Land and Environment Court of New South Wales CITATION : Tetbury Pty Limited v Ku-ring-gai Council [2007] NSWLEC 771 APPLICANT: Tetbury Pty Limited PARTIES : RESPONDENT: Ku-ring-gai Council FILE NUMBER(S) : 10392 of 2007 CORAM: Lloyd J KEY ISSUES: Development Consent :- monetary contribution under s 94 of the Environmental Planning and Assessment Act 1979 - provision, extension or augmentation of community and recreation facilities - open space embellishment and acquisition - administration - appropriate contribution rate for the incoming population - apportionment - reasonableness LEGISLATION CITED: Environmental Planning and Assessment Act 1979 s 94, s 94B Environmental Planning and Assessment Regulation 2000 cl 27 DATES OF HEARING: 05/09/2007; 06/09/2007; 10/09/2007 and 11/09/2007 DATE OF JUDGMENT: 28 November 2007 APPLICANT: P C Tomasetti SOLICITORS: Phontos Legal LEGAL REPRESENTATIVES: RESPONDENT: M G Craig QC - 05/09/2007 and 06/09/2007 P J McEwen SC - 10/09/2007 and 11/09/2007 SOLICITORS: DLA Philips Fox JUDGMENT: - 1 - IN THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Lloyd J Wednesday, 28 November 2007 LEC No. 10392 of 2007 TETBURY PTY LIMITED v KU-RING-GAI COUNCIL [2007] NSWLEC 771 JUDGMENT Background 1 HIS HONOUR: On 5 July 2006, the respondent, Ku-ring-gai Council, granted development consent to demolish three dwelling houses and to construct two residential flat buildings comprising 35 apartments at Nos. 29-33 Dumaresq Street, Gordon. The consent was granted subject to a large number of conditions, including condition 99 which required a monetary contribution of $752,413.35 in accordance with the council's s 94 contributions plan. 2 On 26 February 2007, the council approved an application to modify the consent under s 96 of the Environmental Planning and Assessment Act 1979 ("the EP&A Act"). The modification was for a variation in the apartment layout. The modified consent also resulted in a modification of condition 99 so as to require a contribution of $708,426.55. 3 A further application for modification of the consent was made in February 2007, which sought modification of condition 99 to a reduced sum of $17,976.38. On 4 May 2007, the applicant appealed to the Court against the neglect and delay of the council to determine the application. The council formally refused the application on 1 June 2007. 4 Section 94 of the EP&A Act enables a consent authority to grant a development consent subject to a condition requiring the dedication of land free of cost, or the payment of a monetary contribution, or both, if it is satisfied that the development for which 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. 5 There are, however, two requirements that must be satisfied before a council can impose any such condition. The condition may be imposed only if it is of a kind allowed by and is determined in accordance with a contributions plan (s 94B(1)) and it may be imposed only to require a reasonable contribution towards the public amenities and public services concerned (s 94(2)). Moreover, a condition under s 94 that is of a kind allowed by a contributions plan may be disallowed or amended by the Court because it is unreasonable in the particular circumstances of the case, even if it was determined in accordance with the relevant contributions plan (s 94B(3)). 6 In the present case the condition is of a kind allowed by and determined in accordance with a contributions plan. The question for determination is the reasonableness of the contribution sought by the condition 99. Expert evidence has been adduced on the question by Mr D Brindle for the council and by Mr C J Young and Mr G Paroissien for the applicant. In addition to their separate reports there is a joint report by Mr Brindle and Mr Young and a joint report by Mr Brindle and Mr Paroissien. Mr Paroissien's evidence is limited to open space acquisition and open space embellishment. 7 The parties are in dispute over a number of discrete elements of the contribution. It is convenient to consider each element separately. Occupancy rate 8 Mr Brindle and Mr Young agree that it is preferable in this case to determine the dwelling occupancy rate by reference to the number of bedrooms rather than the size of the apartments. Mr Brindle goes further, however, and says that rooms designated on the approved plans as studies should be counted as bedrooms as they could be readily adapted for such use. Mr Young says that the council does not count studies as bedrooms for its calculation of car parking, and they are genuine studies having generally no external windows but rather opening into public entry areas with highlight windows. 9 In my view the opinion of Mr Young is to be preferred. An examination of the plans confirms Mr Young's assessment – the rooms shown on the approved plans as studies do not readily lend themselves to use as bedrooms. Moreover, since they are designated on the approved plans as studies, any use of them for the purpose of bedrooms would be unlawful. 10 Adopting Mr Young's approach by not counting the studies as bedrooms, I find that the occupancy rate for the development is 66.18 persons, less a credit for the three dwellings to be demolished, resulting in a net increase of 57.86 persons. Child care services 11 The council's condition was originally based on a contribution of $705.69 per person, but during the hearing this was reduced to $25.00 per person in view of the provision of child care places by the private sector since the commencement of the contributions plan. The council presently provides and manages about 5.3 per cent of the total long day care places within its area and its policy is to continue to provide child care services, including an additional child care centre as a community benefit. As I understand it, fees are charged for child care places, so that the council is seeking a contribution towards the capital costs of providing a child care centre. 12 The applicant says that no site for such child care centre is identified in the contributions plan, although it acknowledges that a site is now identified in the council's draft contributions plan which it placed on exhibition. A similar criticism is made about other elements of the contributions plan – the absence of any identified site for the particular public amenity for which the contribution is sought. The applicant submits that this is contrary to cl 27(1)(h) of the Environmental Planning and Assessment Regulation 2000 ("the Regulation"), which requires a contributions plan to identify 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. 13 In my view, however, this criticism is not justified. The regulation does not require that particular sites be accurately identified, but only the general location where the facility is to be located together with its estimated cost. The contributions plan does this. 14 The applicant further submits that there is no demonstrated need for a child care facility. It says that private providers, existing and approved, are fully able to meet the demand for child care places. 15 I accept the council's submission that the provision of child care facilities is a public amenity or public service for which it can levy a contribution under s 94 of the EP&A Act. Although there may at present be no shortfall in the provision for child care places within the council's area, it is reasonable for the council to require a contribution towards the capital cost of an additional child care centre for the incoming population identified in the contributions plan. As I understand the position, the applicant does not dispute the quantum - $25.00 per person – it only disputes the principle that it should make a payment at all in view of the fact that the demand is being met by private providers. In my opinion both the contribution and the quantum of $25.00 per person is reasonable. Youth facilities 16 The council seeks a contribution of $28.01 per person. The contributions plan identifies a need for youth facilities and the contribution is to be used to upgrade and embellish the council's existing youth facilities, such as the purchase of new furniture and equipment at the existing Gordon and St Ives centres and the purchase of a mobile youth centre. According to Mr Brindle, the contributions sought under the contributions plan are required so that the council's youth facilities "work harder" to cater for the projected increase in population. 17 Mr Young, however, states that the youth population in the age group between 15-24 years has been declining in Ku-ring-gai, according to the 2007 and 2006 census figures. The decline has been a reduction of 412 persons in that age group. Accordingly, the need has not been demonstrated. Moreover, Mr Young states that the proposed facilities listed in the contributions plan are maintenance related, which will be of equal use to the existing population. The applicant's position is that there should be no contribution for youth facilities. 18 The answer to Mr Young's assessment is that, notwithstanding the decline in the relevant age group between 2007 and 2006, there has been large scale rezoning of land in Ku-ring-gai for medium density development such as that which is proposed here and which will in turn lead to the increase in population which is projected in the contributions plan. The increase in the projected incoming population will self-evidently lead to an increase in the relevant age group, which in turn will impose an extra demand upon the existing youth facilities and, as stated by Mr Brindle, will require those facilities to "work harder". 19 The applicant further submits that, in any event, the projected incoming population should not have to bear 100 per cent of the costs, but only 4.4 per cent of the cost being the appropriate apportionment between the new population and the existing population. I do not agree. The need for the existing facilities to work harder arises solely as a consequence of the need to cater for the additional population. The estimated costs have been properly identified in the contributions plan and in my opinion the contribution sought in this case of $28.89 per person is reasonable. Community facilities and multipurpose community cultural centre 20 There is a number of elements which come under this heading identified in the contributions plan: Stage 1 comprising feasibility and design; Stage 2 comprising new library and fit-out; Stage 3 comprising a meeting and conference centre; Stage 4 comprising an auditorium; and Stage 5 comprising an exhibition centre. The community facilities also include the provision of library bookstock and computers. 21 The parties agree upon the appropriate contribution for Stage 1 – 52 cents per person. The remaining items, Stages 2 to 5 and the provision of library bookstock and computers are in dispute. It is appropriate to consider each item separately. Stage 2 – library floor space 22 Both Mr Brindle and Mr Young agree that the contributions plan identified the need for additional library floor space of 550 square metres to meet the needs of the projected population growth to 2026. This is fully apportioned to the new population. The contributions plan states that the Gordon library is over-utilised and that the Lindfield, Turramurra and St Ives libraries all need extending. 23 As I understand the evidence, the need for an additional 550 square metres of floor space is to maintain the existing pro-rata rate of floor space to the larger population. Although the existing libraries at Lindfield, Turramurra and St Ives need extending, the council is only seeking contribution under the contributions plan for 550 square metres of floor space. The provision of 550 square metres has been costed at $462,071.00. When this sum is divided by the projected population increase during the life of the current contributions plan (an increase of 4,998 persons), the resulting contribution sought is $92.45 per person. In my view this is reasonable. 24 The applicant submits, however, that there should be no contribution for this item. Firstly, it says that the contribution depends upon whether the estimated population increase will occur, which is unlikely according to the 2006 census information. Secondly, it says that there is a proposal for a new library in Lindfield which will be provided by a developer as part of a proposed development on the eastern side of the railway line. I have noted, however, the present rezoning of land along the railway corridor for medium density development, of which the present development is an example and which may yet generate the projected increase in population. Moreover, the existing library at Lindfield is already inadequate so that the proposed new library would overcome this inadequacy. Finally, there is no certainty that the Lindfield proposal will proceed. In my opinion the contribution sought in accordance with the contributions plan in this instance is reasonable. Stages 3-5 of multipurpose community centre 25 As noted above, this is for a proposed meeting and conference centre, an auditorium and an exhibition centre. The contributions plan explains the basis of apportionment as follows: The cost of stages 3-5, comprising community and cultural floor space, has been apportioned by applying the current per capita provision of council provided floorspace to the future population. Based on the current provision, the additional population 2004-2009 would require approximately 965 square metres of additional community and cultural floorspace. 26 The contributions plan apportions a construction cost of $672,226 to the floor space required by the new population and when this sum is divided by the projected increase in population of 4,998 persons, the resulting contribution is $134.50 per person. 27 In my opinion the methodology adopted by the contributions plan and the resultant contribution is reasonable. 28 The applicant submits, however, that the proposed facility does not exist at present, that it would be constructed to satisfy an existing need and that the existing population would also derive a benefit from the facility, so that the contribution should be apportioned between the existing and the new population. I am unable to agree - the contributions plan clearly demonstrates that the contribution which is sought is not for the whole of the cost of the project but is limited to only that proportion of the cost which is referable to the floor space required by the additional population. 29 The applicant further submits that the cost of the project should be offset by monies raised from the sale of a council-owned property in Suakin Street, Pymble, which the council had purchased in the 1990s. As I understand the evidence, however, that land is not being sold but is to be used as a new council depot. In these circumstances there is no money to offset the cost of the proposed centre. I conclude, therefore, that the contribution sought by the council of $134.50 per person is reasonable. Library bookstock and computers 30 The contributions plan shows that the additional population will require the provision of additional bookstock and library computers (which are leased by the council) and which represents a contribution of $55.79 per person for library bookstock and $3.33 per person for library computers. Mr Young agreed with Mr Brindle that the new population should pay 100 per cent of the additional bookstock and computer leasing charges, but states that the amount sought is too high in comparison with the previous contributions plan and is thus unreasonable. I am unable to agree. The amount sought by the contribution is calculated in accordance with the contributions plan and is self-evidently reasonable. Indeed, it seems to me that the amount sought, having some knowledge of the cost of books, appears to be modest. The combined component of $59.12 per person is reasonable. Administration 31 The contribution plan calls for a contribution for the employment of a person designated as a full-time s 94 officer, the cost to be wholly met by contributions made under s 94. The contributions plan states that a full-time s 94 officer is not currently employed. According to Mr Brindle, council's staffs are being diverted from their other duties to administer the contributions plan. The cost of employing such a person for the life of the plan has been estimated and, when apportioned to the increasing population, results in a figure of $100.00 per person. 32 Mr Brindle states that this provision is reasonable and in the absence of such a person, time and expense is required of other staff or consultants. Mr Young states that, although the current contributions plan has been in place for some three years no officer has been employed. Mr Young states that, if allowable, the cost should be reduced to reflect the fact that no such officer has been employed for the first three years of the five-year duration of the plan. 33 I am inclined to the view that the contribution as sought is reasonable. Although such an officer has not yet been employed, other staffs have been diverted from their normal duties to administer the plan and the cost should be borne by the additional population in accordance with the contributions plan. The amount sought, namely $100.04 per person is calculated in accordance with the contributions plan and is reasonable. Open space acquisition 34 Both Mr Brindle and Mr Paroissien, who gave evidence on this issue for the applicant, agree that the contributions plan adequately identifies a need for the acquisition of open space to meet the needs of the future population. Mr Paroissien, however, believes that the contributions plan fails to meet the requirements of cl 27 of the Regulation, to which I have referred in par [12] above, in that it fails to nominate the specific sites to be acquired. As I have previously noted, however, cl 27 does not require the identification of specific sites for acquisition, but rather the general area in which the land is to be acquired. The contributions plan does this and apportions a cost of acquisition based upon the average cost of land per square metre in Ku-ring-gai. 35 I understand Mr Paroissien to acknowledge the need identified in the contributions plan for Gordon. There is evidence that the specific need in Gordon has been partly met by the council's recent agreement to purchase three parcels of land in Dumaresq Street for open space. That purchase, however, is of land which is adjacent to the council's chambers and would serve the needs of the Gordon town centre and visitors to that centre, although I accept that persons occupying the subject development would also use it. That is, the recent purchase would seem to serve a wider purpose than the needs of residents of Gordon. 36 Mr Paroissien also says that as at March 2007 the council has collected about $12.5 million for open space acquisition, none of which had been spent. However, if as seems likely the council's purchase of the Dumaresq Street properties proceeds then the council will have spent $7 million on that purchase alone. 37 In my view there is nothing to suggest that the requirements of the contributions plan for the acquisition of open space are unreasonable. In other words the contribution as sought is reasonable and comprises $7,379.76 per person for acquisition costs, $101.39 for acquisition planning costs, $347.05 per person for embellishment of the acquired land in the southern area and $395.17 per person for embellishment of the acquired land in the wider local government area - a total contribution of $8,223.37 per person, calculated in accordance with the contributions plan. 38 It is also reasonable that the incoming population, which generates the need, should pay 100 per cent of these costs, since without the increase in population the need would not arise. Embellishment of the existing open space and sportsgrounds 39 The contributions plan identifies a number of specified parks and sportsgrounds, identifies the kind of embellishment to be carried out at each such park and sportsground and attributes a cost of carrying out of those works to each of them. The total cost of these works is then attributed to the new population, resulting in a contributions rate of $1,318.32 per person. 40 The contributions plan describes the need in the following terms, inter alia: … As well, a large number of parks require further embellishment to more effectively meet the recreational needs of expectations of existing and future recreational users. Council's local and district parks are not (in terms of both quantity and suitability) fully meeting the recreation need of existing populations and do not have the capacity, therefore, to absorb the recreation needs and demands of new populations. 41 Under the heading "Needs of New Population", the contributions plan notes that between 2004 and 2009 the increase is estimated to be nearly 5,000 potential users. After referring to the supporting study for the council's previous s 94 contributions plan and to more recent studies, there is the following statement: These studies found that, in terms of quantity or quality or both, the currently available facilities are insufficient for existing populations – and will certainly not meet the additional needs generated by new development. 42 The contributions plan states that it is proposed to undertake stage 2 of two sports field embellishment projects in the current s 94 contributions plan and to upgrade a cross-section of other sports reserves - "to make them work harder". The contributions plan goes on to state: These upgrading projects are required to expand facility capacities to meet the needs of the new populations. The existing facilities are only sufficient to meet the needs of existing populations. The key requirements include sports turf improvements, irrigation, drainage, amenities, spectator facilities, parking and/or floodlighting. The costs of these embellishments have therefore been 100% apportioned to new development. 43 The applicant points to the statements described in pars [42] above and a further statement in the contributions plan - that "where works will meet the needs of both existing and new residents, the cost of the facility will be apportioned between the new" – to say that the incoming population should not have bear 100 per cent of the costs of these embellishments. The applicant refers by way of comparison to the contribution sought for the upgrading of the West Pymble Park, for which the incoming population is only required to pay its share of the total demand upon that facility. 44 It seems to me, however, that a fair reading of the contributions plan is that it identifies an insufficient standard of parks and sportsgrounds generally, but the specific projects specified for upgrading in the contributions plan are those which have been identified to meet the needs of the incoming population. This much appears from the statements which I have quoted in par [42] above. That is, the particular projects, for which the incoming population is to meet the full cost, are only those projects which fall within this category. As Mr Brindle explained in his evidence, the works identified in the contributions plan are these that have been identified to meet the needs of the future population; the future population will lead to more intensive use of those parks and sports fields, which in turn means that those facilities will have to "work harder". I am thus satisfied that the contribution sought by the council in accordance with the contributions plan is reasonable. Conclusion 45 The parties agreed upon the appropriate contribution rate for a number of other component of the contributions plan, namely the seniors and information services component of the community facilities, public art, art centre, West Pymble Pool, traffic and transport. The overall conclusion results in a reduction of the contribution sought by Condition 99 from $752,413.35 to $584,828.62, made up as follows: Community facilities Child Care $25.00 (per person) Youth Centre $28.01 Mobile Youth $0.88 Seniors $20.01 Information Services $13.00 Multicultural centre Stage 1 $0.52 Stage 2 $92.45 Stages 3-5 $134.50 Library bookstock $55.74 Library computers $3.33 Open Space Acquisition Acquisition $7,379.76 Acquisition planning costs $101.39 Open Space Embellishment Southern Area $347.05 Local Government Area $395.17 Sportsgrounds $1,318.00 West Pymble Pool $27.28 Traffic and Transport $65.52 Section 94 Plan Administration $100.04 Population increase 57.86 Total contribution (57.86 x 10,107.65) $584,828.62 46 The formal order of the Court is therefore as follows: (1) The appeal is allowed. (2) Condition 99 is amended as follows: 99 A contribution is to be paid for the provision, extension or augmentation of community facilities, recreation facilities, open space and administration that will, or likely to be, required as a consequence of development in the area. TOTAL CONTRIBUTION FOR THIS DEVELOPMENT OF 39 ADDITIONAL DWELLINGS IS CURRENTLY $584,828.62. The amount of the payment shall be in accordance with the section 94 charges as at the date of payment. The charges may vary at the time of payment in accordance with Council's Section 94 Contribution Plan to reflect changes in land values, construction costs and the consumer price index. This contribution shall be paid to Council prior to the release of the construction certificate and the amount payable shall be in accordance with the Council's adopted Section 94 Contributions Plan for Residential Development, effective from 30 June 2004, calculated for each additional person as follows: Community facilities $373.44 Open Space Acquisition and Embellishment $8,223.37 Sportsgrounds $1,318.00 Aquatic/Leisure centres $27.28 Traffic and Transport $65.52 Section 94 Plan Administration $100.04 $10,107.65 To obtain the total contribution figure the following table of occupancy rates is to be used: OCCUPANCY RATES FOR DIFFERENCE DWELLING SIZES One bedroom dwelling 1.20 (persons) Two bedroom dwelling 1.64 Three bedroom dwelling 2.06 Four bedroom dwelling 2.60 Five or more 2.80 The number of persons in the development is taken to be 57.86 persons. (3) The exhibits may be returned. I hereby certify that the preceding 46 paragraphs are a true copy of the reasons for judgment herein of the Honourable Mr Justice D H Lloyd. Associate Dated: 28 November 2007 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. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.