Valiant Timber and Hardware Co. Pty Ltd v Blacktown City Council [2005] NSWLEC 747 | Case summary

(iv) in the exercise of its discretion the Court would refuse the modification the application. 6 Somewhat unusually for class 1 proceedings the Council has filed Points of Cross-claim and the Applicant has responded by filing Points of Defence to the cross-claim. 7 Since by consent of the parties the hearing has initially been confined to the question whether the Court is vested with the power in these proceedings to impose an obligation on the Council to acquire land, I need not further elaborate on the other issues raised in the proceedings other than to note that the Applicant's response to the Council's claim of estoppel against the Applicant is its claim that there had been an "in principle" agreement between the parties that the Council would purchase at full market value the land required for on-site stormwater detention. 8 Although the Applicant freely consented to initially confining the hearing to the consideration of the question of power in its later written submissions, it has expressed some reservation on the wisdom and utility of this agreed and adopted course. However, since the reservation falls short of withdrawal and the question (being a pure question of law) having been so fully argued by the parties, I think that it is entirely appropriate that I determine it as a preliminary issue. If the determination is that there is an absence of available power vested in the Court then the proceedings need go, and cannot go, any further. On the other hand, if it is held that there is a source of available power then the further hearing of the case on its merits can proceed on the remaining issues in dispute. B. THE RELEVANT DEVELOPMENT CONSENT 9 The relevant development consent was granted on 27 April 1998 as a "deferred commencement consent", but that fact is not relevant for present purposes. 10 The development consent imposed a number of conditions (in addition to the deferred commencement conditions). Relevantly for present purposes those conditions included Condition 3 requiring the payment of monetary contributions pursuant to s 94 in respect of (i) open space; and (ii) tree planting and condition 7 which required "compliance with the engineering requirements at "Attachment A" (a five page typescript). 11 Whereas a copy of Attachment "A" is annexed hereto, it will be helpful to recite Condition H (which is the condition sought to be modified in the present case by the inclusion of one additional sentence) and related Condition L. They provide as follows: H. On-site Detention of Stormwater runoff from the site must be provided with a minimum site storage requirement of 835m3 and a permissible site discharge of 142L's. These figures may vary slightly depending upon the final land area required for Council's Stormwater retention basin and the resultant area left for development. The design of this system is to be in accordance with the Upper Parramatta River Catchment Trust current handbook. Restrictions and/or positive covenants must be provided over the storage area and outlet works to Council's requirements. Standard format available in the current Upper Parramatta River catchment Trust Handbook. Designs must be submitted to and approved by the Development Services Engineer prior to issue of the building permit and construction must be completed prior to commencement of building construction. Detention systems within courtyard areas must be designed so they do not impact on the amenity of the development. NOTE (i) In the event that it is not practical or desirable to provide the total of 835m3 of storage required within the body of the development it will be necessary to utilise the area set aside for Council's stormwater retention basin(as shown on plan 918-DA01 Issue C) to achieve the required storage. This area can only be utilised to a maximum volume to be determined in conjunction with Council. (ii) Storage of stormwater within the above basin for the future Retail/Commercial Development fronting Flushcombe Road will not be permitted unless surplus storage volume (in excess of Council's requirements and that required as a result of Note (i) above) can be identified and agreed with Council. L. A restriction as to user/positive covenant over the area set aside for the Stormwater Retention Basin is to be created under Section 88 of the Conveyancing Act generally in the following terms. i. The owner shall maintain in perpetuity all aspects of the area such as turfing, approved recreational infrastructure and approved landscaping. ii. Council shall maintain the drainage infrastructure (excluding those items in I above) from the date of utilisation of the system for Council purposes (i.e. Council will not maintain this area whilst it is only used for providing storage for the residential development). iii. The covenant to enable the unrestricted entry of Council for future construction and maintenance works which will be required for the building/upkeep/expansion of the Stormwater Retention Basin. NOTE: The final wording of the recital of the restriction/covenant is to be to Council's satisfaction. 12 In the result, the development consent as modified from time to time hitherto authorises the development on the development site of 107 dwellings. The subsequent subdivision of the development site into two lots - lot 42 (comprising 1.427 hectares) and lot 43 (comprising 3434 square metres) - has seen the accommodation entirely within lot 43 of the drainage and stormwater detention system. That lot has been developed by the Council constructing that system. The larger lot 42 is not developed. It is this lot that is proposed to entirely accommodate the approved residential development (including its on-site open space). C. THE DISPUTED QUESTION OF THE COURT'S POWER 13 The Council argues that there is no power vested in the Court to modify the development consent in the manner sought in these proceedings. In particular, the Council relying upon the decision of Pain J in Lean Lackenby and Haywood Liverpool Pty Ltd v Baulkham Hills Council (2003) 137 LGERA 1 submits that there is no available power (including the power conferred by the EP&A Act, s 80A) to impose a condition on the grant of development consent compelling the acquisition of land by a council. (It is the Council's analysis of the Applicant's modification application that that is the ultimate effect of the modifications sought.) 14 Lean Lackenby involved the preliminary determination of questions of law raised in an appeal to this Court against the Council's refusal of a modification application to delete a condition of a development consent and to substitute a different condition. 15 The relevant condition of development consent was in the following terms: 24. Arrangements for Transfer of Land to Council The transfer to Council of proposed Lot 66 for overland flow/detention basin purposes. The area of land required for the detention basin including any supporting structures or access for maintenance is to be dedicated to the Council at no cost. 16 The substitute condition proposed by the modification application was in the following terms: 24. The applicant is to enter forthwith after registration of the plan of subdivision into negotiations with Council for the sale by the registered proprietor and purchase by Council of Lot 66 at the market value of that allotment determined in accordance with the definition of market value set forth in section 56 of the Land Acquisition (Just Terms Compensation) Act 1991. If within three months of such negotiation a price has not been agreed upon between the registered proprietor and Council, the parties may agree to a further period of time for negotiations. If agreement is reached, Council will purchase the land without delay. In the event that agreement is not reached within three months or within such further period as may be agreed as aforesaid, Council will promptly acquire Lot 66 by compulsory process for the purpose of open space or drainage or both pursuant to the provisions of the Land Acquisition (Just Terms Compensation) Act 1991. 17 The first question of law was whether the existing condition was valid (it being common ground that the condition was not in accordance with the relevant contributions plan). 18 Her Honour held (at par 8) that the EP&A Act, s 101 operated to preclude the raising of that question of law (because it questioned the validity of the consent). 19 The second question of law was whether (assuming that the modification application were granted) the proposed substitute condition would constitute a valid condition of development consent. Her Honour held (at par 15) that it would not be a valid condition. 20 The reasons for that determination are found in the following passages at paragraphs 11 to 14 inclusive: Despite the suggestion in the Applicant's submission that this section imposes duties on the Applicant because it requires the Applicant to enter into negotiations, it is abundantly clear that the aim of this new proposed condition 24 is to impose a responsibility on the Council to acquire lot 66 at an agreed price or by compulsory process. The Applicant argued that this condition was not imposed on the basis of any power under s 94 of the EP&A Act, but rather, was able to be imposed under s 80A of the EP&A Act because it concerned a planning issue in that it arose by virtue of public interest considerations as provided for in s 79C of the EP&A Act. The Applicant submitted that the proposed condition satisfies the Newbury test, as promulgated in Newbury District Council v Secretary of State for Environment [1981] AC 578, in that it: (1) is for a planning purpose; (2) fairly and reasonably relates to the development; and (3) is not so unreasonable that no consent authority would have imposed it. The situation arose, according to the Applicant, because the land which would be acquired if the new condition 24 was implemented was the same land considered in the s 94 contributions plan as intended for public acquisition, and in relation to which condition 32 had been imposed. Condition 32 requires the Applicant to pay a contribution which contribution includes an allowance for the payment of the land. The Applicant also stressed the reference in the proposed condition 24 to the Land Acquisitions (Just Terms Compensation) Act 1991 (NSW) was simply to ensure that there was a mechanism to enable the parties to proceed with the acquisition in the event of there being no agreement reached between the parties as to the price. The Applicant is correct in pointing out that the power to acquire land is not provided for under the Land Acquisitions (Just Terms Compensation) Act per se, but rather, that that Act provides a mechanism for acquisition procedures. In this respect, the Council's submissions were wrong in that these stated that the power to acquire land is contained in the Land Acquisitions (Just Terms Compensation) Act. Of greater relevance is the fact that, as the Council correctly submitted, the EP&A Act contains no power to enable the acquisition of land by the Council. The only relevant provision could be s 94(1)(a) of the EP&A Act, which provision concerns the dedication of land free of cost. The proposed new condition 24 provides for the compulsory acquisition by the Council at an agreed price or the market value under the compulsory acquisition process. The Council's power to acquire land is, in fact, identified in s 186 of the Local Government Act 1993 (NSW). I agree with the Council that, as there is no power in the EP&A Act to enable the acquisition of land, there can be no basis on which the amended condition 24 could be imposed by this Court under s 80A of the EP&A Act. Although the Applicant was at pains to stress that the condition was not imposed pursuant to s 94, but rather, to enable the Council to perform its planning functions, I do not accept the characterisation of this condition in that way. I do not consider that this proposed condition is for a planning purpose satisfying the Newbury test. I agree with the Council's submission that s 39(2) of the Land and Environment Court Act 1979 (NSW), which affords to this Court the powers of the Council in determining an appeal, would not enable the Court to be seized of jurisdiction to impose the conditions sought by the Applicant in the proposed condition 24. I accept the Council's submission that this issue goes to the jurisdiction of the Court to consider the proposed condition 24 as a s 96 modification application. It is not, as the Applicant urged, a matter of whether that condition is unreasonable or not to be determined on the merits. 21 The Council submitted that the modifications sought by the Applicant in the present case were "in substance" the same as the proposed substitute condition in Lean Lackenby. Presumably this submission was advanced in order to secure the more ready application to the facts of the present case of that decision particularly in holding that the EP&A Act, s 80A did not empower the imposition of the proposed substitute condition. 22 Having thus secured or fortified its argument that s 80A was not an available source of power to sustain the grant of the Applicant's modification application, the Council's argument next addressed the potential source of power conferred by s 94 of the EP&A Act. However, since the proposed modifications would not result in a condition requiring either the dedication of land free of cost or the payment of a monetary contribution (rather, it would provide for the transfer of land in lieu of the payment of monetary contribution) the Council submitted that the power conferred by s 94 was not available to sustain the grant of the Applicant's modification application. 23 An alternative argument advanced by the Council was to the effect that if the modification application was in substance seeking to prescribe a different method of compliance with Condition 3 imposing the s 94 monetary contribution (namely by the transfer to the Council of ownership of lot 43, offsetting the payment of the s 94 monetary contribution) there was no power to achieve that objective. 24 The Applicant's competing argument (i) distinguished Lean Lackenby on its facts from the facts of the present case; (ii) relied upon s 80A as an available source of power; (iii) relied upon the provision of s 94 as an alternative source of power; and (iv) relied upon s 96 as conferring a beneficial and facultative power. 25 In its written submissions in reply the Council accepted that the power conferred by s 80A may in a given case require the dedication of land but submitted that on the facts of the present case, the requirement for land to accommodate drainage and detention basin system exceeded the requirement that could reasonably be related to the approved development. (It is common ground that the drainage system caters for a much larger catchment than the development site). Next, the Council submitted that the s 94 power was not available because the Applicant could not point to any "material public benefit" as that term is applied in s 94(5) and s 94(6) as currently in force. Finally, the Council submitted that the present case was "on all fours" with Lean Lackenby. D. ADJUDICATION ON THE DISPUTED QUESTION OF POWER 26 In my judgment, the competing arguments have unduly focussed attention upon the provisions of the EP&A Act, ss 80A and 94 as providing the potential source of power (leading to excessive legal disputations) when the vital question is far more readily and satisfactorily answered by reference to the obvious source of power that is conferred by the EP&A Act, s 96. 27 Section 96 confers three separate powers to modify a development consent - (i) subsection (1) confers the power "to correct a minor error, misdescription or miscalculation"; (ii) subsection (1A) confers the power if the consent authority is satisfied, inter alia, that the proposed modification is of "minimal environmental impact"; and (iii) subsection (2) confers the more general and widely based power. In each case the same verbal formulation of the relevant power is adopted, namely "to modify a development consent". 28 The statutory modification power has been held to be "beneficial" and "facultative" (Houlton v Woollahra Council (1997) 95 LGERA 201); and "free standing" North Sydney Council v Michael Standley and Associates Pty Ltd (1998) 97 LGERA 433. 29 More relevantly, for present purposes it has been held that any constraints on the modification power are found in the section conferring the power and are not derived from other provisions of the EP&A Act: see Valhalla Cinemas Pty Ltd v Leichhardt Municipal Council (1986) 60 LGRA 240. 30 The statutory modification power has been held to be available even though the relevant planning law has been changed between the original grant of consent and the making of the modification application: see Michael Standley at 445 and cf Consumo Pty Ltd v Fairfield City Council (2003) 126 LGERA 103 applying the earlier decisions in Valhalla and Houlton. 31 Accordingly, the true question concerning the Court's power to grant the Applicant's modification application is to be answered by reference to the ambit of s 96 itself and it is simply not to the point to enquire whether the effect of the granting of that application would involve the imposition of a condition of development consent which would be invalid (because for example the available power conferred by the EP&A Act, ss 80A and 94 to impose conditions on the grant of development consent would not in a particular case authorise or sanction the imposition of such a condition). 32 In this vital respect, I find myself in respectful disagreement with the decision in Lean Lackenby. In my respectful opinion, the question determined in that case did not reflect the true question of power that was raised in that case, namely the power to grant the modification application. 33 That the answer to that true question is to be found in the language and ambit of s 96 is mandated by the consistent line of judicial authority commencing in 1986 with the decision in Valhalla Cinemas. 34 That result is reinforced by the operation of s 96(4) which provides as follows: The modification of a development consent in accordance with this section is taken not to be the granting of development consent under this Part, but a reference in this or any other Act to a development consent includes a reference to a development consent as so modified. 35 In this respect, it is important to appreciate that the imposition of a condition of development consent pursuant to the power conferred by the EP&A Act, ss 80A or 94 is an incident of the exercise by a consent authority of its function to determine a development application: see s 80(1) which provides as follows: A consent authority is to determine a development application by: (a) granting consent to the application, either unconditionally or subject to conditions, or (b) refusing consent to the application 36 The exercise of the statutory modification power may often take the form (as in the present case) of an express amendment being made to a condition of development consent or by deleting a condition with or without the substitution of a replacement condition. However, it is vital to appreciate that where that result occurs, it does not involve the exercise of the power under s 80A or s 94 to impose conditions on the grant of development consent. Rather, it is the direct result of the exercise of the statutory modification power. 37 Of course, any such result must be within the scope or ambit of the statutory modification power, which is to say that it must result in the "modification" of a development consent (where the essential meaning of the verb "modify" is "to alter without radical transformation": see Michael Standley at 439 per Mason P). 38 None of the wide ranging competing arguments advanced in the present case have addressed this question, because for whatever reason, they were distracted from focussing upon s 96 as the true source of relevant power. 39 That being so, it will be sufficient for the purposes of determining the disputed question of power, for me to hold, as I do, that prima facie the modifications sought in the present case involve, inter alia, (a) the modification of Engineering Condition H by including the additional sentence; and (b) the modification of Condition 3 by deleting that condition and substituting a replacement condition. I emphasise that this decision is that relevant power exists, and not how that power should be exercised in the present case. 40 For all the foregoing reasons, I hold that the Court is vested with the requisite power (sourced exclusively in s 96) to grant the Applicant's modification application, subject of course to compliance with the relevant requirements of that section. 41 In so holding, it does not necessarily follow that the matters that have been raised by the Council's argument suggesting the non-availability of the powers conferred by s 80A or s 94 to sustain the result sought to be achieved by the modification application (upon the assumed invocation of those powers) are altogether irrelevant in the proceedings. Although they are undoubtedly irrelevant to the question of power, they may be relevant to the question of discretion relating to the exercise of the power: see Progress and Securities Pty Ltd v North Sydney Council (1988) 66 LGRA 236. In making this observation, I am not to be taken as expressing my agreement with the arguments advanced by the Council in respect of the power to impose conditions conferred by ss 80A and 94. The force of the Council's argument is considerably diminished by the decision of the Court of Appeal in Fairfield City Council v Olivieri Pty Ltd (2003) NSWCA 41 according a generous scope and ambit to, and application of, the s 80A power while adopting a strict view of the relationship between that power and the s 94 power: see also the very recent decision of the Court of Appeal in Maitland City Council v Anambah Homes Pty Ltd (2005) NSWCA 455 where the principal focus is on s 94. E. CONCLUSIONS AND ORDERS 42 For all of the foregoing reasons, I make the following orders -

Valiant Timber and Hardware Co. Pty Ltd v Blacktown City Council

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