Land and Environment Court of New South Wales CITATION : Dabbagh Holdings Pty Ltd v Fairfield City Council [2010] NSWLEC 1311 This decision has been amended. Please see the end of the judgment for a list of the amendments. APPLICANT Dabbagh Holdings Pty Ltd PARTIES : RESPONDENT Fairfield City Council FILE NUMBER(S) : 10534 of 2010 CORAM: Dixon C KEY ISSUES: DEVELOPMENT MODIFICATION :- s94 contributions condition in respect of car parking . Environmental Planning and Assessment Act 1979 LEGISLATION CITED: Fairfield Local Environmental Plan 1994 Fairfield City Wide Development Control Plan Fairfield City Council Section 94 Developer Contributions Plan 1999 Arkibuilt Pty Ltd v Ku-ring-gai Council [2006] NSWLEC 502; 148 LGERA 85 CASES CITED: Dogild Pty Ltd v Warringah Council [2008] NSWLEC 53; 158 LGERA 429 Newbury District Council v Secretary of State for the Environment [1981] AC 578 DATES OF HEARING: 3 - 4 November 2010 DATE OF JUDGMENT: 15 November 2010 APPLICANT Mr J Johnson (barrister) SOLICITOR Kazi Portolesi Lawyers LEGAL REPRESENTATIVES: RESPONDENT Mr J Thompson SOLICITOR Ritchie & Castellan JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Dixon C 15 November 2010 10534 of 2010 Dabbagh Holdings Pty Ltd v Fairfield City Council JUDGMENT Summary 1 The primary facts in this case are not in dispute. 2 On 23 April 2008 Fairfield City Council granted the applicant a conditional development consent DA 1273/2007 to use an existing two storey commercial building as a restaurant and reception centre at 15 Station Parade, Fairfield (the consent). 3 The consent includes the following conditions: Condition 2 Section 94 Contributions "2. Prior to the continued use and occupation of the premises, a receipt for the payment to Fairfield City Council of Section 94 contributions (EPA Act 1979) for works detailed in the administration sheet attached to this consent shall be submitted to Council. The total contribution to be paid to Council (as in force at the date of this consent) is $297,376 for the provision of sixteen (16) car parking spaces with the Fairfield Town Centre. * Contribution rates will be adjusted in line with the Non –Dwelling Construction Implicit Price Deflator for New South Wales. The payment of contributions will be adjusted to the amount applicable at the date of payment. Refer to the Section 94 Plan for more information on the frequency of contribution adjustments. ….. Condition 11 Hours of Operation "11. (a) The approved hours of operation for the use of the premises are: Monday to Sunday: 10:00am to 12:00 midnight (b) All patrons shall leave the premises by 11:00pm and all staff shall leave the premises by 12:00 midnight ." 4 On 18 February 2010 the applicant lodged a modification application under s96(1A) Environmental Planning and Assessment Act 1979 (EPA Act) to modify the consent. The modifications included: an amendment to condition 11 to restrict the hours of operation of the reception centre to 5.00pm until 12.00-midnight (daily); and the deletion of condition 2; and the requirement to pay any s94 contributions to council for car parking spaces. 5 This modification application was refused by the Council for the reasons set out in its notice of determination issued to the applicant on 29 June 2010. This appeal, pursuant to s96 (6) of the EPA Act, is against council's refusal and includes an appeal under s94B (3) of the EPA Act against the imposition of condition 2 on the basis that the s94 contribution is unreasonable in the particular circumstances of this case. 6 There is no merit ground to refuse the applicant's request to restrict the hours of operation of the reception centre. However, the limiting of the hours of operation to 5.00pm to 12.00pm midnight (daily) is one of the facts that the applicant contends justifies the deletion of condition 2 and its requirement to pay any s94 contributions for car parking spaces. 7 The central issue for my determination is whether the s94-contribution required by condition 2 is unreasonable on the facts. 8 Following a consideration of the evidence, submissions and the relevant matters in s96 (6) and 94B(3) and 79C of the EPA Act, I have decided to allow this modification application appeal. Accordingly, I order that condition 11 be amended to restrict the reception centre's hours of operation to 5.00pm until 12.00 midnight (daily) and that condition 2 be deleted because it is unreasonable in the circumstances of this case. Contentions 9 The contentions raised by the council's statement of fact and contentions include: undesirable precedent/ consistency of application of policy; potential to increase demand for on – street parking, which would lead to the need for additional public car parking; potential for adverse impact on existing or future nearby businesses and estoppel by reason of (i) withdrawal of Class 4 proceedings and (ii) offer to pay contribution. 10 However, at the hearing it was submitted by council that this case turns on my application of cl 12.6.1 of the DCP to the facts of this case because the applicant relies upon that clause to support its submission that the requirement for section 94 contributions for car parking for this development should be waived. 11 Sections 96 (IA) and 94B(3) of the EPA Act set out the legal framework for the review of conditions 2 and 11 in this modification appeal. Condition 11 12 At the outset the parties advised me that the planners agreed that there is no merit ground to refuse the proposed modification of the hours of operation of the development in condition 11. While council submits that the applicant relies in part on the modification to justify the deletion of condition 2, that fact does not justify a refusal of this modification of condition 11 after a consideration under section 79C of the EPA Act. 13 Therefore, based on the evidence before me I approve the modification as proposed to condition 11 in relation to the hours of operation of the development. Condition 2 14 Section 94B(3) states: (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. 15 In this appeal the parties accept that condition 2 is of a kind allowed by a contribution plan (submission 3 of the respondent's written submissions (RSW)). A valid appeal under section 94B(3) presumes as much. 16 This modification appeal does not challenge the validity of condition 2. Despite that fact, the respondent's written submissions addressed that very issue when they referred me to the principles in such cases as Dogild V Warringah Council (2008) 158LGERA 429; and Newbury District Council V Secretary of State for the Environment (1981) AC 578 (para 4 -.8 of the RWS) and asked me to consider whether the condition is "fair and reasonable". 17 In this s94B (3) appeal I must determine if the amount required by condition 2 is "unreasonable in the particular circumstances of this case" and if so should it be disallowed or amended. This requires a merit assessment as to whether on the facts of this particular case the condition is reasonable not whether it is valid. Background 18 It is agreed that the site is zoned Sub Regional Business Centre 3(a) under the Fairfield Local Environmental Plan 1994 (the LEP). The use of the premises as a wedding reception area is permissible use within this zone. 19 There are two planning instruments that are directly relevant to the site: Fairfield City Wide Development Control Plan (Chapter 12) (the DCP) and Fairfield City Section 94 Developer Contributions Plan 1999 (Contribution Plan). 20 The DCP specifies the number of car parking spaces required for various forms of development and the section 94 plan deals with the calculation of any monetary contribution for any shortfall in the parking provided onsite. 21 The town planning experts, Mr Tillot on behalf of the applicant and Mr Jones on behalf of the council, agree that the site is within the Fairfield Town Centre Precinct and chapter 9 of the contributions policy applies. It is also agreed that any "merit " variation of the car parking requirement rate for a development is determined pursuant to the DCP car parking provisions of the DCP and not the contributions plan. 22 It is also agreed between the planning experts in their joint report (exhibit 3) that condition 2 was imposed to require the payment of a section 94 contributions towards car parking within the Fairfield town centre pursuant to the contributions plan. 23 According to the evidence council resolved on 24 July 2007 to repeal the contributions plan (with the exception of that part which deals with the Canley Heights catchment) and prepare a strategy for future car parking in the Fairfield Town Centre. The applicant submits that those facts are relevant in a consideration of the reasonableness of the imposition of condition 2. 24 The resolution to repeal the contribution plan is not relevant because I must apply the current contribution plan to the facts. Council's Manager Strategic Land Use and Planning, Mr Colonga, confirmed in his oral evidence that the contributions plan has not been repealed and is the relevant plan for the purposes of this development. 25 Furthermore, he said that council's memorandum (exhibit 4) about the status of the projects identified in the plan is incorrect. As I understand his oral evidence the council has acquired land using the unspent section 94 contributions in the eastern precinct of the Fairfield Town Centre. However, the development of that land for public car parking, which the applicant submits is outside the identified schedule of works in the plan, has not been commenced. 26 Based on the wording of the contributions plan the projects remaining for completion have been completed and the unspent money has been applied to the purchase of the land described in 9.2.4. While I understand that council intends to develop public car parking on the acquired land, such development is outside the identified project; and therefore outside the contributions plan. 27 The council could not reasonably ask this applicant to make a section 94 contributions if the identified projects have been completed because monies received under the plan can only be applied to projects identified in the plan. I reject council's submission that council could lawfully apply monies received under condition 2 to the development of car parks on Nelson Street and 1 and 3 Wilga Street because they are not identified projects under the plan. 28 Based on the oral and written evidence (including the terms of the contributions plan) the projects remaining for completion in 9.2.4 of the plan have been completed. Therefore, the section 94 contribution required by condition 2 is unreasonable. Clause 12.6.1 of the DCP The applicant submits that this development falls squarely within the "Exceptions to the Rules" cl12.6.1 of the DCP. 29 The clause states: "12.6.1 Exceptions to the Rules Council encourages innovative approaches to the issue of parking provision where it can be demonstrated that the aims of this Code can be satisfied. In those instances where the applicant can demonstrate that the use/activity will generate a demand for parking outside those times of peak demand is likely to be expected (for example, restaurant peak times and retailing peak times rarely coincide) Council will consider variations to the requirements of this code. Similarly, if it can be shown that the requirements of this code are excessive Council may vary its application. The validity of the applicant's arguments must be demonstrated by presentation of relevant data and practical examples of comparable situations. The provision of nearby public car parking in the type of transport used to gain access to the premises, along with car ownership rates among users, will also be considered as mitigating factors in determining appropriate parking rates." 30 The applicant submits that the car parking required under the DCP should be waived under cl 12.6.1 because the restricted hours of operation of the reception centre and the traffic survey evidence demonstrates that the use will satisfy the aims of the code (set out in the context and objectives at p249 of the council's bundle) without the provision of 16 car spaces. Furthermore, the applicant submits that a waiver of the parking space requirement is consistent with council's approach to the comparable development at Ware Street. The evidence is that in 2007 council's waived the car parking requirements on similar grounds; where the use generates an evening operation when there is sufficient public parking available. 31 The experts agree that the restriction of the hours of operation to the evening warrants a reduction in car parking for the proposed development. 32 However, the council submits this factor was taken into account at the time of the calculation of the car-parking requirements for the development. Council says that condition 2 has already been discounted in recognition of the hours of operation because the council applied "the commercial rate" rather than the higher "entertainment facility rate" detailed in the DCP. 33 In reciting the history of the development of the site the experts detail in their joint report that, when council granted the consent on 23 April 2008 for the use of the existing two storey reception centre, it approved a development which offered 3 car spaces rather than the 79 car spaces required under the DCP. They quoted at length the assessing officer's report. At p3 of exhibit 3 it records the following: " While the proposed development should provide an additional 79 spaces on site in order to comply with the DCP, this is considered unnecessary, because the reception centre operates after hours and would have less of an impact on surrounding streets than would an activity that operated throughout the day." 34 The experts note that the assessing officer discounted the car parking required by the DCP after a consideration of the applicant's traffic study prepared by Thomson Stanbury Associates Parking Study for 15 Railway Parade Fairfield dated November 2007 (the Stanbury report) which concluded that there is surplus parking capacity within the immediate vicinity to accommodate the reception area during the peak operating hours, being Friday, Saturday and Sunday evenings. 35 It is submitted by the applicant that this consideration of the existing available parking and the after hours operation is consistent with the approach taken by the council in its assessment of the parking requirements for the reception centre in the 2007 Ware Street development (which the applicant relies upon as a comparable development for the purposes of clause 12.6.1 of the DCP). In the Ware Street development the sufficiency of parking justified, according to the applicant, the waiver of any contribution in lieu of a shortfall of 187 spaces. 36 The experts agree that by applying the commercial rate for the development the council assessed a requirement for 36-car parking spaces. The breakdown being: 3 spaces provided onsite, a discount for the section 94-contribution of $21,500 received by council in 1978 for 17 spaces; leaving the remaining shortfall of 16 car parking spaces which equates to a monetary contribution in the sum of $297,376, calculated under the contribution plan at that time. The current contribution rate of $17,371 per space as detailed in exhibit 7 table F. 37 It is council's position that the application of the commercial rate in lieu of the entertainment facility rate for this site evidences the discount allowed in recognition of the "non peak" operating hours of the reception centre and the sufficiency of parking at that time and that no further cl 12.6.1 discount is appropriate in the circumstances of the case. 38 Mr Jones is of the opinion that the reduction in car parking to 36 spaces is fair and reasonable and has a sound-planning basis. He says the lower base line commercial rate has been applied rather than the higher entertainment rate and that recognises the increased availability of parking in the evening (p12 of exhibit 3). Mr Jones's evidence is that there should be "…an equitable approach to ensure that all developments in the town centre contribute to the pool of car parking (onsite and off site) in a consistent manner. It also ensures equity in the provision and use of public car parking spaces in the evening period." 39 In rejecting what he describes at p13 of the Joint report as the "first come first served principle" he states at p13 of the exhibit 3: "the basis of the section 96 application is that council cannot/should not require additional on site car parking or contribution towards public carparking unless the proposed development manifests in a demand for car parking that numerically exceeds the supply of parking in the vicinity of the site unless the use of car parking supply in the vicinity is reaching saturation . The ARUP and Thompson parking studies establish that there is a pool of car parking available in the evening hours. This does not mean that the subject application should be entitled to rely upon the use of a significant proportion of those spaces on a "first come first served" basis . This would be inequitable …. It would be inequitable to further reduce the car parking requirement in respect of the proposed development and then for council at a later date, and upon the pool public parking use reaching or nearing saturation, to require other developments to provide parking on site or pay a contribution because the available public parking pool has been depleted by previous "non contributing development approvals." 40 While I accept Mr Jones' opinion "that planning needs to consider the cumulative impacts of development over time," such a consideration cannot displace the legislative framework for the lawful imposition of a section 94 condition. I prefer the evidence of the applicant's planner because he has addressed the reasonableness of the condition on the current facts, including the latest traffic study and in accordance with the DCP and has had regard to the demonstrated reasons why the exception to the rule clause 12.6.1 should apply in the circumstances of the case. 41 I accept the evidence at p13 of exhibit 3 that "the parking report confirms that the "short term "impact of this development will be minimal as the reception centre does not operate during normal business hours and because in the evening spaces remain available in the locality notwithstanding the operation of the subject business." I do not accept, as Mr Jones's evidence states, that the waiver of the s94 contribution in this case will have any precedent effect because a challenge under section 94B(3) is dependant upon the particular circumstances of the case. Nor do I accept if the contribution is waived or reduced further it "would be difficult to for council to require car parking from future development within the town centre." The imposition of a condition on a development consent is subject to the relevant provisions of the EPA Act and the particular facts of the case to hand and not past decisions. 42 I accept that the DCP informs the contributions plan but the effect of their application is dependant on the circumstances of the particular case not, necessarily, as Mr Jones states at p13 of exhibit3 "...to provide equity in the cost of provision and use of public car parking spaces". While the DCP provides a framework for the determination of the amount of parking required, it is very much dependant on the particular facts. 43 The fact is, as Mr Tillot states, but for cl12.6.1 this development generates a car parking contribution as detailed in condition 2, which reflects the discount given for the availability of nearby car spaces, 79 minus 20 (3 onsite and 17 previously paid) with 16 outstanding. After that assessment the applicant has asked the council to apply cl12.6.1. While the clause has no specific objectives other than to meet the aims of the Code, Mr Tillot believes it was drafted to allow innovative approaches and is deliberately unclear to allow scope for a wide application. 44 I accept that the opening words of the cl12.6.1 invite such a conclusion. It states: " Council encourages innovative approaches to the issues of parking provision where it can be demonstrated that the aims of this Code can be satisfied." 45 The context and objectives of the Code outlined at the commencement of chapter 12 include "to meet the needs of the users". The traffic evidence suggests this development can utilise the existing parking and meet the needs of the users. 46 The clause invites an applicant to demonstrate by relevant data and practical example of comparable situations why the requirements of the code are sufficiently excessive to enable council to vary its application. 47 The applicant relies on the council's determination in the Ware Street development as evidence to support a waiver of the shortfall of car parking spaces because of the availability of existing car spaces. Ware Street was granted an approval in 2007 for a 600-seat reception hall, located in the middle of town with no additional parking spaces provided. It operates from 10am to 4pm 4 days per week and 7.30am 3 days per week. This generates a parking demand of 222 spaces. 35 have been provided or paid for historically, leaving a shortfall of 187 spaces. However, no contribution toward the 224 spaces has been sought. 48 This application of clause 12.6.1 according to Mr Tillot supports a similar application in the case at hand, which like Ware Street has sufficient available parking as it will generate a demand for parking outside those times when peak demand is likely to be expected. 49 I was taken by the words in clause 12.6.1 wherein council invites variations to the requirements of this code "In those instances where the applicant can demonstrate that the use /activity will generate a demand for parking outside those times when peak demand is likely to be expected (for example, restaurant peak times and retailing peak times rarely coincide)." 50 Based on the evidence, I accept the applicant's submission that in accordance with clause 12.6.1 of the DCP the applicant has demonstrated that the requirement for 16 parking spaces is not justified on the facts, those relating to the hours of operation; the availability of parking (supported by two traffic studies) and a consideration of the approach taken by council in its assessment of the comparable Ware Street development. Submissions 51 I have considered the written submissions of the parties. 52 I accept the applicant's submission that the application has been amended from what was consented to in 2008 to reduce its operating hours and confine them to times, which avoid normal peak parking hours. 53 The traffic studies by the council and the applicant demonstrate that there is an underutilisation of council car parks and generally surplus car parking in the vicinity of the development in the evenings. 54 Nothing turns on the fact that the council has resolved to rescind the section 94 plan in the future. 55 The submission that the deletion of condition 2 will set an undesirable precedent is inconsistent with the wording of section 94B(3). The section confines the disallowing and amendment of an unreasonable condition to the particular circumstances of the case. In any event the disallowing or amendment of an unreasonable condition could not be a bad precedent. 56 The extent to which the council has applied the same reasoning over many years in waiving contributions is, I accept, relevant and relevant principally because clause 12.6.1 invites such comparisons. I accept the Ware Street comparison suggested by the applicant. 57 I accept the independent traffic evidence of the experts and the council planners' assessment in the council bundle that there is no justification to continue to require the payment of section 94 contributions for car parking where the availability of public car parking exists to a "significant degree". 58 Even allowing for the removal of the private parking and relying as submitted by the council on the spaces in the public car parking, I am satisfied on the evidence that the parking requirement generated by this development can be accommodated in the existing supply. 59 I reject the estoppel argument raised by the council. The conduct of the parties prior to the commencement of this appeal cannot be raised to estop my consideration of the relevant matters under section 94B(3) of the EPA Act. The chronology of events prior to the lodgement of the appeal is of no relevance in my determination of the reasonableness or otherwise of condition 2. The cases I was referred to on the issue of estoppel are not relevant in the context of this modification appeal under section 94B(3) of the EPA Act. The principles relied upon by the council as raised in the case cited cannot be applied to the facts of this case. 60 The council submits that the court in its discretion ought refuse the application because the applicant chose not to challenge the consent when issued originally. It then took advantage of 2 modification applications and only after the issue of the council's order did it lodge this appeal. The submission is made on the basis of delay. 61 I reject this submission because a challenge to the reasonableness of a condition under s94B (3) has nothing to do with the conduct of the applicant on the facts before me. It is irrelevant that the applicant elected to pursue this appeal some time after the issue of the consent as is the fact that council allowed occupation of the premises before receipt of the section 94 contribution despite the wording of the condition. Conclusion 62 Based on the evidence before me, I find that the applicant has demonstrated that the use will generate a demand for parking outside those times when peak demand is likely to be expected because it is a reception centre which operates in the evenings from 5.00 pm in the evening to 12 midnight. Based on the evidence, I prefer the applicant's interpretation of cl 12.6.1 on the facts of this case and accept that it is appropriate in the circumstances of this case to vary the requirements to the Code. 63 I am satisfied on the evidence before me that the applicant has demonstrated as invited by clause 12.6.1 of the DCP that this development falls within the "Exception to the rules" cl12.6.1; and that it is appropriate to waive the requirement of any for 16 car parking spaces in the particular circumstances of this case. 64 Therefore, it is unreasonable to require a monetary contribution as claimed in condition 2 in the particular circumstances of this case. 65 It is the council's case that the DCP and the section 94 policy are two separate instruments that work independently. It is further submitted that the section 94 policy lists a schedule of outstanding works which have not been completed and it would be unreasonable not to require this applicant to contribute to the section 94 fund because he is generating some need for parking despite the abundance available. This is based on an argument that the nexus for the payment of the section 94 contributions under the policy is more than just a parking demand. However, when pressed, counsel for the council conceded that the words in 9.2 of the Fairfield City Council Developer Contributions Plan at folio 271 of exhibit 1 are clear. The requirement to pay a contribution under the policy is founded on the number of car parking spaces required by the development. (para 9.2.1). There is no other basis for the contribution. 66 The traffic evidence in the Thompson report and the council's ARA report is consistent. After 4pm the number of available spaces increases significantly, with more than 200 spaces left unoccupied from 7pm onwards (folio 243 exhibit 1). Even if I accept the evidence of the planners that one should not count the spaces in the private bowling ally development and subtract 36 spaces and the 90 spaces of the commuter parking for the trains the evidence is that the current levels of parking in the area is sufficient to meet the parking demands of the local land uses including this development. 67 The fact that council has not received any section 94 contributions in respect of this development todate (other than the section 94 contribution in 1978) is not a basis to require this applicant to pay a contribution that might historically have been reasonable but on the current facts is not. 68 I make the following Orders: 1. The appeal is upheld. 2. The applicant's application under section 96(1A) to modify consent 1273 of 2007 lodged with the council on 18 February 2010 is approved by: (a) the deletion of condition 2 (b) amendment of condition 11 to read: 11. Hours of Operation (a) The approved hours of operation for the use of the premises are Monday to Sunday 5.00pm to 12 midnight. (b) All patrons shall leave the premises by 11.00pm and all staff shall leave the premises by 12.00 midnight. ________________ Susan Dixon Commissioner of the Court 22/11/2010 - Typographical - Paragraph(s) Orders - Condition 11 (b) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. 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