2 Application P3075/2003 is refused and no declarations are made.

Mr P Connor of Counsel, instructed by Minter Ellison. He called as a witness:

* Anthony Joseph Grech, Senior Design Engineer, Wyndham City Council

1 Application P1864/2003 is an application for review of a special charge scheme for the construction of Russell Street Service Road, east of Lock Avenue, Werribee pursuant to section 185 of the Local Government Act 1989 on the grounds that:

a The works and projects or the period of maintenance for the purpose of which the special rate or special charge was imposed are not or will not provide a special benefit to that person.

b The basis of distribution of the rate or charge amongst those persons who are liable to pay it is unreasonable.

c The works and projects proposed for the construction of a road on the land are unnecessary, unreasonable, excessive, insufficient, unsuitable or costly, having regard to the locality or environment and to the probable use of the road.

2 Application P3075/2003 is an application for declaration pursuant to section 185AA of the Local Government Act 1989 for declarations that:

a The decision of the Wyndham City Council to declare a special charge for the construction of the Russell Street Service Road east of Lock Avenue, Werribee ("the special charge") set out in a resolution dated 30 June 2003 is invalid.

b The Notice dated 2 July 2003 which purports to impose the special charge is invalid, and the decision of the Council to impose the special charge by way of that Notice is invalid.

3 The applicant, C E Wakefield, is a part owner of Lot 7 Russell Street, Werribee. In total Ms Wakefield has a 2/3 share in the property.

4 Lot 7 Russell Street, Werribee has an area of 2.47 ha. Along Russell Street are a series of lots which were subdivided as part of plan of subdivision 145933B. Lot 7 has a frontage to Russell Street by means of an area which resembles in width one of these lots. The frontage to Russell Street is 26 metres, which includes a splay at either corner. However, the bulk of the area of Lot 7 sits at the rear of these lots.

5 Lot 7 also has an extensive frontage to Lock Street of 112.21 metres. This frontage is largely occupied by an existing brick factory. The balance of Lot 7 is vacant land used for industrial storage.

6 Lot 7 and the other lots fronting Russell Street are in an Industrial 3 Zone in the Wyndham Planning Scheme. Apart from Lot 7 all the other lots are used for industrial or industrial sales type uses. The properties in the special charge scheme are located on the south side of Russell Street. Land on the north side of Russell Street is in a Residential 1 Zone and developed for residential purposes.

7 The carriageway of Russell Street is a constructed bitumen road. However, the service road area in front of the properties which are included in the special charge area is unmade. At present it is an informal, pot-holed area used for both parking and access to properties but with no parking bays or access lanes clearly defined. It is muddy in winter and dusty in summer. There is a row of substantial eucalyptus trees at the edge of the service road between it and the main carriageway of Russell Street.

8 These applications involve a decision of the Wyndham City Council to impose a special charge for the purposes of the construction of a service road in Russell Street, Werribee, east of Lock Avenue. The properties included in the special charge are all the lots in plan of subdivision 145933B, although it is noted that there has been further subdivision of some of the original lots and a part of Lot 7 has been excluded, which contains the factory and fronts Lock Avenue. The proposed works include:

* The construction of the service road within the road widening strip along the south side of Russell Street, east of Lock Avenue.

* A sealed granular pavement with a thin asphalt wearing course 10.9 metres wide, consisting of a through lane and angled parking bays.

* Drainage facilities connected to the existing underground drainage system in Russell Street.

* The grading and shaping of the separator and associated landscape works.

* The construction of footpath within the separator (Council funded).

9 The special benefits of the works as proposed in this special charge are stated to be:

* Provide additional parking facilities to the properties.

* Enhance the visual amenity of the area on the south side of Russell Street, east of Lock Avenue.

* Enhance the desirability of the properties for development.

10 It is proposed that the special charge apply for a period of 10 years. The apportionment method is based on the site values of the properties that derive a benefit. The approximate cost is $197,694. The apportionment cost with respect of the subject property, which is known as 3-19 Lock Avenue, is $72,302.92. Only the vacant part of Lot 7 has been included in the apportionment; ie the portion of the land fronting Lock Avenue on which the existing factory is located has been excluded.

11 By contrast, the costs apportioned to other lots fronting Russell Street range between $14,064.40 - $17,828.12. For lots which have been further subdivided, the apportionment costs range between $7,527.43 - $10,096.87.

12 Wyndham City Council resolved to declare the special charge pursuant to section 163(1) of the Local Government Act 1989 for the construction of the Russell Street Service Road, east of Lock Avenue, Werribee on 30 June 2003. On 2 July 2003 it sent notice to the property owners advising them of Council's declaration and the option to lodge a submission to the Victorian Civil and Administrative Tribunal.

13 There had been an earlier decision by the Council in April 2003 on the special charge scheme but this was invalid due to the Council not having considered the full submissions received. Subsequent to the application for declaration lodged in P3075/2003 challenging the validity of the notice given by Council on 2 July 2003, the Council sent a further notice to property owners on 1 July 2004.

14 The grounds upon which a person may apply for review of a special charge are set out in section 185(2)(b) of the Local Government Act 1989. The first of those relied upon by the applicant in this case is the ground in section 185(2)(b)(i) namely that:

(i) the works and projects or the period of maintenance for the purposes of which the special rate or special charge was imposed are not or will not provide a special benefit to that person;

15 The leading authority on the nature of "special benefit" is the decision of the High Court in City of Paramatta v Pestell [1972] HCA 59; (1972) 128 CLR 305 where Gibbs J said at page 327:

A work is of special benefit to a portion of a local authority area if the lands comprising that portion derive from the work a benefit which is not shared by other lands or a benefit which is additional to, or greater than, that which is derived by other land.

16 Although Mr Tweedie sought to argue on behalf of the applicant that the properties on the north side of Russell Street would benefit just as much from the works as the properties on the south side of Russell Street, and hence there was no "special" benefit to properties on the south side, I do not agree. I consider there will be a benefit to properties on the south side of Russell Street that will be different to any benefit which may be derived from properties on the north side of Russell Street. Properties on the south side of the street will be provided with a sealed, all weather access road along their frontage instead of the muddy, pot holed, unsealed access road which exists at present. This will not benefit properties on the north side of the street, which already have a sealed, all weather access road in front of them. Properties on the north side of the street may enjoy an improved visual outlook by reason of the works but this benefit will be enjoyed to an even greater extent by properties on the south side of the street. There are other benefits that the properties on the south side of the street will also enjoy exclusively such as improved parking facilities.

17 I therefore find that the works for the purpose of which this special charge was imposed will provide a special benefit to the properties within the scheme.

18 The special benefits of the works proposed, which have been identified in all the Council reports and communications with property owners, are set out above in paragraph 9. The special benefits do not include improved traffic access to the properties or improved traffic functioning or carrying capacity of the service road.

19 The nature of the special benefits are elaborated upon in the various reports to Council under the headings of `environmental implications', `social implications' and `economic implications'. Again, none of these refer to the traffic carrying capacity of Russell Street or refer to future traffic volumes that might be expected to be generated by the land or any of the individual parcels, especially Lot 7 which is the only undeveloped parcel remaining. Rather, the emphasis is placed on enhancing the visual amenity of the properties and surrounding area. Comments in the reports include:

"The construction of a service road within the road widening strip will enhance the amenity of the industrial properties and the surrounding area. It will provide a safe and all weather access to the industrial properties. It will reduce the dust nuisance and hence will have economic benefits to the area." [Report to Council 24 February 2003 page 151]

"....The proposed Special Charge Scheme has been initiated to improve the unsightly condition outside these industrial properties that is caused by activities associated with these industrial properties." [Report to Council 16 June 2003 page 79]

"The existing road widening strip in front of the industrial properties in Russell Street, east of Lock Avenue is unconstructed and is a dust and mud nuisance to the surrounding area. The proposal is to construct a service road with angle parking and associated landscape works. The proposal will have special benefits to all the abutting properties. Consequently, the service road, angle parking facilities and landscape works should be constructed at the cost of the abutting property owners." [report to Council 16 June 2003 page 81]

20 Mr Grech was the Council officer who prepared the various reports to the Council about the special charge scheme. He gave evidence on behalf of the Council but did not elaborate further on the nature of the special benefits. Under cross examination by Mr Tweedie, he admitted that he had no expertise to comment about land value or the enhanced potential for development of the land. With respect to each of the other elements of special benefit, he admitted that the benefit to each lot fronting Russell Street would be the same. In other words, the greater size of Lot 7 would not mean that any additional benefits flowed to it compared to the other lots. Lot 7 would not be provided with any more parking facilities than other lots; it would enjoy the same access; it does not suffer from dust and mud nuisance to any greater extent than other lots; and the improvement to its visual amenity would be the same as for other lots on the south side of Russell Street.

21 Mr Grech said that the Council took into account the positive effect on the land value that the works would have and the land's development potential. However, the Council produced no evidence about the impact that the works were likely to have on the development potential of Lot 7, if any, and Mr Grech admitted he had no expertise to comment on the subject.

22 It was common ground, and I accept, that Lot 7 has development potential for future subdivision. The shape of the portion of Lot 7 that abuts Russell Street has splayed corners, which indicates its possible future use as an access road to the large area of land at the rear. No mention is made in the reports to Council about the suitability of the service road design to accommodate future traffic associated with the further development of Lot 7. It is unclear whether it would be appropriate from a traffic engineering perspective for a road serving development on Lot 7 to access Russell Street via the service road as designed or whether a median break would be required opposite the road so traffic could turn directly in or out of Russell Street. Although safe access is mentioned as a special benefit this appears to relate to existing developed properties not Lot 7.

23 There is no evidence in either the reports to Council or given at the hearing about the way in which the service road would enhance the desirability of Lot 7 for development, or indeed any other lot. In my view the development potential of Lot 7 depends on its size, zoning and location, and will not be affected in any way by the construction or otherwise of the service road in Russell Street. I therefore do not find that enhanced development potential is one of the special benefits that will flow from construction of the service road.

24 With respect to the alleged special benefit of "positive effect on the land value", the Council introduced no evidence about value and Mr Grech admitted he had no expertise to comment about land value either.

25 Mr Tweedie submitted that in any event the site value that was used as the basis of apportionment was current site value without the benefit of the works, not future site value with the works. As the Council had brought no evidence about the value he submitted it was impossible to test whether the works would have any impact on or benefit in respect of land value or development potential.

26 With respect to the issue of increased value, I note the word of caution sounded by Deputy President Macnamara in Walters v Manningham City Council 2 VPR 276 at 285 where he says in respect of a special charge for a proposed road widening scheme:

"We would not however lay stress upon the alleged increase in the value of the land as producing the relevant special benefit. It is a truism that the location of land is one of the most, if not the most important factor in its value . . . There may, however, be . . . many improvements made to a piece of land or to its locale which would make it generally a more desirable place to live or operate from but which may not, for reasons relating to the quality of the locality, yield an increase in the value of the land commensurate to the expenditure or indeed any increase at all."

27 In considering the nature of the special benefits of the proposed works, I am not persuaded that they will enhance the desirability of any of the properties for development or have a positive effect on land value. There is simply no evidence to support either of these alleged special benefits.

28 To summarise, I am satisfied that there are special benefits to the properties included in the scheme of the following nature:

* Provide additional parking facilities to the property.

* Enhance the visual amenity of the area on the south side of Russell Street, east of Lock Avenue.

I find that the special benefit attributable to each of these matters is the same for each lot irrespective of its size or site value. I am not satisfied that there is any special benefit of the following nature:

* Enhance the desirability of the properties for development.

29 The second ground upon which the applicants rely is set out in section 185(2)(b)(ii) namely:

(ii) the basis of distribution of the rate or charge amongst those persons who are liable to pay it is unreasonable;

30 The method of apportionment is based on site value. Because of the much greater size of Lot 7 compared to other properties within the special charge scheme, the cost apportioned to Lot 7 is substantially more than what any of the other lots are required to pay due to its much higher site value.

31 It was suggested on behalf of the Council that the outcome of the application of this method of apportionment is not disadvantageous to the applicant because some properties finish up paying at a rate of $120 per square metre whereas others, such as the subject land, finish up paying only $20 per square metre. I do not consider this analysis is relevant because it merely confuses the apportionment method based on site value with an apportionment method based on area. The real issue is whether site value is a suitable means of assessing the relative benefits which the different parcels of land derive from the works. In other words, is there any relationship between the benefits that one piece of land will derive compared to another, and their site value.

32 In the various officer reports submitted to the Council during the course of its consideration of the special charge scheme there is no discussion about why site value has been chosen as the basis for apportionment or a comparison with other means of apportionment. In the report to Council on 30 June 2003, which preceded the Council's declaration of the special charge, all that is said on the subject of apportionment is that:

"The benefit to each property is proportional to the site value of that property."

However, this statement is not explained or further elaborated upon. There is a similar lack of explanation about why site value has been chosen as the basis for apportionment in an earlier report to Council on 24 February 2003, which simply states in Appendix 4 under `method of apportionment':

"The apportionment of the cost to a property needs to be based on the benefit the property receives from the construction of the service road. The apportionment method would be based on site values of the properties that will derive benefit.

Site value for Lot 7 Lock Avenue needs to be based on the vacant portion of the property that would have a benefit from the proposed service road."

33 For site value to be an appropriate or reasonable basis of distribution, it must be established that there is a relationship between the special benefits that will be enjoyed by the land included in the scheme and the method of apportionment.

34 The Council has not used area as the basis of distribution because there is clearly no relationship between the benefits from the service road and lot area. Nevertheless, the Council appears to have assumed that because Lot 7 is larger than other lots it will derive more benefit. It is implied that the relationship between benefit and the development potential of Lot 7 are reflected in the site value. However, the Council produced no evidence to support this contention and I do not accept it.

35 I have found that in respect of those special benefits which have been established, the benefit will be the same for each lot irrespective of its size. I have also found there is no special benefit that arises in the nature of improved value or enhanced development potential, which is attributable to the works proposed.

36 On this basis I am not satisfied that the site value method of apportionment is related to the special benefits of the special charge scheme. It will not reflect the nature of the special benefits or their proportional enjoyment by the various properties.

37 The next question I must consider is whether, notwithstanding this conclusion, site value apportionment is nevertheless a reasonable option and, whilst it may not be the perfect or best or even fairest option, whether is not so unreasonable that the Tribunal should reject it. In this respect, the observations of Deputy President Macnamara in Perrin v Westernport Water [1999] VCAT 222 are useful. In addressing the meaning of the word "unreasonable" in the context of special charge schemes he says:

"22. It is difficult to see therefore that something is "unreasonable" because it fails to achieve absolute perfection in equity. To put it another way it may be possible for there to be a number of different modes of distribution approaching absolute equity and scientific perfection to varying degrees but nevertheless in no case descending to the level of being "unreasonable".

38 In the present situation I consider that apportionment on the basis of site value is not just one of a number of reasonable options but is inherently unreasonable. If the site value bears no relationship to the special benefits of the scheme, it is difficult to say that it is a reasonable option. In the face of evidence by Mr Grech that the benefits to all the lots fronting the south side of Russell Street are the same, to reach a conclusion that site value was a reasonable approach would necessitate speculating about the factors those are in some way related to or enhanced by the proposed works. which the site valuation may have taken into consideration or which may influence it in the future.

39 Of course there is always the possibility that there may be a special benefit to the applicant from the works that has not been identified by the Council. This was referred to in Walters v Manningham City Council 2 VPR 276 at 285 where the Tribunal said:

"Likewise, the ground would not be made out merely by showing that the "special benefit" derived by an applicant formed no part of the reason for Council's decision to execute the works. To put it in another way, the special benefit to a person, if it was found to exist, would be no less a special benefit and a bar to success by an applicant on review ground established by section 185(2)(b)(i) because the special benefit to the person was wholly incidental to the works project."

40 These comments were made by the Tribunal with reference to the ground set out in section 185(2)(b)(i) which relates to the existence or otherwise of a special benefit. I accept that if there is a special benefit to an applicant which the Council has not identified, it may still be a special benefit that justifies the imposition of a special charge. The question is whether there is such a benefit.

41 The Council's assumption seemed to be that because Lot 7 is so much larger than other lots and has development potential, it must derive greater benefits from construction of the service road, presumably because more traffic from Lot 7 will use the service road.

42 Although it is likely that when Lot 7 is developed it will gain access via Russell Street, this is by no means certain. Lot 7 has a large frontage to Lock Avenue and although there is an existing factory on the portion of the land fronting Lock Avenue there is no reason why this may not be wholly or partially demolished to provide access from this direction. It is therefore possible that access to Lot 7 in the future may be gained either from Russell Street or Lock Avenue. It is therefore not certain that more traffic from Lot 7 will use the service road. In any event, even if there was any certainty about this, as previously noted there is no evidence that the service road has been designed with the possibility in mind that there might be a road entering it midway along in the future, which services an industrial subdivision or large development.

43 The point is that there is simply no evidence that the applicant will gain a special benefit related to the traffic or carrying capacity of the service road.

44 There was evidence that the Council investigated an option that would have involved providing separate driveways to each property with direct access to Russell Street rather than constructing a service road in front of the properties with restricted access at each end. Mr Grech gave evidence that the proposed method of apportionment with this option was an equal apportionment based on a per driveway basis. If this option had proceeded, the applicant would have paid a similar amount to other lots with a single driveway. The Council choose not to proceed with this option for a number of reasons but a significant reason was the potential loss of the substantial eucalyptus trees. The service road option enables the trees to be retained and incorporated into the landscaping.

45 I consider that it is inappropriate for me to speculate about what other special benefits might be enjoyed by Lot 7 as a result of the proposed works in the absence of any submissions or evidence about what they might be. Whilst the Tribunal has the power to review a decision's merits in this type of case and may substitute its own views for those reached by the Council (see Walters v Manningham City Council 2VPR 276), there must be some basis for doing so. There is no such basis in this case.

46 My conclusion is that I do not consider the basis of apportionment bears a reasonable relationship to the nature of the special benefits that will arise from the works proposed. I am therefore satisfied that the basis of distribution of the special charge amongst those persons who are liable to pay it is unreasonable within the meaning of section 185(2)(b)(ii).

47 Having made the finding that the ground in section 185(2)(b)(ii) is made out, it is not necessary for me to consider whether the ground in section 185(2)(b)(iii) is also established.

48 I do not consider it is possible to vary the special charge in relation to its application to the applicant. Rather, I consider that the unreasonableness of the basis of distribution affects the whole basis of the special charge and everyone liable to pay it. For this reason the special charge should be set aside.

49 The applicant also sought declarations pursuant to section 185AA of the Local Government Act 1989. In particular, she challenged the validity of the notice of the special charge required to be given pursuant to section 163(5) of the Act. Pursuant to section 163(4) a special charge is levied by sending a notice to the person who is liable to pay it. Section 185AA(i) provides that a person may apply to Victorian Civil and Administrative Tribunal Act for a declaration concerning the validity of a decision referred to in section 185(1). Section 185(1) refers to "review of a decision of a Council imposing a special rate or special charge" on the person. It was argued on behalf of the applicant that it is the notice that imposes or levies the special charge. The notice was defiant in a number of respects in that it did not contain certain information required by the Act and regulations.

50 Although the Council denies that its notice of 2 July 2003 was deficient, it issued a further notice on 1 July 2004. In its response to the application for declaration, one of the grounds is:

"4. In the alternative, it is admitted that the notice sent under section 163(4) of the Act contained omissions having regard to the requirements set out in section 163(5) of the Act. It will be contended at the hearing of this matter that the ramification flowing from these omissions is that the relevant special rate may not yet have been levied for the purposes of section 163(4) of the Act."

51 I do not consider that there is a need for me to now make any declarations in light of the findings I have made above: namely that the applicant has made out her ground pursuant to section 185(2)(b)(ii) that the basis of distribution of the charge amongst those persons who are liable to pay is unreasonable and as a consequence the special charge should be set aside. I note that section 185AA(2) provides:

(2) On an application under sub-section (1) the Tribunal may make any declaration it thinks appropriate in the circumstances."

52 If a declaration will not have any useful effect or the substantive outcome sought to be achieved by making a declaration will be achieved by other means, it is not appropriate for the Tribunal to make a declaration. I consider that in the current circumstances there is no need for me to make a declaration or to rule on the matters put to me regarding the adequacy of the notice. On the basis that it is not appropriate, I therefore refuse the application for declaration in P3075/2003.