Land and Environment Court New South Wales

• Medium Neutral Citation: North Western Surveys Pty Limited v Penrith City Council [2012] NSWLEC 1017
• Hearing dates: 6, 7, 8 July and 2, 3, 4, 9 August 2011
• Decision date: 30 January 2012
• Jurisdiction: Class 1
• Before: Dixon C

Decision

(1)The appeal is upheld.

(2)Development consent is granted to DA 11/0123 for the subdivision of property at 159 -169 Caddens Road Kingswood NSW into 71 residential lots and 1 residual lot, roads and detention basin subject to the conditions in annexure A.

(3)The exhibits are returned.

• Catchwords: Development consent - appeal against conditions imposed on a development consent for the subdivision of vacant land into 71 residential allotments and 1 residual lot subject to conditions to provide facilities and services some funded by a condition under s 94 of the EPA Act 1979 (subject to a s 94E Ministerial Direction which caps monetary contributions at $30K) and some provided by way of condition under s 80A(1)(f) and 81A(3) of the EPA Act - are the conditions reasonable and if so do they relate to the development
• Legislation Cited: Environmental Planning and Assessment Act 1979; Environmental Planning and Assessment Regulation 2000; Penrith Development Control Plan 2006; Penrith Local Environmental Plan (Caddens) 2009; Sydney Regional Environmental Plan No 20 - Hawkesbury Nepean River; Cultural Facilities Development Contribution Plan; District Open Space Facilities Development Contributions Plan; WELL Precinct Development Contribution Plan 2008
• Cases Cited: Cavasinni Constructions Pty Ltd v Fairfield City Council [2010] NSWLEC 65; (2010) 173 LGERA 456; Fairfield City Council v N & S Olivieri Pty Limited [2003] NSWCA 41; Goldberg v Waverley Council [2007] 156 LGERA 27; Maitland City Council v Anambah Homes Pty Ltd (2005) 147 LGERA 234; Meriton Apartments Pty Ltd v Council of the City of Sydney [2011] NSWCA 17; Newbury District Council v Secretary of State for the Environment [1981] AC 578 at 697G; Sydney City Council v Ipoh Pty Limited (2006) 149 LEGERA 329
• Category: Principal judgment
• Parties: North Western Surveys Pty Limited (Applicant); Penrith City Council (Respondent)
• Representation: Counsel; Mr P Tomasetti SC (Applicant); Mr J Ayling SC with Mr M C Fraser (Respondent); Solicitors; Pikes Lawyers; Mr G Green (Applicant); Sparke Helmore; Mr C Drury (Respondent)
• File Number(s): 10329 of 2011

JUDGMENT

Background

1 On 4 June 2010 the Minister for Planning issued a Direction to Penrith City Council, pursuant to s 94E of the Environmental Planning and Assessment Act 1979 (the Act), capping the amount of any monetary contribution condition under s 94(1) or s 94 (3) for residential subdivision at $20,000 per lot.

2 The Minister increased the cap to $30,000 per lot on 15 March 2011.

3 The purpose of the Direction was to "...increase housing supply by lowering development charges for infrastructure and to stimulate housing construction " (Exhibit 3 p1).

4 In order to offset any shortfall in infrastructure funding caused by the cap council was asked to critically review its contributions plans to identify savings and alternate opportunities to provide services to support urban development subject to levies under its s 94 plans. It was also given access to Priority Infrastructure Funding from state government funds set up to provide council loans for public amenities and services for essential works (Exhibit A, Vol 2 part B tab 7, p 7).

5 In response to the cap on 27 June 2010 council resolved to adopt "...a policy approach that responds to council's commitment to ensuring the co-ordinated and efficient delivery of infrastructure for its new urban areas whilst addressing the state government's Direction in relation to development contributions ." (Exhibit 2 tab7). It also elected to pursue its application to the Department of Planning for exemption from the cap (Exhibit 8 para 1) and the making of its draft contributions plan 2010.

6 It is against this background that Penrith City Council issued development consent for the subdivision of the applicant's land within the Caddens Release area.

7 The consent (DA 11/0123) approved subdivision of the land at 159 - 169 Caddens Road, Kingswood into 71 residential lots and one residue lot and the following works:

(1) The construction and dedication of new internal subdivision roads;

(2) The construction of drainage works and services in the new internal roads and within Connell's Lane adjoining the site. These drainage works to be dedicated to Council;

(3) The upgrading of O'Connell Lane including associated drainage infrastructure and services;

(4) The construction of a detention basin and ancillary drainage structures including structures on land to the west of O'Connell Lane.

8 The development was prepared in accordance with the relevant controls in the Penrith Local Environmental Plan (Caddens) 2009 (LEP 2009) and Penrith Development Control Plan 2006 (DCP 2006) (Statement of Environmental Effects clause 4.2, exhibit A, Vol1 tab 1 p17) and council's adopted contributions plans (subject to the Minister's Direction):

(1) The WELL Precinct Development Contribution Plan 2008;

(2) The Cultural Facilities Development Contribution Plan (5 August 2003) and;

(3) The District Open Space Facilities Development Contributions Plan 18 December 2007.

9 Council approved the development subject to 60 conditions and this appeal concerns the imposition of conditions 32, 33, 34, 36 and 59. (See Appendix A).

10 The conditions impose two obligations on the applicant. The first obligation is to construct (at its own cost) a detention basin and roads. The statutory basis of this requirement, according to the council, is s 80A(1)(f) of the Act.

11 The second obligation is to dedicate to the council free of cost the land on which the detention basin is built. The statutory basis for this requirement is said to be s 94(1)(a) of the Act.

12 In addition condition 59 requires the applicant to pay a monetary contribution under s 94(1)(b) in the sum of $2,130,000. This amount is calculated on the basis of 71 lots multiplied by $30,000. The amount is less than the $53,651 per lot which council submits could be levied under the relevant contributions plans but for the Minister's capping Direction.

13 The applicant appeals these conditions because it contends that the combined effect is to levy s 94 contributions in cash, land and "works in kind" in the order of $51,000 per lot in excess of the $30,000 cap set by the Direction. The applicant contends that the conditions are in breach of s 94E (3) of the Act. That section prohibits the council from granting development consent and imposing a condition "that is not in accordance with the terms of the Direction, despite the provisions of this Division and despite the provisions of the contributions plan".

14 The appeal is an under s 97(1) of the Act. The applicant asks the Court to approve the development. It wants to carry out the works the subject of the consent and pay a monetary contribution imposed in accordance with the s 94E "capping" Direction subject to a credit for the sums expended on the works, and for the value of the basin lands once dedicated. It contends that the works and the dedication of land should be treated as "works in kind" and attract a credit, which can be off set against any monetary contributions it is obliged to pay subject to the Direction. It contends this can be achieved if the applicant's draft conditions in Exhibit G and the schedule 1 prepared by its town planner Mr Barwick are imposed.

15 Council also supports an approval of the development, however, it does not want to give the applicant any monetary credit for the works and dedication of land as an offset against the s94 condition. It contends that a credit would substantially reduce the contributions payable and council's opportunity to provide other planned services and amenities. In fact it submits that on the facts there is no statutory basis to require the council to accept the provision of a material public benefit (other than dedication of land or payment of a monetary contribution) in part or full satisfaction of a condition imposed in accordance with s 94(1) or s 94(3) of the Act. It submits the subsections assume the prior existence of a condition that may be satisfied by the subsequent acceptance of the provision of a benefit. Section 94(5) does not recognise the concept of "works in kind" which involves the acceptance by the consent authority of an offer by the applicant of a consent to carry out (at its expense) specific works which would otherwise be the subject of a monetary contribution, in a case where no condition requiring contribution in respect of that work is included in the consent.

16 Council also contends that while the contributions plan at para 2.1.3 deals with "works in kind offers" and "material pubic benefit offers", the decision to accept such an offer is solely at council's discretion and outside the subject matter of the appeal. If s 94(5) provides no statutory basis then council asserts s 39 (2) of the Land and Environment Court Act offers no jurisdiction. In the exercise of the functions and discretions of the council on appeal under s 97(1) the subject matter of the appeal does not extend to the exercise of discretion not granted by statute or one exercised within a statutory regime. The discretion to accept a work in kind or public benefit under the s 94 plan requires amongst other things a consideration of council's capacity to deliver the public facilities in the plan in a timely manner. It submits that the Court is not in a position to assess or apply these policy considerations and therefore that discretion cannot be a matter the subject matter of the appeal within s 39(2) of the Act.

17 It is Council's case that the s 94E Direction causes a dilemma. It caps monetary contributions at $30,000 per lot but does not relieve council of its duty under cl35 (3)(d) of the Environmental Planning and Assessment Regulation 2000 (the Regulations) to ensure that adequate and reasonable provision is made in respect of other planned services and amenities. To address this dilemma council decided in respect of this consent to impose conditions which place the obligation to do works from which the development will benefit on the developer, and remove the cash windfall the developer might have expected as a result of the transfer of the basin land. It submits that this course ensures that other planned services and amenities will be provided and the developer will not receive financial advantage from the cap.

18 In this case council contends that the conditions for works and dedication are not controlled by the Direction. The terms of the Direction do no more than place a cap on monetary contributions. The Direction under s 94E(1)(b)(ii) does not relate other matters in ss 94 or 80A. Therefore, if the cost to the applicant of complying with all the conditions of consent without credit is in excess of the Minister's cap then that fact alone does not render the conditions unlawful. The only ground, which might arguably be relied upon by the applicant, in this case is that they are unreasonable and council contends that ground is not made out on the evidence.

19 In order to address the issues it is necessary to set out a summary of the planning history of the site and the relevant facts. I have relied on the council's agreed statement of facts and contentions filed on 11 May 2011, the applicant's statement of facts and contentions in reply filed 15 June 2011 and the respondent's reply to the applicant's statement of facts and contentions filed 17 June 2011.

20 It is important to understand at the outset that this development is within a new urban release area with site-specific planning controls. It covers Lot 1 and 2 in DP 209925, Lot 32 DP 520322 and Lot 2 in DP 864084 and has a total area of 4.686 Ha. The residential lots range in size from 375 m2 to 620 m2. The residue lot is approximately 1895 m2. The residue lot is intended to be subject to a future application for subdivision.

21 The site slopes to a proposed drainage reserve (Lot 32 DP 520322) and is within the Werrington Greek Catchment area and represents 45% of the sub catchment area served by proposed Basin B5.0.

22 The site is located west of O'Connell Street and to the north of Caddens Road. It is accessed via Caddens Road although 10 lots have direct access to O'Connell Lane. It is relevant that O'Connell Lane is identified as a Collector Road in s 6.21 of the Caddens Penrith DCP 2006 and in the WELL s 94 plan.

23 The site is located in an area called the Caddens Release area and is one of the eight sub-precincts within the Werrington Enterprise Living and Learning (WELL) Precinct.

24 The WELL Precinct is intended to be a new urban community area with access to education facilities, transport links and planned residential and employment areas. The vision statement for the WELL Precinct states that the precinct will "Demonstrate a model of sustainable urban development, that captures its potential arising from proximity to transport linkages and tertiary education facilities, the WELL precinct will be an internationally renown destination of choice for business, residents and students."

25 To co-ordinate the development of the WELL Precinct in 2004 the council adopted the WELL Strategy. A key outcome of the Strategy is "timely and effective delivery of physical and human infrastructure to meet the demands of existing and proposed communities and to ensure protection of the local and broader environment." To achieve this outcome council (in co-operation with landowner groups), undertook detailed studies and investigations for Precinct wide infrastructure systems and their program delivery. Those investigations lead to the adoption of concept plans, LEPs and DCPs that identified infrastructure. The studies undertaken for the Caddens Release area resulted in the rezoning of that land for residential and related purposes and the preparation of a Development Control Plan for the Caddens Release area (which has been adopted in Chapter 6.21 of the Penrith DCP 2006).

26 According to Mr Brindle, within the development horizon of 30 years, it is intended that the WELL Precinct will provide an additional 2,463 dwellings within the Caddens Release area, South Werrington and Werrington Mixed Use Area sub precincts, accommodate an increase of 6,650 residents; and provide 664,000 m2 of employment and educational floor space to accommodate 5,124 new students and 8,700 workers.

27 However, without full funding of infrastructure council contends that the integrated approach to achieving a sustainable and high quality development in the area will fail (Exhibit 11 pp 4 - 5). This is because the imposition of the cap (which is not based on any consideration of the infrastructure to be funded under the WELL Precinct Development Contributions Plans) frustrates the delivery of required infrastructure. The total value of the works to be funded under the s 94 contributions plans is $117,067,802 and the imposition of the cap of $30,000 results in a shortfall.

28 The actual amount of any shortfall generated by the cap is in dispute. Even council experts disagree. Mr Brindle says the shortfall is $46,5 million (Exhibit 11 p6) and Mr Moore says it is $31,225,981. (Exhibit 12 para 13). One explanation for the difference is Mr Brindle's estimate of the shortfall does not take into account the infrastructure funding of $4,566,000 received by council from the state government on 25 June 2010 to construct O'Connell Lane (including that part that the council wants the applicant to build). Or the fact that Landcom has agreed to give a substantial tract of land in the precinct to council (after improvement) free of cost (exhibit C).

29 While the infrastructure loan has not been proceeded with and the funds remain in council's bank account (for the reasons detailed by council's financial services manager's Mr Moore (Exhibit 9)) the applicant's expert Mr Barwick says that loan needs to be deducted from any alleged shortfall.

30 It is the applicant's case that whether the developer pays money, provides the land or undertakes "works in kind' the intention of the Direction remains the same: that the total cost burden imposed upon the developer directly or indirectly is $30,000 per lot. Where this amount will not cover the cost of "essential services" council may apply for funding assistance from the state government. It rejects council's conditions because they seek to avoid the intent of the cap. Instead the conditions impose a requirement (by a condition of development consent) that the applicant pay cash for non-essential works (condition 59) and then argue that it has no funding for essential works so it must get the developer to construct them instead as a condition under s 80(1)(f) of the Act. (AWS para 87 at p44).

Issues for Determination

31 The central issues for determination in this case is whether the conditions in dispute are can be imposed under ss 80A and 94 of the Act and are in the circumstances of the case reasonable.

32 In order to answer the issues raised it is necessary to first identify the statutory source of the power for each condition: per Craig J in Cavasinni Constructions Pty Ltd v Fairfield City Council (2010) 173 LGERA at [463].

Condition 32 and 59

33 Council contends that Condition 32 and 59 are imposed under s 94(1) (AWS para 20 - 21).

34 Conditions involving the payment of a money contribution or the dedication of land may be imposed under s 94. Section 94 states:

(1) If a consent authority is satisfied that development for which development consent is sought will or is likely to require the provision of or increase the demand for public amenities and public services within the area, the consent authority may grant the development consent subject to a condition requiring:

(a) the dedication of land free of cost, or

(b) the payment of a monetary contribution, or both.

(2) A condition referred to in subsection (1) may be imposed only to require a reasonable dedication or contribution for the provision, extension or augmentation of the public amenities and public services concerned.

(3)...

(2)...

(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.

(4) A condition under section 94A that is of a kind allowed by, and determined in accordance with, a contributions plan (or a direction of the Minister under this Division) may not be disallowed or amended by the Court on appeal.

35 Council contends that Condition 59 is lawfully imposed under s 94(1)(b) of the Act despite the fact that it applied " ...the draft 2010 plan which is still with the Minister, rather than the 2008 plan, which is technically still in force (para 9 of the applicant's written submission (AWS)).

36 In short the Council did not apply the adopted s94 contributions plan in formulating the conditions. Instead it applied the 2008 plan revised by the draft 2010 to formulate the s 94 contribution (para 23 of AWS).

37 This approach would appear to be in breach of s 94B (1) of the Act which states:

(1) A consent authority may impose a condition under section 94 or 94A only if it is of a kind allowed by, and is determined in accordance with, a contributions plan (subject to any direction of the Minister under this Division).

38 The Act makes provision for how a contributions plan might be created. This is addressed by s 94EA which provides:

(1) A council, or two or more councils, may, subject to and in accordance with the regulations, prepare and approve a contributions plan for the purpose of imposing conditions under this Division (other than Subdivision 4).

(2)...

The regulations may make provision for or with respect to the preparation and approval of contributions plans, including the format, structure and subject-matter of plans.

(3) A council is, as soon as practicable after approving a contributions plan, to provide the Minister with a copy of the plan.

39 The Regulations referred to in s 94EA are in the Environmental Planning and Assessment Regulation 2000 ("the Regulation"). Clause 27 of the Regulation deals with what a contributions plan must contain. It provides:

(1) A contributions plan must include particulars of the following:

(a) the purpose of the plan,

(b) the land to which the plan applies,

(c) the relationship between the expected types of development in the area to which the plan applies and the demand for additional public amenities and services to meet that development,

(d) the formulas to be used for determining the section 94 contributions required for different categories of public amenities and services,

(e) the section 94 contribution rates for different types of development, as specified in a schedule to the plan,

(f) if the plan authorises the imposition of a section 94A condition:

(i) the percentage of the section 94A levy and, if the percentage differs for different types of development, the percentage of the levy for those different types of development, as specified in a schedule to the plan, and

(ii) the manner (if any) in which the proposed cost of carrying out the development, after being determined by the consent authority, is to be adjusted to reflect quarterly or annual variations to readily accessible index figures adopted by the plan (such as a Consumer Price Index) between the date of that determination and the date the levy is required to be paid,

(g) the council's policy concerning the timing of the payment of monetary section 94 contributions, section 94A levies and the imposition of section 94 conditions or section 94A conditions that allow deferred or periodic payment,

(h) a map showing the specific public amenities and services proposed to be provided by the council, supported by a works schedule that contains an estimate of their cost and staging (whether by reference to dates or thresholds),

(i) if the plan authorises monetary section 94 contributions or section 94A levies paid for different purposes to be pooled and applied progressively for those purposes, the priorities for the expenditure of the contributions or levies, particularised by reference to the works schedule.

(2) In determining the section 94 contribution rates or section 94A levy percentages for different types of development, the council must take into consideration the conditions that may be imposed under section 80A (6) (b) of the Act or section 97 (1) (b) of the Local Government Act 1993.

(3) A contributions plan must not contain a provision that authorises monetary section 94 contributions or section 94A levies paid for different purposes to be pooled and applied progressively for those purposes unless the council is satisfied that the pooling and progressive application of the money paid will not unreasonably prejudice the carrying into effect, within a reasonable time, of the purposes for which the money was originally paid.

40 A draft contribution plan forwarded to the Minister is not a contribution plan under the Act or the Regulations. Council's planning report of 27 June 2011 acknowledges as much "... L&E court (is) obliged to consider the current statutory position and ministerial directions in relation to these applications. It is possible that (it) may not be able to support council's policy position" [Exhibit 2 tab 7 p53].

41 The evidence discloses that Council resolved to apply the draft plan with respect to this development application "...until the issues relating to the development contributions plans are resolved with the state government...one significant benefit of the approach is that the current plans would not need... referral to I PART...This means that Council retains its current authority over the content of the plans and the range and standard of facilities it funds ." (Exhibit 2 tab 7 p 55). It is also relevant to note that at that time council also resolved to take up "Option 2" [Exhibit 2 tab p56] which involves the following actions:

(1) Levy contributions up to $30,000 cap;

(2) Use these contributions to fund recreation, community and selected roads facilities in the WELL s 94 plan, and the revised District Open Space and Cultural Facilities Plan;

(3) Require all drainage works across the WELL precinct to be provided by proponents (through conditions of consent);

(1) Require road works (where costs are 100 percent apportioned and the Caddens sub precincts) to be provided by proponents through conditions of consent;

(2) Reduce the level of funding to embellish a 2.06 ha passage of open space (as it is substantially treed);

(3) Delete proposed contributions towards employment of a community place manager in (as this function is not considered essential;

(4) Delete funding for intersection upgrade, as the necessary works have recently been completed under the federal government black spot program. ( Tab 7 p 55 of Exhibit 2).

42 In attempting to grapple with the difficult consequence of the cap council determined that " this policy achieves satisfactory delivery of infrastructure in accordance with the relevant contributions plans by other means " (exhibit 2 tab 7 p 57) and avoids the earlier practice adopted by Council on 21 June of " ...deferring the issue of development consents for developing applications where development contributions in excess of $20,000 would otherwise be charged, until such time as satisfactory arrangements are made for the funding and delivery of all infrastructure identified in the relevant development control plan through a legally binding commitment with the applicant or through other appropriate means ." (Exhibit 2 tab 7 p 52).

Finding conditions 32 and 59

43 While I appreciate the dilemma the cap caused for council and the delivery of planned development and infrastructure envisaged by the site-specific planning controls I am unable to support the imposition of conditions 32 and 59.

44 Based on the evidence before me the condition 59 levies a monetary contribution of $2.08 million that is not calculated in accordance with the adopted s 94 plan 2008 subject to the Minister's Direction. Nor does it levy for essential works listed in the adopted 2008 contributions plan. In particular there is no levy for drainage works despite the plan's schedule of works. Furthermore, the rates disclosed are different to those permitted by the adopted Well contributions plan. For example the rate for road works is significantly lower than the adopted rate. The fact that the draft plan contributions are substantially smaller because of the revisions of the earlier plan works and land acquisition lists does not make the approach taken by council legal or reasonable in the circumstances of this case.

45 I accept the applicant's submission that the council has "cherry picked" items and imposed rates from the adopted plan as modified by the draft 2010 plan that would bring the calculated amount within the Ministerial cap. The Act does not allow the applicant or the council to elect the s 94 contributions plan or adopt what Council describes as a "policy approach" to development contributions. The council cannot cherry pick from the draft or adopted plan to "...enable development to proceed and new housing to be delivered in the Well precinct and the broader citywide objectives to be met [and] require developers to construct the necessary drainage works and road works and seek contributions to fund recreation, community and selected road facilities, together with district open space and cultural facilities plans. " (Exhibit 2 tab 7)

46 I accept the applicant's submissions (at paragraphs [122 -129] AWS) that condition 59 is not authorized by the Act. Condition 59 is not of a kind allowed by, and is determined in accordance with, a contributions plan. Section 94B (1) of the Act provides :

(1) A consent authority may impose a condition under section 94 or 94A only if it is of a kind allowed by, and is determined in accordance with, a contributions plan (subject to any direction of the Minister under this Division).

47 While the Court has power on appeal to disallow or amend a s94 condition under 94B(3) if it is "...unreasonable in the particular circumstances of that case, even if it was determined in accordance with the relevant contributions plan (or direction)" the first step must be to "... identify the statutory source of the power for each condition : per Craig J in Cavasinni Constructions Pty Ltd v Fairfield City Council (2010) 173 LGERA at [463] before any consideration of the reasonableness of a condition in the circumstances of the case.

48 Based on the evidence I do not think conditions 59 and 32 are reasonable in the particular circumstances of this case. The conditions imposes a monetary contribution under s 94 for non-essential works based on a draft plan and then purports to require the applicant to pay for the essential works identified in the adopted plan by others means namely: s 80A conditions. This approach frustrates the intention of the cap and the purpose of the Direction that seeks to " lower development charges for infrastructure and to stimulate housing construction " (Exhibit 3 p 1).

Conditions 33, 34, 36

49 Council submits that because it did not impose a requirement for payment of monetary contributions for drainage and water management; or require payment of so much of the roads contribution as related to the construction of O'Connell Lane or Caddens Road these works can be required by condition under s 80A of the Act. This is because the conditions relating to works and the dedication of land are not controlled by the terms of the s94E (1)(b)(ii) Direction. It submits that the Direction does no more that place a cap on monetary contributions.

50 For that reason council contends that the work conditions of the consent cannot be unlawful for any reason associated with the exceeding of the cap (CWS par [38]).

51 The applicant disagrees. It submits that where the developer pays money, provides the land or undertakes "works in kind' the intention of the Direction remains the same: that the total cost burden imposed upon the developer directly or indirectly is $30,000 per lot. Where this amount will not cover the cost of "essential services" council may apply for funding assistance from the state government. The applicant contends that the council's policy approach outlined in Option 2 seeks to avoid the intent of the cap. Instead the conditions impose a requirement (by a condition of development consent) that the applicant pay cash for non-essential works (condition 59) and then argue that it has no funding for essential works so it must get the developer to construct them instead as a condition under s 80(1)(f) of the Act. (AWS para 87 at p44).

52 In order to address the issues raised I need to determine whether the work conditions imposed under s 80A can be primarily characterised as the provision of a public amenity and not sufficiently connected to the development to justify imposition under s 80A of the Act.

53 Section 80A of the Act provides:

A condition of development consent may be imposed if:

(a) it relates to any matter referred to in section 79C (1) of relevance to the development the subject of the consent, or

(b)...

(c)...

(f) it requires the carrying out of works (whether or not being works on land to which the application relates) relating to any matter referred to in section 79C (1) applicable to the development the subject of the consent, or

(g)-

(h) it is authorised to be imposed under section 80 (3) or (5), subsections (5)-(9) of this section or section 94, 94A, 94EF or 94F.

54 The case law is clear conditions requiring works cannot be imposed under s94 conditions : Fairfield City Council v N & S Olivieri Pty Limited [2003] NSWCA 41 at [22] -[26] per Spigelman CJ, [44]-[46] per Santow JA, and [71]-[77] per Cripps AJA.

55 Section 80A(1)(f) allows the imposition of a condition if it requires the carrying out of works (whether or not being works on land to which the application relates) relating to any matter referred to in s 79C(1) applicable to the development the subject of the appeal.

56 In Cavasinni the Court held that "s 80A(1)(a) requires two matters to be addressed. The first is whether the condition relates to a matter referred to in s 79C(1) and the second requires a determination as to whether such matter is relevant to the particular development for which development consent has been or is proposed to be granted". The same can be said for s 80A(f).

57 The Court must be satisfied, if the conditions are to be imposed under s 80A(f) that they relate to any matter referred to in s 79C(1) applicable to the development the subject of the consent .

58 The applicant contends that the conditions do not relate to any matter referred to in s 79C(1) but rather to matters under ss 94 and 94B (although they are masked as conditions for works.) With respect to the second requirement i n s 80A(1)(a) it submits that the nature and scope of the works required by the conditions cannot be said to be applicable to the development the subject of the development application. Therefore it submits that the works conditions are not validly imposed under s 80A(f) and as currently drafted should be deleted. Nor do they satisfy the tests in Newbury District Council v Secretary of State for the Environment [1981] AC 578 at 697G.

59 In Olivieri the condition under consideration requiring road works related to works that were not within the relevant contribution plans and the Court determined that they could not be characterised as primarily for the provision of a public amenity. Relevantly, Spigelman CJ at para 23 of Olivieri said: " No doubt, if a particular work, required to be carried out pursuant to such a condition, can be characterized primarily as the provision of a public amenity, then its connection with the development may not be regarded as sufficiently close ".

Finding

60 The facts in this appeal are very different to Olivieri . The works the subject of the conditions under s 80A(f) to Caddens Road, O'Connell Lane and to the drainage Basin are works that can be "characterized primarily as the provision of a public amenity". They are all within the WELL Contributions Plan. They could not have been included if they had not provided a public amenity. The evidence supports finding that the works are more than applicable to the needs of this development. They are applicable to the greater community than just the residents of this development. I do not accept that they can be imposed under s 80A(f). I accept the applicant's submissions that they are really s 94 conditions.

61 Mr Brindle said that the works in the s 80A(f) conditions directly relate to the development the subject of the appeal. He referred to the fact that they are specifically detailed in the applicant's development application, which seeks consent for a detention basin, and bio-retention pond with associated gross pollutant traps to detain and treat storm water from the development. Furthermore, he said that the works accord with those identified in the master planning for the Caddens release area in the WELL Precinct - Hydrology and Catchment prepared by the Cardo Willing Management Study prepared in August 2006. He told me that Caddens Road provides primary access to the site until O'Connell Lane is constructed to the north to connect to the highway and the proposed Caddens Bypass. Thereafter the O'Connell Lane upgrade will provide access to the development. He said the drainage infrastructure in and across this road serves the development. In short his evidence is that the works in the conditions have a direct relationship with the subdivision development and are matters referred to in s 79C(1) of the Act, and benefit the development and can reasonably be imposed under s 80A(1)(f).

62 Furthermore, Mr Brindle's said that the dedication of the land on which the drainage works is to be located (condition 32) is a normal part of subdivision; no different to the dedication of land for public roads (Exhibit 11 p 11). He does not support any credit or off set for the dedication or the works against condition 59. This is because the estimated costs of the engineering works alone is $29,403 per lot and if the works were accepted as a material public benefit under 2.13 of the contributions plan and offset against condition 59 the result would be no contribution toward the cost of other facilities and services to be provided under the contributions plans. (Exhibit 11 p13).

63 The applicant does not accept Mr Brindle's assessment that the primary purpose of the drainage works and detention basis is to serve the proposed development. Relying on Mr Barwick's evidence it submits that the design of the drainage works follows the zoning of the land under the LEP (Special Infrastructure 2) and the adopted Development Control Plan requirements. His evidence is that the LEP 2009 and DCP foreshadowed the system required, nominated where the public land would be located and what size the facilities needed to be [Exhibit 2 volume 1 tab 15 p15 to 23]. The proposed basin is sized to cater for a 12 Ha catchment whilst the proposed development site occupies only 40- 45% of the catchment (Exhibit A, Vol1 tab9 para 36). The design of the drainage also followed the intent of the contributions plan 2008. These works should be characterized primarily as the provision of a public amenity" and cannot be a work condition under s 80A(f).

64 The applicant also takes issue with Mr Brindle's assessment that the road works are integral to the development "in providing safe and efficient means of access from the proposed lots to the surrounding arterial road network" [Exhibit 11 p10]. It asks the Court to accept Mr Wilkinson's evidence that O'Connell Lane is a Collector Road and typically designed to cater for traffic volumes in the order of 2,000 to 10,000 vehicle trips per day well in excess of that generated by the development. [Exhibit A, Vol 1, tab 9). The applicant's evidence is that the roads are designed to meet the demand generated from the development over the whole of the precinct and not just the subject land. Again these works should be " characterized primarily as the provision of a public amenity" and cannot be the subject of a work condition under s 80A(f).

65 The applicant submits that the works nominated in Council's adopted contributions plans and are not solely generated by the development they provide a public amenity. This is demonstrated by the fact that the council received public funding to construct O'Connell Lane from the Department of Planning but elected to impose that obligation on the applicant via a condition to construct a substantial part of it.

66 Conditions 32, 33, 34 and 36 taken together require dedication to council, at no cost, the land on which the detention basin is to be constructed. According to the applicant the only statutory basis for these conditions is s 94: Maitland City Council v Anambah Homes Pty Ltd (2005) 147 LGERA 234 at 239.

67 Based on the evidence I accept that I submission. However, as drafted they offend the principles of apportionment embodied in s 94 of the Act as discussed by the Court of Appeal in Meriton Apartments Pty Ltd v Council of the City Of Sydney [2011] NSWCA 17 at [59].

68 The case law is clear a dedication can only be required as a reasonable response to the need for public services and public amenities generated by the development. Both parties' experts agree that the detention basin, and, therefore the land on which it is situated, serves a far greater catchment than just this development.

69 Based on the evidence I accept that the dedication of the basin land is unreasonable and ss 94(1) and (2) of the Act does not authorize the imposition of such a condition (AWS para 90). I accept that s 94(5) of the Act and clause 2.13 of the contributions plan provide opportunity for council to accept an in kind contribution in lieu of a cash contribution. Therefore, the dedication of the land for the basin can be authorized by s 94 in circumstances where its value is to be offset against the cash contribution payable. The current conditions however require dedication of land in addition to a monetary contribution.

70 I accept the applicant's submission based on the evidence that the conditions imposed by the council cannot be justified on the evidence. They are unreasonable and should be deleted for the reasons detailed above.

71 I am of the opinion that the applicant's draft conditions (which include schedule 1) should be imposed in place of the council's conditions. They have been prepared in accordance with the Act, the council's planning controls, and the contributions plans adopted by council and subject to the Ministerial Direction. The adopted contributions plan costs the works and Mr Barwick has applied those costing in the draft conditions as set out in schedule 1.

72 I accept the applicant's submission that the Court has power to impose the applicant's conditions under s 94(1), (3) and (5) and s 94B of the Act and s 94E. Council's adopted contributions plan in 2.1.3 deals specifically with works in kind offers and material public benefits and the development application lodged offers works in kind in lieu of monetary contributions. The Court's power under s 39(2) was discussed in Goldberg v Waverley Council [2007] 156 LGERA 27 and more recently in Sydney City Council v Ipoh Pty Limited (2006) 149 LGERA 329. It is a broad power which gives the Court "...all the functions and discretions which the person or body whose decision is the subject of the appeal had in respect of the matter the subject of the appeal ".

73 The subject matter of this appeal includes offers of works in kind and material public benefit offers and the contributions plan (2.1.3) invites works in kind in lieu of monetary payments. Under s 39(2) I have all the functions and discretions in respect of the subject matter of the appeal. Therefore, it is within power to impose the conditions proposed by the applicant including acceptance of the applicant's works in kind offer.

74 According to the council's evidence in (Exhibit 8) it has made no application for a grant under the PIF or for a special rate variation to cover any shortfall in infrastructure funding caused by the cap. Nor has it agitated the possibility of proceeding with the construction works to O'Connell Lane funded by the state government loan that has now lapsed (Exhibit 9). Instead council has elected to pursue its application to the Minister to have the WELL precinct exempted from the cap and the revised 2010 s 94 plan made. The evidence is that this application has been pending for some 18 months and development applications have been deferred pending a response up until this application.

75 Mindful that council still has opportunity to pursue funding to cover any shortfall in funding for essential works I am satisfied that the development consent assessed and approved by council is acceptable under s 79C of the Act and that adequate public services and amenities will be available to serve the needs of the residents of the precinct.

76 On 30 December 2011 I handed down the following preliminary findings:

(1) The appeal is upheld.

(2) The applicant is directed to forward to the Court a copy of its proposed conditions in exhibit G including schedule 1 prepared by Mr Barwick in an electronic form.

(3) The matter is stood over for the making of final Orders and written judgment on 30 January 2012.

77 Having received the conditions and schedule requested I now make the following Orders:

(1) The appeal is upheld.

(2) Development consent is granted to DA 11/0123 for the subdivision of property at 159 - 169 Caddens Road Kingswood NSW into 71 residential lots and 1 residual lot, roads and detention basin subject to the conditions in annexure A.

(3) The exhibits are returned.

Susan Dixon

Commissioner of the Court

APPENDIX A

SCHEDULE

ANNEXURE A

Amendments

06 June 2012 - Correct conditions of consent attached in accordance with the Slip Rule sent to parties on the 5 June 2012.
Amended paragraphs: ANNEXURE A

Decision last updated: 06 June 2012