of this Contributions Plan. A recent example is the offer of State Government funding for transport interchanges at railway stations which resulted in the removal of these works programme items from the future works programme. Additionally, there is scope for some additional works to be funding arising from the essential land acquisition programme detailed in 5.3 Local Roads: New Streets. For these reasons, this section details an additional works programme which consists of works which are considered important to the functionality of the town centres and are justifiable under nexus requirements but which cannot be incorporated in this Contributions Plan in the interests of achieving a reasonable contribution rate. These are works which Ku-ring-gai Council aims to fund through general revenue and/or through grant money. Alternatively, in the event that any works that are included within the Local Roads area are funded by an alternate mechanism, or if additional funding is generated as part of the process of managing and implementing the works programmes, then these works will be instigated as a first priority. The key works deleted from this Contributions Plans in the interests of maintaining a reasonable contribution rate are as follows: … Gordon • Moree Street works to provide an additional civic area; • One new street between Moree Street and Dumaresq Street; • One new pedestrian way between Pacific Highway and Fitzsimmon Lane; and • Streetscape works involving permeable pavers and stormwater harvesting.
2. As can be seen, these provisions of the Contributions Plan anticipate that there may be surpluses from one or more of the individual pools of money expected to be aggregated for the various nominated tranches of facilities for works within the scope of the plan. The Contributions Plan itself identifies, in terms set out above, that there were works that had been identified as being otherwise appropriate to be incorporated within the plan but which were not so incorporated in order to ensure that the contributions to be exacted pursuant to the plan were considered to be reasonable rather than inappropriately burdensome upon the developments from which the contributions would be exacted.
3. This, it is to be observed, is an entirely reasonable and proper approach to take in the development of such a plan.
4. However, it is also reasonable and proper to provide, within the plan, that, if there are surplus funds generated from one or more of these pools, there be a contingent reserve of works to which the Council could give consideration to their allocation, depending on the amount of money so available.
5. In this instance, although there is no satisfactory basis upon which I could conclude that there would be such a surplus arising from the pool proposed to fund the Gordon Town Centre works, there are identified, in the above extract, works specifically relating to the Gordon Town Centre, including one additional new road of the specific type proposed to be funded from the pool to be exacted pursuant to the anticipated business development proposals within the catchment determined to fund such works within the Gordon Town Centre.
6. This provision of contingent arrangements in the Contributions Plan for the use of any surplus funds with the terms of the Contributions Plan is entirely consistent with general practice in the preparation of such plans and within the power of the Council to do so.
7. I am satisfied that it is an appropriate response to the possibility that there might be such surpluses. There is no proper, reasonable basis to depart from the plan on this point and certainly no reason that would lead to the conclusion that the Lawson Clinic proposal should be the beneficiary of some redistributive process as an alternative to adherence to the plan. This is particularly so in circumstances where the Lawson Clinic has not availed itself of the opportunity to provide any further information that might, conceivably, provide a basis for any claimed public benefit discount (a claim that was dealt with and rejected in Lawson (No 1) on the basis of the complete absence of any proper evidence to found such a claim).
8. The appropriateness of preserving this provision of the Contributions Plan for dealing with any surpluses should they eventuate is, in itself, an appropriate basis to reject Mr Ireland's proposal that some portion of such a hypothetical surplus should be redistributed to the Lawson Clinic in anticipation that such a surplus would arise in actuality.

Indexation - retention of contributions value

1. Finally, I turn to the question of what might be summarised as drawdown and retention of value of funds across the aggregated pool of funds provided for by the Contributions Plan. I have earlier summarised, briefly, the pooling process by which a council can anticipate the collection of funds from contributions pursuant to the Contributions Plan in order to undertake works that the Council considers have sufficient priority to warrant them being dealt with in anticipation of the collection of funds for them otherwise provided for in the Contributions Plan. Such anticipatory funding can either come from the aggregated pool of moneys collected pursuant to the Contributions Plan or can come from other funds held by the Council from its general revenue. Although Mr Ireland also pointed to the fact that the Contributions Plan also notes that it is possible that government grants may be made to assist with the funding of such works (Section 3.27, Exhibit B, Tab 1, folio 136), there is no concrete evidence in these proceedings that that plays any significant role with respect to the range of works proposed to be funded in the Gordon Town Centre traffic management package.
2. On this point, Mr Brindle said in his written evidence: It is clear that significant contributions over the period of the plan remain to be collected as development occurs in the future and consequently Council has funded acquisitions through pooling funds and borrowing internally within the fund with the moneys to be paid back at a rate that will keep pace with increasing cost. This has enabled the early provision of works rather than waiting until the funds are collected. The plan proposes monitoring and reviews of the plan in areas such as building and population growth, assessed demand, income and expenditure, land values and construction costs and cost of works in the work schedule. At the next review of the plan, implemented works will be reviewed and considered as costs to be recouped or removed once the cost of the internal borrowing have been repaid depending on the financial analysis.
3. In these proceedings, there is no evidence as to how much money has been collected toward the pool for the Gordon Town Centre traffic management package, nor is there any evidence as to how much of the works within this package that have been completed, such as Bean Farm Road, have been funded by contributions already exacted for this purpose or the extent to which those works may have been funded in the anticipatory fashion described above.
4. The indexation basis provided for by the two indexation streams identified in the Contributions Plan, as earlier set out, not only have the function of accumulating funding within a pool to meet the anticipated cost of works to be funded from that pool but also provide the basis upon which the various amounts actually expended, if drawn down from other parts of the broader Contributions Plan pool or from Council's general revenue, can have their value maintained so that: 1. If drawn down from funds within the pool, that value is maintained for later application to the elements of the pool from which they were drawn down; or 2. The value of the general funds of the Council are maintained and not otherwise diminished because the Council has determined it is appropriate to give particular priority to an aspect of the works provided for in the Contributions Plan that the Council considers warrants realisation in anticipation of the collection of funds that would provide for it.
5. Such a process of value preservation being supported by the dual stream indexation methodology is both fiscally conservative and appropriately prudent in order to ensure that the Council has a proper basis for maintenance of funding values, whilst being invested with the flexibility to adjust the priorities for implementation of the plan. There is nothing inherently unfair in this approach, quite the contrary position applies.
6. The validity of the desirability and appropriateness of maintaining the dual indexing stream is, in itself, sufficient to reject the submissions made on behalf of the Lawson Clinic on this point.
7. In addition, although it is not necessary to rely on this aspect of this point, as I have earlier observed, the persuasive burden in seeking an outcome as is proposed in these proceedings falls on the Lawson Clinic. It has not sought to provide any evidence as to what has been the extent of contributions collected in the Gordon Town Centre traffic management pool as opposed to speculating as to what might be the position to draw (but is not relied upon to support the drawing of) the various conclusions that I have dealt with in rejecting the proposition that it would be reasonable to alter the indexation basis as sought.

Conclusion on reasonableness

1. The Court of Appeal's decision in Rose Consulting explained why this discretion to vary was to be exercised in a constrained fashion, one based on concluding, on a proper evidentiary basis, that on the facts and circumstances raised on a particular application for variation to a contribution, it was reasonable to depart from the provisions of the plan.
2. I have earlier dealt with the bases upon which it is said that such departure is appropriate for the Lawson Clinic's proposed facility. The sole basis on which I have held, and potentially provides a basis for this to occur, is the revised traffic generation factor agreed to by Mr Pindar and Mr Piccoli as being appropriate for use to derive a vehicle movements per 100 square metres' factor for this proposed facility to be contrasted with that of two vehicle movements per 100 square metres as provided for in the in the Contributions Plan for "business premises" in the Gordon Town Centre.
3. Mr Ireland's written outline of closing submissions said: Mr Brindle and Mr Kerr agree that proportionally reducing the contribution to reflect the reduced level of trip generation as compared to the 54 derived from the 2 trips per 100 m2 figure is a reasonable approach.
4. I accept this general submission for the earlier articulated reasons.
5. Applying the 20 vehicle movements per hour rate agreed upon by Mr Pindar and Mr Piccoli to this proposed development derives a rate approximately half of that set as appropriate in the Contributions Plan itself.
6. This difference is so much more than trifling that I am satisfied it is reasonable, in a Rose Consulting sense, to adopt that new rate as appropriate to be applied to the Lawson Clinic's proposed facility rather than exacting a contribution based on the formula adopted by the Contributions Plan as appropriate for business development in the Gordon Town Centre.

Conclusion

1. For the reasons I have earlier set out, I am satisfied that four propositions apply with respect to the contribution to be exacted from the Lawson Clinic pursuant to the Contributions Plan. These are 1. First, the basis for deriving a vehicle movement-based factor for calculating the contribution is to be that derived from the vehicle movement rate adopted as the conservative, agreed vehicle movement rate set out on page 3 of the Joint Expert Report of Mr Pindar and Mr Piccoli; 2. There are three, separate, equally valid bases for rejecting the proposition that the indexation formulae set out in the Contributions Plan should be varied, with each of three bases being sufficient in their own right to reject the proposition; 3. There is no valid basis, because of the absence of review of the contributions, to conclude it is reasonable to adjust the contributions to be exacted from the Lawson Clinic; and 4. Finally, the extent to which the traffic generation factor to be applied to the indexed rate from the 2010 base contribution differs sufficiently from the factor adopted in the Contributions Plan that it is reasonable, in the sense used in Rose Consulting, to require the application of the rate agreed by the traffic experts as the factor to be applied in calculating the contribution to be levied on the Lawson Clinic.
2. As this conclusion will require, effectively, a complete redrafting of cl 33 of the consent and, arising from the earlier set out agreement concerning condition 72, this condition will also need to be redrafted, the parties are to settle the agreed terms of orders to give effect to this decision, with those orders to be provided to me, in settled terms, by e-mail to my Associate by Friday 17 June 2016.
3. If so provided, I will make orders in chambers to give effect to them.
4. If the parties are unable to agree, they are to provide their alternative drafts to my Associate by that date, indicating whether they wish to be heard or whether the matter can be dealt with on the papers. If there is disagreement and it is to be dealt with on the papers, the parties may provide written submissions not exceeding two pages in length (Arial, 12-point) as to why their preferred version of condition 33 and/or condition 72 should be adopted. The length limit for such written submissions is to encompass submissions on both conditions, not separately on each condition.

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