RUSSO v BURWOOD MUNICIPAL COUNCIL SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL PRIESTLEY AP, SHELLER and BEAZLEY JJA 13 September 1996, 25 November 1996 [1996] NSWCA 459 BUILDING CONTROL AND TOWN PLANNING — Development Applications — Consent granted subject to conditions — Whether conditions imposed under s94 Environmental Planning and Assessment Act 1979 were unreasonable in the Wednesbury sense — whether conditions related fairly and reasonably to the subject development The appellants applied for development consent from the respondent council in respect of the redevelopment of premises in Burwood. The consent was granted subject to 14 conditions. The appellants appealed to the Land and Environment Court under s97 of the Environmental Planning and Assessment Act 1979 (the Act) in respect of three conditions. Pearlman J deleted condition 12, upheld condition 6 and varied condition 5. The appellants appealed in respect of conditions 5 and 6. Condition 5, as varied by Pearlman J, imposed a monetary contribution of $40,000 as a condition of development consent in lieu of the provision of 2 car parking spaces under s94 of the Act. The reasonableness of condition 5 was tested against the contents of the respondent's s94AB Contributions Plan (notwithstanding that the Contributions Plan did not apply to this Development Application). The appellant challenged the validity of condition 5 on 3 bases: (i) it was unreasonable in the Wednesbury sense, (ii) it did not fairly and reasonably relate to the subject development; and (iii) Pearlman J had made a mathematical error in calculating the s94 contribution. Condition 6 required the dedication of a strip of land 6.1m wide at the rear of the subject premises to the respondent free of charge for road widening purposes. Both the appellants and the respondent obtained valuations of this land. The appellants' valuation was $55,000 while the respondent's valuer stated that the land had a nominal value of only $5000. Pearlman J, accepting the respondent's valuation, held that the condition was reasonable. On appeal from Pearlman J, the appellants submitted that her Honour erred in her approach to the reasonableness of condition 6, and had also failed to determine whether the condition satisfied the second of the Newbury tests. HELD: (1) Appeal dismissed (2) Condition 5 was not unreasonable in the Wednesbury sense. Even if criticisms could be made of certain of the methodology in the Contributions Plan, any shortcomings in so far as they were relevant to condition 5, taken either separately or cumulatively were not of such a nature to render unreasonable any contribution assessed by reference to the Plan. (3) There was sufficient nexus between condition 5 and the development. Although the respondent did not propose any further public car parking facilities in the quadrant where the appellants' development was located, s94(1) could not be "read down" so that contributions only applied to the particular quadrant in which the development was situated because: (i) The interpretation of "area" within s94(1) of Stein J in Parramatta City Council v Peterson (1987) 61 LGRA 286 applied to the circumstances in this case; (ii) C110 of the Contributions Plan expressly denied that approach; (iii) As Burwood Town Centre is within a relatively small geographical compass, it would be unrealistic to expect that a development in one quadrant of the town centre would not impact on the other segments or quadrants of the town centre. 2 UNREPORTED JUDGMENTS (4) Pearlman J made no mathematical error in determining the number of car spaces for which a monetary contribution was required. (5) Her Honour correctly determined the question whether condition 6 was reasonable. The value of land required to be dedicated free of cost is a relevant consideration in determining whether a condition that land be so dedicated, is reasonable. (6) Although Pearlman J did not specify that she was dealing with the second of the Newbury tests, her Honour's findings J in relation to the demand on the rear lane generated by the development and the requirement for manoeuvrability of vehicles were only relevant if that was what she was doing. ORDERS Appeal dismissed with costs. Priestley JA I agree with Beazley JA. Sheller JA I agree with Beazley JA. Beazley JA This is an appeal from a decision of Pearlman J, Chief Judge of the Land and Environment Court, in which her Honour partly allowed and partly dismissed an appeal by the appellants under s97 of the Environmental Planning and Assessment Act 1979 (the EPA Act), against three conditions imposed by a development consent granted by the respondent in respect of the redevelopment of premises at 94 Burwood Road, Burwood. An appeal to the Land and Environment Court under s97 is by way of rehearing and the decision of the Court is deemed to be the final decision of the Council: s39 of the Land and Environment Court Act, 1979. The appeal to this Court is on a question of law only: s57 Land and Environment Court Act 1979. BACKGROUND On | November 1992, the appellants lodged a development application (the DA) for the redevelopment of 94 Burwood Road, Burwood (the premises) from a combined shop and residence into a proposed new retail shop on the ground floor level, storage and amenity areas on the mezzanine level and offices on the first floor. The front facade of the building is of heritage significance and the DA proposed that the significant heritage aspects of the building would be retained and repaired. Development consent was granted on 16 February 1993 subject to 14 conditions. Conditions numbered 5, 6 and 12 were the subject of the s97 appeal. Those conditions were in the following terms: "5. A contribution of $60,000 as payment in lieu of provision of three (3) off-street car parking spaces, being made to Council, with such contribution being paid prior to release of building plans; 6. The kind shown as reserved for rear lane widening purposes being dedicated free of charge to council for road purposes; 12. A contribution under s94 of the Environmental Planning and Assessment Act of $2,663.75 (community facilities) and $3622.70 (traffic facilities) being lodged with Council prior to release of building plans." The Chief Judge varied condition 5 so as to reduce the contribution from $60,000 (being in respect of three parking spaces) to $40,000. (being in respect of two parking spaces). Condition 6 was upheld and condition 12 was deleted by the Court. This appeal is in respect of her Honour's determinations in respect of conditions 5 and 6 only. CONDITION 5 The imposition of a condition requiring a monetary contribution is permitted by s94 of the EPA Act which provides: URJ RUSSO v BURWOOD MUNICIPAL COUNCIL (Beazley JA) 3 "(1) Subject to subs(2), where a consent authority is satisfied that a development, the subject of a development application, 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 consent to that application 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 subs(1) shall be imposed only - (b) to require a reasonable dedication or contribution for the provision, extension or augmentation of the public amenities and public services mentioned in that subsection." The respondent had assessed that the overall development required the provision of 9 car parking spaces. Six spaces could be provided on site by triple stacking in two car parking places. This was acceptable to the respondent. As the additional 3 car parking spaces could not be provided on-site, the respondent required, as a condition of development consent, that the appellants contribute $60,000 in lieu of provision of the 3 car parking spaces. The respondent had based the figure of $60,000 on the contribution rate which it applied as the general rate for car parking contribution at the time the development consent was granted, namely a rate of $20,000 per car space. The EPA Act was amended in 1991 so as to require local councils to prepare and approve a Contributions Plan for the purpose of imposing conditions under s94: see s94AB of the EPA Act. However, pursuant to s94(7), the requirement that any condition imposed by a development consent could only be imposed if it was allowed by and in accordance with an approved Contributions Plan, only applied to development applications made on or after 1 July 1993. As the DA subject of these proceedings was lodged on 5 November 1992, the respondent's "Contributions Plan No 3 - Public Car Parking", approved on 20 July 1993, was not relevant to the proceedings. Notwithstanding that, the respondent proposed to the trial judge that the reasonableness of condition 5 be tested against the contents of the Contributions Plan. The trial judge acceded to this course as the Contributions Plan included material which provided relevant historical background to the contribution rate which was in fact specified in condition 5. Her Honour noted that counsel for the appellants "did not strenuously object" to it. Counsel for the appellants did not contest the appropriateness of this course on the appeal. I will turn to the Contributions Plan shortly. The Chief Judge varied condition 5 by reducing the car parking contribution to $40,000 for 2 car parking spaces. The appellants contend that the condition should have been deleted on the ground that it was unreasonable in the Wednesbury sense and did not reasonably and fairly relate to the subject development: see Newbury District Council v Secretary of State for the Environment [1981] AC 578. Alternatively, they contend that her Honour erred, probably by making a mathematical error, in not reducing the car parking contribution to $20,000. In Newbury, the appellants had applied to the local planning authority for permission to use two hangars on what had been Membury Airfield as warehouses for the storage of synthetic rubber. Planning permission was granted subject to a condition that the buildings be removed at the expiration of a period of approximately 10 years. The appellants appealed against the imposition of this condition. The matter eventually reached the House of Lords where it was held 4 UNREPORTED JUDGMENTS that the condition was invalid. In reaching this conclusion, their Lordships referred to the test which a planning condition needed to satisfy in order to be valid. It is sufficient and convenient to refer only to the statement of Lord Fraser of Tullybelton at 607-608: "Tn order to be valid, a condition must satisfy three tests. First, it must have a planning purpose. It may have other purposes as well as its planning purpose. But if it is imposed solely for some other purpose or purposes, such as furtherance of the housing policy of the local authority, it will not be valid as a planning condition... Second, it must relate to the permitted development to which it is annexed. The best known statement of these two tests is that by Lord Denning in Pyx Granite Co Ltd v Ministry of Housing and Local Government [1958] 1 QB 554... at 572: "Although the planning authorities are given very wide powers to impose "such conditions as they think fit', nevertheless the law says that those conditions, to be valid, must fairly and reasonably relate to the permitted development. The planning authority are [sic] not at liberty to use their powers for an ulterior object, however desirable that object may seem to them to be in the public interest." Thirdly, the condition must be 'reasonable' in the rather special sense of Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223, 229. Thus it will be invalid if it is "so clearly unreasonable that no reasonable planning authority could have imposed it' as Lord Widgery CJ said in Kingston-upon-Thames Royal London Borough Council v Secretary of State for the Environment [1973] 1 WLR 1549, 1553." Lord Fraser added at 608: "Tt may not be strictly necessary to specify the second of these tests separately, as it may be included within the third, but I think it is desirable to set it out as a separate test lest it be overlooked." l agree with this observation. However, even if the tests are properly specified in a tripartite fashion, it is obvious that if the second test is not satisfied, the third test could not be satisfied. Lord Fraser further observed that the reason for the condition was to enable the planning authority to improve or restore the amenity of the neighbourhood by getting rid of ugly buildings. Whilst that was recognised as a "very proper object", his Lordship was of the opinion that "it had nothing particularly to do with the use of the buildings as warehouses". Lord Fraser further noted at 608: "One reason, relevant to the instant case, why it would be wrong to secure removal of buildings by the use of a condition unrelated to the permitted development is that it would enable the planning authority to evade its liability to pay compensation for removal [under the relevant legislation]". The tests in Newbury's case have been accepted as applying to s94 of the EPA Act: see Parramatta City Council v Petersen (1987) 61 LGRA 286; Janstar Pty Ltd v Liverpool County Council (1988) 35 APA 315 at 325. REASONABLENESS OF CONDITION 5 Overestimation of projected floor space growth Counsel for the appellants submitted that condition 5 failed the third test in Newbury as the Contributions Plan was deficient in a number of respects such that any contribution calculated by reference to it was unreasonable. The three aspects in which the Contributions Plan was said to be deficient were: 1. that the gross floor space growth was an overestimation by the respondent and was based on "boom time" statistics; URJ RUSSO v BURWOOD MUNICIPAL COUNCIL (Beazley JA) 5 2. The calculations for the provision and acquisition of development at 14-16 Burleigh Street, Burwood included properties which could not be used for parking purposes unless they were incorporated into an overall development scheme; and 3. The calculations adopted 1993 values for properties to be acquired and at the same time factored in an indexing of values from July 1992 to July 1993 when the Plan was adopted. GROSS FLOOR SPACE CALCULATION In the Contributions Plan, the respondent had estimated that there would be a growth of 90,000 m2 gross floor space (comprising 60,000 m2 commercial and 30.000 m2 retail floor space) in the Burwood Town Centre by the year 2000. The appellants' expert evidence, given by Mr Player, a town planner from Don Fox Planning Pty Ltd, was that this was a substantial overestimation and that the likely growth was 10,509m2. The trial judge did not make any specific finding as to the figure of 90,000m2. Rather, her Honour approached the matter in accordance with the principles laid down in Newbury's case and Peterson's case. Her Honour's findings were: "T do not think that condition 5 is unreasonable simply on account of these deficiencies. In the first place, projections of floor space growth are estimates only, upon which the opinions of experts might differ. Mr Player's estimates did differ substantially from those set out in the Plan, but I do not consider this difference to render the condition unreasonable. Secondly, the Plan contemplates that the provision of 2400 off-street car spaces would be required by reason of estimated growth in floor space, but due to planning constraints, the Plan envisages the provision of only 200 further car spaces from the contributions to be levied. I conclude from this that differences in the estimates of floor space growth would not significantly impact upon the Plan's final calculations." No error of law is demonstrated in this passage. It reflects a proper application of the third test in Newbury. Accordingly, the appellants have failed to establish that there was a deficiency in the Contributions Plan on this basis. INCLUSION OF 14-16 BURLEIGH STREET IN THE CALCULATIONS The Contributions Plan provided that car parking contributions accepted in place of on-site parking would be used to acquire 8 nominated properties within the Municipality. The value of each property was also specified. Two of the properties, 14 and 16 Burleigh Street, each with a specified value of $250,000, were heritage listed properties. The respondent's deputy town planner agreed in evidence that, having regard to their heritage status, the two properties would have to be incorporated into a redevelopment if they were to be a source of parking facilities. He also agreed that the question of any redevelopment of the sites would depend upon "the returns", eg, by way of rental income, which might be obtained. However, the respondent in calculating the cost of provision of 200 car parking spaces, had failed to take into account any projected income from these two sites. The deputy town planner said that if these two properties were eliminated as sites to be acquired for car parking, the acquisition cost per car parking space would be reduced by $2500. The trial judge dealt with this alleged deficiency briefly, stating: "... the fact that the Burleigh Street properties were included in the Plan's calculations does not itself render condition 5 unreasonable, because they are properties which could be utilised to provide off-site parking, albeit only in the event of an overall redevelopment." 6 UNREPORTED JUDGMENTS Notwithstanding the brevity of her Honour's reasons on this point, I do not discern any legal error. Her Honour's statement recognises that the mere inclusion of these two properties did not, of itself, render the condition unreasonable. Something more would need to be shown. A redevelopment can take a multitude of forms and need not involve the production of income to the owner. Benefits from the development may be structured, in whole or in part, in a non-financial way. There was no evidence in this case that any redevelopment of the site was likely to result in any income or direct financial return to the respondent. Further, the deputy town planner's concession that the car parking contribution should be reduced by $2500 failed to take account of the possibility, if not the necessity, of the acquisition of other property in lieu of the Burleigh Street properties, if those properties were not to be used, in order to obtain sufficient area to provide 200 car spaces. ADOPTION OF 1993 VALUATIONS The third deficiency alleged by the appellants was that the properties to be acquired for car parking purposes had been valued as at January 1993. The acquisition cost derived on this basis had then been used in the formula for the calculation of the Plan's car parking contribution. At the same time, there had been factored into the formula an indexing of property values of 1.1% from July 1992 to July 1993, or $229 per car space. There was thus an undoubted error in the sense that there had been a "doubling up" of the cost of acquisition in the formula. Her Honour rightly treated this as an "insubstantial figure'. In fact, the figure may be less than $229 as the 1.1% indexation figure was for a 12 month period, where as the "doubling up" had only occurred over a 6 month period. However, whatever be the precise extent of the doubling up, it is in such a small amount as to be insufficient to categorise the condition, as a whole, as unreasonable. In addition to referring to the three alleged deficiencies separately, counsel for the appellants sought to rely upon their cumulative effect to support his submission that they were such as to render unreasonable any car parking contribution assessed by reference to the Plan. It is always possible that deficiencies in a plan or scheme or formula taken in isolation are not of great significance but, when taken together, or in some combination, have an effect which is substantial. That, however, is not the case here. Although three deficiencies in the Plan were alleged, counsel for the appellants was only able to demonstrate two, the first, in relation to the Burleigh Street properties; and the other in relation to the double counting. The latter, as has been seen, was insubstantial and there was no evidence that the former had any impact upon the calculation of the car parking contribution for the purposes of the Plan. It follows that this ground of appeal must fail. LACK OF NEXUS BETWEEN CONDITION 5 AND THE DEVELOPMENT Counsel for the appellants next submitted that there was no nexus between condition 5 and the development. This submission was based upon the respondent's approach in the Contributions Plan of dividing the Burwood Town Centre into quadrants. The appellants' development was located in the north eastern quadrant for which the respondent had no plans to provide further public parking facilities. It was submitted therefore that where s94(1) referred to "the provision of or increase the demand for public amenities and public services WITHIN THE AREA" (emphasis added), it referred, in this case, to the area in which the development was located, namely, the north eastern quadrant. Thus, if a council chose to divide a larger area such as a town centre into smaller, URJ RUSSO v BURWOOD MUNICIPAL COUNCIL (Beazley JA) 7 identifiable segments for relevant planning purposes, s94(1) had to be read down accordingly. It was submitted, therefore, that to the extent that Peterson's case was authority to the contrary, it was distinguishable. In Peterson, Stein J dealt with the meaning of "the area" in subs94(1). His Honour stated at 292-293: "(Counsel for the parties] have made competing submissions as to the meaning of "the area" in subs(1). 'Area' is defined in s4 of the Environmental Planning and Assessment Act by reference to the definition in the Local Government Act 1919, viz, 'city, municipality or shire". [Counsel for the appellant] submits that this definition assists in a broad view of the section. On the other hand, [counsel for the respondent] argues that the Local Government Act definition does not apply because the context or subject matter" indicates or requires otherwise. The context, he submits, is not the local government area but the area proximate to the development site. In my opinion "area" in s94(1) means the local government area The council is to consider whether the development "win or is likely to require the provision of or increase the demand for public services" within the council area. Additionally, and by contrast to the reference to 'the area" in s94(1), I note that a number of the s90 heads of consideration refer to the "locality" of a development." The appellants' submission must fail for a number of reasons. First, the Contributions Plan denies that approach. Whilst it refers to existing and proposed car parking in the north east, north west, south east and south west sectors of the Town Centre, it states, in cl10 "that the Burwood Town Centre will be considered as a single entity for the sake of this plan, rather than as separate car parks or as four quadrants". Counsel for the appellants pointed out that this statement was made in respect of a car parking contribution formula (formula 1) which did not apply to this case. No like statement was made in respect of the formula (formula 2) which was applicable here. This submission however ignores both the generality and the express words of this statement in cl10. As a matter of ordinary language, it was not restricted to matters relevant to formula 1, nor was there anything in the context of cll0 which required it to be so restricted. It did not require repetition, therefore, in relation to formula 2. Secondly, there is nothing in s94(1) which either permits or requires the section to be read down in the way suggested by counsel. In my opinion, Peterson's case applies with full effect to the circumstances here, notwithstanding that the respondent, for some purposes, chose to divide the Burwood Town Centre into smaller segments. Finally, the Burwood Town Centre is within a relatively small geographical compass. It would be unrealistic to expect that a development in one segment or quadrant would not be "likely to...increase the demand for public amenities and public services within [the larger geographical] area" - in this case the Town Centre. MATHEMATICAL ERROR IN NUMBER OF CAR PARKING SPACES Counsel for the appellants next submitted that her Honour had made a mathematical error in determining that the number of car parking spaces should be reduced BY 1, requiring a total contribution of $40,000. Rather, it was submitted, her findings were such that the number of car parking spaces should be reduced TO 1, requiring a contribution of $20.000. Although her Honour's judgment superficially gives rise to some confusion on this point, it is apparent that there was no error. It is necessary to recount the facts on this issue briefly to demonstrate that this is so. The respondent had assessed 8 UNREPORTED JUDGMENTS the number of car parking spaces required at 9, on the basis of the total floor area of the development. The appellants was able to provide 6 spaces on-site. The respondent therefore imposed, as condition 5 of its development consent, a requirement that the appellants make a monetary contribution for 3 car park spaces. However, 66.9m2 of the mezzanine level of the development was to be used as storage space only and would not, therefore, generate a demand for parking. That floor space, that is 66.9m2, otherwise represented 1.8 car spaces. Her Honour's findings and conclusions were stated in these terms: "[the mezzanine level storage area] has a floor space of about 66.9m2, which represents 1.8 car spaces. If the parking requirements were recalculated, the applicants would be required to provide an additional one, or rounding up, two off-site parking spaces". This conclusion is derived directly from the evidence of Mr Player, the appellants' town planning expert, that: "The mezzanine level storage area is the equivalent of 1.8 car spaces, which would effectively reduce the shortfall in on-site carparking to one or TWO SPACES (ROUNDING UPWARDS) ". (emphasis added) The orders made by her Honour reveal that her Honour chose to round the number of car parking spaces up to 2. In other words, 3 car parking spaces were under consideration. 1.8 spaces had to be deducted, leaving 1.2 spaces. If 1.2 spaces were to be provided, 2 spaces would in fact have to be provided in the sense that part of a car parking space is not a car parking space. Accordingly, there was no error in her Honour "rounding up" the figure to 2 car parking spaces. It should also be noted that the calculation of 1.2 may itself have been a mathematical error and should have been 1.4. Having regard to my conclusion it is not necessary to deal further with this calculation, other than to note it does not assist the appellants. Initially, counsel for the appellants submitted that the error was mathematical. However, once the mathematics were explained, he submitted that the usual approach was to "round down" - in respect of any car parking space requirement below a half and a failure to do so was unreasonable. The evidence did not disclose any usual approach in this regard, either of the respondent or as a matter of town planning practice. However, the respondent's deputy town planner gave evidence that, in respect of a previous development application in respect of these premises, the respondent had rounded down the number of 3.8 car parking spaces to 3, and her Honour referred to this in her judgment. Counsel for the appellants submitted that this evidence demonstrated that her Honour's decision was tainted by Wednesbury unreasonableness. I do not agree. It is not unreasonable, in the Wednesbury sense, to round up a fraction of a car parking space so as to provide for a whole car space. Accordingly, this submission must fail. CONDITION 6 Before dealing with the issues raised in respect of condition 6, it is necessary to deal, in a little more detail, with the zoning, road and parking details relevant to the development. The appellants' land is zoned Business Special (District Centre) 3(C1) and is also subject to a Road Reservation in respect of a strip 6.1 metres wide at the rear of the premises. The appellants' premises comprise lot 4 in Deposited Plan 27884 and is approximately half way along a block bounded by Wilga Street on the south and Meryla Street on the north. The properties in the block, including the appellants' premises, commencing at the Wilga Street corner, are Nos 88-98 Burwood Road, URJ RUSSO v BURWOOD MUNICIPAL COUNCIL (Beazley JA) 9 being lots 1-6 respectively, in the Deposited Plan, and the Coronation Club, which is on the corner of Meryla Street. There is a right of way, 3.81 metres wide, along the rear of Lots 1-6 which in effect, comprises a laneway, running from Wilga Street to the boundary of the Coronation Club and which is used by the proprietors of lots 1-6, to gain rear car access to their premises. The right of way falls within the area affected by the Road Reservation. Access to the rear of the Coronation Club is obtained from Meryla Street. In June 1987, the respondent lodged an application with the Department of Conservation and Land Management for the opening of a road "of width 6.1m throughout its length...between Wilga and Meryla Streets". It is not possible from the evidence to obtain a complete history of the road opening application. It appears however that there was a Land Board hearing, subsequent to which the Land Board recommended that "the road opening only proceed to the southern boundary of the Coronation Club site and not proceed through the Club's Car Park to Meryla Street". On 9 March 1993, the Department advised the respondent that: "... this Office is not prepared to proceed on the resumption for a width of 6.1m through the lands to the south of the Coronation Club. It is prepared to process your application and resume a road of the lesser width of 3.81 m." This meant that the road would solely comprise the right of way. The respondent responded to this advice by confirming that its application was for "the opening of a road of width 6.1 m throughout its length...between Wilga and Meryla Streets". The council further stated that: "Existing vehicular access is available to properties 88-98 Burwood Road and the rear of the Coronation Club building by a private right-of-way 3.81 m in width. There appears to be little point in resuming a road of width 3.81 m which would take the place of this right-of-way. The right-of-way does not allow for two-way traffic movement at any one time, with manoeuvring requiring the use of adjacent land. It is the very feature of Council's application that a right-of-way of inadequate width becomes, with the addition of adjacent land reserved for that purpose, a public lane way of 6.1 m width, which does allow two-way traffic movement and width for manoeuvring. Opening of a road for the southern section, to the rear of 88-98 Burwood Road, at width 3.81 m is unacceptable... " The Department wrote to the respondent on 16 July 1993 stating: "Tt is now proposed to: [1] acquire as public road lots 1 to 6 [inclusive] Council may now proceed to negotiate with the affected land owners towards settlement of compensation." The effect of this approval was to permit a road opening of 6.1 m width at the rear of lots | to 6 inclusive. The proposed road would incorporate the existing right of way of 3.8 m and would stop at the southern boundary of the Coronation Club. Access to the Coronation Club would be gained from Meryla Street. At first instance, the respondent submitted that the appellants' development would increase the demand on the existing unsurfaced laneway at the rear of the subject property and that the dedication of land at the rear of the premises would provide, in part, for the construction of the proposed road. It was submitted therefore that the condition was for a planning purpose and thus satisfied the first of the three Newbury tests. The respondent had also submitted that there was the necessary nexus to the proposed development so as to satisfy the second test as the provision on site of two lots of 3 vehicle stacked parking would require the 10 UNREPORTED JUDGMENTS construction of a roadway 6.1 m in width for the turning and passage of vehicles. Thirdly, the respondent had submitted that the proposed development utilised the subject land to its full potential such that the excision of the land subject of the condition would have no impact on the maximum potential for development. This submission was based upon the valuation of Mr Hubbard obtained by the respondent for the purposes of the case. In his valuation, Mr Hubbard stated that the land subject of the proposed dedication had a nominal value only, which he estimated at $5000. In his valuation report. Mr Hubbard stated: "Tn assessing the value of the subject land to the owner, we have assumed it to be zoned Business Special District Centre 3(c1). In view of Council's Development policy, we believe the recently submitted and approved Development Application is the optimum development permissible on the site. Whilst the zoning may permit a floor space ratio of 2:1, Council's car parking policy precludes the site from total development. On the basis that the approved development application is the highest and best use of the land, we consider on the above approach that the development potential of the land is not affected by the proposed acquisition and the effective loss to the owner is NIL. From a compensation viewpoint, we consider a nominal amount of $5,000.00 is appropriate for the acquisition of this subject land." Counsel for the appellants had submitted to the trial judge that condition 6 was impermissible, because it dealt with a matter not relevant to the actual development and was thus contrary to the provisions of s91(3)(a) of the Environmental Planning and Assessment Act. Her Honour rejected this argument as s91(3)(a) was not the relevant source of power: Fitch v Shoalhaven (1987) 67 LGRA 165. There was no issue on the appeal in relation to s91(3)(a). Counsel for the appellants also submitted that the value of proposed lot 3 was such that condition 6 was unreasonable. In this regard, the appellants relied upon a valuation of Mr Large. Mr Large had valued the area proposed to be excised at $55,000. His valuation method was to value the land on a price per unit area basis. The Chief Judge, after recording the submissions of both counsel, stated: "Tt must be borne in mind that the respective valuations of the proposed lot 3 are relevant only to the issue of the reasonableness of condition 6. These proceedings do not involve a question of compensation to the applicants for the resumption of land. The council may, under s94(1) of the Act, require the dedication of land free of cost - the only question is whether, in accordance with the Newbury tests, it is reasonable to impose a condition to that effect. So far as reasonableness of condition 6 is concerned, I prefer Mr Hubbard's assessment of value. I accept that the proposed development will generate some demand on the rear lane and I accept that the provision of a roadway of 6.1 m width is required for the manoeuvrability of vehicles, especially with the provision of stacked parking on the subject land. In these circumstances, and as I think that it is not unreasonable to regard the proposed lot 3 as having a nominal value, I find that condition 6 is not unreasonable and should be imposed." Counsel for the appellants submitted that her Honour erred in her approach to the reasonableness of condition 6 and further failed to determine whether the condition satisfied the second of the Newbury tests. REASONABLENESS OF CONDITION ASSESSED AGAINST VALUE OF THE LAND URJ RUSSO v BURWOOD MUNICIPAL COUNCIL (Beazley JA) 11 Counsel for the respondent submitted first that it was an incorrect approach to use the valuation evidence to assess the reasonableness of the condition. This submission has the immediate shortcoming that, at the trial, both counsel approached the issue of the reasonableness of the condition in this fashion and both tendered valuation evidence. The difficulty for the appellants was that the Chief Judge preferred the lower valuation of Mr Hubbard. In any event, the value of land required to be dedicated free of cost is, in my opinion, a relevant consideration in determining whether a condition that land be dedicated free of cost, is reasonable. Counsel for the appellants next submitted that her Honour erred in preferring the valuation of Mr Hubbard, contending that his valuation was based on the fact that the land was affected by the road reservation proposal contrary to proper valuation principles: see Parramatta CC v Gestetner Pty Ltd (1978) 37 LGRA 246. However, this was not the basis upon which Mr Hubbard approached his valuation. Rather, he assessed the value on the assumption that the land was zoned Business Special (District Centre) 3(cl). He noted that the effect of the respondent's car parking policy procedures precluded the site from total development and that the proposal in the DA therefore represented the optimum development of the site. Consequently, the loss to the appellants of the land required to be dedicated was nil. He thus allowed a nominal value of $5000. Accordingly, the appellants has also failed on this issue. Counsel for the appellants further submitted that the Chief Judge, having approached the issue of the reasonableness of the condition by reference to the valuations, then overlooked the fact that the primary need for the land required to be dedicated was to satisfy the respondent's desire to provide a service lane. It was submitted that any need for manoeuvrability within the laneway itself arising from the development was a direct result of the respondent's action in forbidding the erection of a building over the rear section of the land which had been identified for resumption. However, there was no evidence, for example, to suggest that had part of the rear of the site been able to be built upon, the appellants would have provided or would have been able to provide car parking other than by way of 2 triple stacked spaces or in such a way that there would not be such a need for manoeuvrability within the laneway. FAILURE TO CONSIDER NEXUS It was next submitted that the Chief Judge failed to determine whether the second of the Newbury tests had been satisfied, that is, whether the condition fairly and reasonably related to the development. In the passage of the judgment to which I have referred, her Honour stated that the only question was whether, in accordance with the Newbury tests, it was reasonable to impose a condition to the effect of condition 6. Her Honour had earlier set out the 3 Newbury tests in point form. It was not suggested her Honour's summation of the tests was wrong. Her Honour then dealt with the issue of reasonableness having regard to the valuation evidence. She next found that the proposed development would generate some demand on the rear land and that the provision of the roadway of 6.1 m width was required for the manoeuvrability of vehicles having regard to the stacked parking arrangements. Although in making these findings her Honour did not specify that she was dealing with the second of the Newbury tests, they were only relevant if that was what she was doing. Further, her Honour posed the question whether the condition was reasonable having regard to the Newbury tests. It cannot be assumed that the use of the plural was a slip by her Honour. When it is borne in 12 UNREPORTED JUDGMENTS mind that a condition which does not satisfy the second of the Newbury tests, could not satisfy the third, I am not satisfied that her Honour failed to consider whether the condition fairly and reasonably related to the subject development. In my opinion, the appeal should be dismissed with costs. Appeal dismissed with costs. Counsel for the Appellants: AJJ Thompson 10 Solicitors for the Appellants: Russo and Co Counsel for the Respondent: SB Austin QC/JJ Webster Solicitors for the Respondent: John Corcoran and Co203040