Land and Environment Court New South Wales Medium Neutral Citation: Urbanesque Planning Pty Ltd v Ku-ring-gai Council [2019] NSWLEC 1163 Hearing dates: 18 February 2019 Date of orders: 12 April 2019 Decision date: 12 April 2019 Jurisdiction: Class 1 Before: Walsh C Decision: The orders of the Court are: (1) The appeal is dismissed. (2) The exhibits are returned except Exhibit A. Catchwords: Modification of a development application: development contributions, whether granting of consent for works on a constrained residential block could be adjudged likely to increase the demand for public amenities and public services, vacant lots, remnant vegetation, environmental constraints Legislation Cited: Environmental Planning and Assessment Act 1979 Ku-ring-gai Local Environmental Plan 2015 Cases Cited: Broker Pty Ltd v Shoalhaven City Council [2008] NSWCA 311 Newbury District Council v Secretary of State for the Environment [1981] AC 578 Rose Consulting Group v Baulkham Hills Shire Council [2003] NSWCA 266 Texts Cited: Ku-ring-gai Contributions Plan 2010 Category: Principal judgment Parties: Urbanesque Planning Pty Ltd (Applicant) Ku-ring-gai Council (Respondent) Representation: Counsel: J Farrell (Applicant) G Farland (Respondent) Solicitors: Minter Ellison (Applicant) Sparke Helmore (Respondent) File Number(s): 2018/219595 Publication restriction: No Judgment 1. COMMISSIONER: This appeal concerns the decision of Ku-ring-gai Council ('Council') to refuse an application under s 4.55(1A) of the Environmental Planning and Assessment Act 1979 ('EPA Act') to modify development consent DA0250/16 ('consent'). 2. The consent relates to a number of parcels of land within the bounds of The Broadway, Kerala Avenue and Muttama Street, Wahroonga ('site'). 3. The modification application, referenced by Council as 'MOD0238/17', sought removal of a consent condition requiring a development contribution under now s 7.13 of the EPA Act (which was called s 94 of the EPA Act at the time the condition was imposed). Site 1. I rely, generally, on Council's statement of facts and contentions (Ex 1, Tab 1) for the particulars which follow. The site comprises seven lots as follows: Lots 91, 92 and 94 in DP14590 and Lots 109, 110 and 111 in DP14590. The seven lots were created in 1926. The site is also described as: 28 and 30 The Broadway, 3 and 5 Muttama Street and what appears from mapping to be 12, 14 and 16 Kerela Avenue, Wahroonga. 2. The site is currently undeveloped with, according to Council, clumps and corridors of remnant vegetation, including Sydney Turpentine Ironbark Forest Endangered Ecological Community which "has been identified on the north east section of the Site". 3. The site is zoned E4 – Environmental Living under Ku-ring-gai Local Environmental Plan 2015. Background 1. The site is now in private ownership having been in public ownership for a number of years after acquisition for road purposes (Ex 1, Tab 1): "… the lots formed part of the B2 road corridor, were acquired by the NSW Government and remained in State ownership until that road project was cancelled and the Site was sold into private ownership in 2016." 1. It is not contested that the site is significantly constrained. This was identified in the statement of environmental effects accompanying DA 0250/16 (Class 1 Application bundle, Tab 4, p7), which provides as follows: "A number of the subject sites are affected by topographical and environmental constraints. Allotments 93 and 94 are elevated in part above Muttama Street which creates access issues. For this reason a right of carriageway from the Broadway is proposed for access to these sites." 1. In turn, a series of specialist reports were prepared to assist the assessment of the proposal. Council's written submission ('CWS') indicated these to include: flora and fauna assessment, an arborist's report (which identified all of the trees on the parcel), bushfire report, heritage assessment, aboriginal heritage assessment, vegetation management plan and an "Environmental Site Plan" (CWS, p3). 2. The consent (DA0250/16) was issued on 15 August 2017. According to the consent notice the 'proposed development' was: "Proposed driveway, tree removal, building footprints, interallotment drainage and associated easements for 7 lots." Nevertheless, it is apparent from the evidence that 'building footprints' were not approved with this consent. 1. According to the CWS (par 8) two prime development concerns were resolved with this consent: "a. The means of access to the lots, which included approval to remove trees to enable an internal driveway to be built. b. Approval for interallotment drainage, including a "Rip Rap" erosion control section for removal of stormwater." 1. Condition 21 of the consent provided as follows: 1. The modification application refused by Council sought removal of Condition 21 to the consent. Issues 1. The applicant pointed to the fact that the approved development only involved a driveway, stormwater and tree removal, and argued three major reasons as to why the modification application should be approved. These arguments aligned with the provisions of s 7.11 of the EPA Act and are adopted as the heads of consideration for this judgement, as outlined below. Section 7.11(1) of the EPA Act – test of satisfaction 1. Section 7.11(1) of the EPA Act provides as follows: If a consent authority is satisfied that development for which development consent is sought will or is likely to require the provision of or increase the demand for public amenities and public services within the area, the consent authority may grant the development consent subject to a condition requiring: (a) the dedication of land free of cost, or (b) the payment of a monetary contribution, or both. 1. The applicant submits that the Court could not be satisfied that the development would pass the "will or is likely to" test in regard to the demand for the relevant amenities and services under s 7.11(1). Mr Farrell (Counsel for the applicant) argued that a straight reading of the statutory provisions required this interpretation given the approved development only proposes "works", limited to "a driveway, stormwater works and tree removal". According to this argument, upon the completion of these works there will be no increased population and no increased demand for public amenities or services. There are "too many unknowns" at this point, according to Mr Farrell. There is no approval for the construction or occupation of a dwelling and the "anticipation" of residential development is not relevant to the imposition of the condition under s 7.11(1). According to the applicant (Statement of Facts and Contentions in Reply (SFCR), par 8)): "The nature of any future residential development is yet to be determined. It is therefore premature to impose development contributions for public amenities and public services under the Consent." 1. Council relied on Broker Pty Ltd v Shoalhaven City Council [2008] NSWCA 311 ('Broker') here and generally in its defence of the condition. Mr Farland (Counsel for the respondent Council) argued that, in alignment with the findings of Broker [50]-[52], what is now s 7.11(1) of the EPA Act requires a consent authority, when faced with the DA, to engage itself in a "predictive inquiry" as to whether there are requirements for the provision of, or increase in demand for, public amenities and public services within the area, which come about as a consequence of the foreshadowed development. He submits (CWS, p8): "… the task is not to identify inevitable consequences of the development. Rather, Council need only consider the practical consequences that are likely to flow from the development." (emphasis added) 1. In support of the argument in regard to "likelihood", apart from direct reference to the terminology in s 7.11(1), Mr Farland referred to the joint report prepared by the planning experts (Mr D Brindle for Council and Mr E Sarich for the applicant), and tendered as Ex 2. "The works that were subject to the consent to development application 0250/16 would, when acted upon, result in the construction of dwelling houses on each lot (subject to separate development consents)." 1. While he did not agree that there is a requirement for a contribution in the full circumstances of the case, in his oral evidence under questioning from Mr Farland, Mr Sarich confirmed that dwellings would appear on each of the seven lots following completion of the works. 2. This conclusion of the planners is suggested by Mr Farland to support the proposition that it is reasonable to hold a view that the approved works are likely to "increase the demand for public amenities and public services within the area". Consideration 1. Mr Farrell argued, in part, that while it was "conventional" for s 7.13 contributions to be applied at subdivision stage, it was not at all conventional for such contributions to be applied to works of these kinds. Para [50] from Broker is reproduced below. "50. If an application for subdivision of land is made to a council, and the council is satisfied that that subdivision "will or is likely to require the provision of or increase the demand for public amenities and public services within the area", the council's power to grant the development consent subject to a condition for payment of money under section 94 is triggered. In making the judgment whether the subdivision "will or is likely to require the provision of or increase the demand for public amenities and public services within the area", the council is not restricted to considering only those consequences which must inevitably flow from, or are legal consequences of the granting of, the subdivision approval. As well, the council can consider the practical consequences that are likely to follow from the granting of the consent. If the council is satisfied that a subdivision consent, once granted, is likely to be acted upon, and to instigate a process whereby people come to occupy the separate lots that arise from the subdivision, the council might, in the circumstances of the particular case, be satisfied that the subdivision will, or is likely, to require the provision of or increase the demand for public amenities and public services within the area." 1. There is considerable reference to "subdivision", as can be seen above, but not works of this kind, in Broker. However, this is not material, as it is clear that the triggering of the operation of the provision need not be constrained by the particular form of development for which consent is given. Just because a consent is, as in this case, for "works"; which (I would agree) is an "unconventional" development-type for the application of s 7.13 contributions, this does not mean it is wrong to do so of itself. As also put in Broker at [58]: "...This is just an example of the phenomenon, well recognised in law, that the one outcome can be the consequence of several different causes." 1. In my opinion two factors combine to bring me to a conclusion that the development "is likely to … increase the demand for public amenities and services within the area". First it seems to me reasonable to conclude that the development consent provides for a resolution of what have been a series of somewhat intricate environmental planning issues. This is evident from the series of studies which were undertaken by the applicant in the course of securing consent [9]. The resolution of these issues manifests in the approval of access and drainage and the associated requirements in regard to to tree removal and clearing on this well-vegetated site. 2. The above conclusion can be combined with a second factor, which is the evidence from the planning experts that the consent, when acted upon, would "result" in the construction of dwelling houses on each of the seven lots (see [18]). It seems to me a reasonable deduction from this commentary in the joint expert planners' report that, while there are no approvals for dwelling houses or even building footprints with this consent, the planners believe that with the passage of the development application and Council's consent to it, there is no longer any substantive or unresolvable impediment to construction and occupation of dwellings. 3. The inference I draw from the above is that up until the consent was issued it was not clear as to the development potential of the land, and thus any "predictive inquiry" would fall short in regard to the question of need for provision of amenities and services. But this consent has "practical consequences" (Broker at (50)). It brings about the "likelihood" of seven new dwelling houses and, it follows, an increase in the "demand for public amenities and public services within the area" as a consequence. I agree with Mr Farland that the development consent has "unlocked" the development potential of the site; and thus the requirement for the amenities and services comes about as a consequence of, or is "caused by", the development (see Broker [51]). 4. In terms of Broker [50], I am satisfied that this consent "is likely to be acted upon" and will instigate a process whereby people come to occupy seven dwelling houses on the site on the seven individual lots, and thus create the demand for amenities and services. Section 7.13(1) of the EPA Act - whether condition allowed by and determined in accordance with contributions plan 1. Section 7.13(1) of the EPA Act provides as follows: A consent authority may impose a condition under section 7.11 …only if it is of a kind allowed by, and is determined in accordance with, a contributions plan (subject to any direction of the Minister under this Division). 1. The applicant submits that the contribution required of the applicant under Condition 20 is: (1) not allowed by, and (2) has not been determined in accordance with, Ku-ring-gai Contributions Plan 2010 ('CP'). 2. In my interpretation, the principal argument of the applicant was that under cl 1.4 of the CP, which describes which development the CP applies to, there was no calling up of the subject development ("works"), or "development at large". Rather, and relevantly to the applicant's argument, cl 1.4 of the CP specified "subdivision" and "residential development". The argument was that mindful of the first precondition of s 7.13(1), the contribution was not "allowed by" the CP. 3. The Council's response to this argument was that the opening paragraph of cl 1.4 was primary. This paragraph referred back to the principle of linking contributions to the type of development that increases the demand for facilities and services. The second paragraph then simply itemises development (such as subdivision and residential development) that "may" increase that demand. 4. The applicant also argued non-compliance with the second precondition of s 7.13(1) ("determined in accordance with" the CP). One argument here was in relation to the various provisions in the CP which reference a requirement for contributions to be based on (words to the effect of) an increased contributing population. The applicant's argument was that the development does not "increase the contributing population". Therefore, contributions for these approved works, only, would not be "in accordance with" such provisions. I will not refer to this argument further as I have addressed the point above (see [21]-[26]). 5. I did not consider there was adequate expert evidence to make the case that there was error in regard to the particular metrics applied in coming to the contributions attributed to the DA (as a further factor in regard to the question of whether the contribution was "determined in accordance with" the CP). I believe there is nothing to suggest anything less than a three bedroom dwelling would be constructed on each lot and also note the agreement from the parties that a maximum contribution of $20,000 per dwelling would apply, subject to any conditions, in accordance with a ministerial direction under then s 94E of the EPA Act. 6. The applicant also raised the consideration of "credits" (under s 1.17 of the CP) and "exemptions" (under s 1.25 of the CP). These matters are discretionary and are best considered as matters of "reasonableness" under s 7.13(3) of the EPA Act (considered below). Consideration 1. Clause 1.4 of the CP is reproduced below. "1.4 Development to which this Contributions Plan applies This Contributions Plan applies to all development that increases the demand for the facilities and amenities for which this Contributions Plan provides. For the purposes of this Contributions Plan, development may include subdivision, all forms of residential development including single dwelling houses, dual occupancies, villas and townhouses and multi-unit development including seniors living dwellings and non-private dwellings, increased commercial floorspace in the form of floorspace for business purposes, office, retail, industrial or other for-profit use and increased intensity of usage or employment in any such premises, or any combination of these." 1. In my opinion, an argument which shines a light on the second paragraph of cl 1.4 is incomplete without giving due regard to the first paragraph. A plain reading of the clause would support the argument put by Council. That is to say, use of the verb "may" in the verb-phrase "may include" merely indicates the possibility of "subdivision" and "all forms of residential development" (and the like) triggering the primary condition applying to development which is expressed in the first paragraph ("all development that increases demand …"). 2. To be of the kind "allowed by" the CP, a development still needs to actually "increase demand …", but I have indicated above ([21]-[26]) that this development satisfies that test. Section 7.13(3) of the EPA Act - whether condition "unreasonable" 1. Section 7.13(3) of the EPA Act provides as follows: A condition under section 7.11 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. 1. The applicant submitted that the Court should disallow the condition because it is unreasonable in the particular circumstances of this case. It was submitted that the test to be applied here was not "Wednesbury unreasonableness" (unreasonable to the extent that no reasonable authority could ever support the condition), but merely the ordinary meaning of the term. Reference was made to Rose Consulting Group v Baulkham Hills Shire Council [2003] NSWCA 266 [49], which makes this direct finding. 2. There were four (further – ie in addition to the matters above) parts to the applicant's argument why I should disallow the condition under s 7.13(3) of the EPA Act: 1. There was no reasonable foreseeability of the condition. 2. The contribution (of around $140,000) was out of scale with the capital investment value of the works (of around $20,000). 3. Credit(s) should be available for vacant existing lots. 4. Under the "merit exemptions" provisions at cl 1.26 of the CP. 1. As I understand it, the first argument here is that there was inadequate or no prior advice that the contribution would be applied as a condition of the consent (Mr Farrell has already argued that in his view a plain reading of cl 1.4 would not allow such a condition – a point I disagree with). It is clear that there were numerous points of contact between the applicant's representatives and Council in the lead-up to the approval. While it might be good practice if there were forewarning of the intended contribution in such discussions, lack of it does not exempt a council or another consent authority from imposing conditions which are warranted in the circumstances of a case. 2. In regard to the second argument, it seems to me inappropriate to suggest some scaling relationship between the capital investment value of a development proposal and attributable contributions. The trigger is whether the subject development relevantly unlocks constraints on future occupation. This development application, although only some $20,000 in capital works, brought about (through considerable expert input and liaison among the parties) a lifting of the applicable constraints on the land. There was evidence of the consequences of this in the hearing. That is, in terms of the moving along the track to residential occupation (and the scale of commercial investment which goes with that), with agreement on the fact that a number of development applications for dwellings were now lodged with Council on the subject site. 3. The third argument is in regard to credits. While the provisions of s 7.13(3) of the EPA Act do not require me to pay heed to the CP, it is reasonable for me to consider its provisions in regard to this question. The CP suggests the test is to determine "the net increase in demand arising from the development" (Ex 1, folio 280-281). The CP has little regard for the notion of "regularity" as argued by Mr Sarich. It provides as follows (ibid): "In the case of vacant premises: • in the case of recently vacated residential premises, a credit will be given for the population that has vacated the site for the purposes of redevelopment and/or as a result of changing economic trends since the most recent census on which the Contributions Plan is based. For the purposes of this plan, that means the 2006 Census; or ... … Except as provided for above, no credit will be granted for a vacant residential allotment unless documentary evidence of past payment of a development contribution can be substantiated. ..." I will draw conclusions in regard to this, together with the fourth argument, below. 1. While I consider it here, under s 7.13(3) of the EPA Act, the fourth argument does link to provisions of the CP cl 1.26 (Ex 1, folio 292); albeit looking for a more generous interpretation than might be available there. The targeted provision ("the fourth bullet point") is reproduced below in context: "Council may formally consider, on the individual merits, a case for exempting the following types of development from the levying of contributions: … • Development where it can be demonstrated to the satisfaction of Council that in any particular category of contribution that the development, by the particular nature of its use, in the unique circumstances of the case, does not generate a demand for, or derive benefit from, some or any of the types of facilities and amenities to be provided. Note: Given that the grant of any such exemption, full or partial, may be considered to create a precedent or confer a pecuniary advantage on one developer over others, such an exemption is not likely to be granted unless there are absolute meritorious circumstances that would distinguish the case of the subject development from any other. All such arguments will be put before Council for formal determination and the full text of any such submission will be publicly available on Council's website for public scrutiny." 1. It is part of the applicant's case that it was unable to make a submission to Council in regard to such an exemption as it was not able to be predicted that a condition requiring a contribution might be applied. Consideration 1. I am not persuaded to disallow the condition. While I acknowledge that the circumstances are "unconventional" that does not take away from my finding that this development, itself, "unlocks" the land for residential development. The development is thus reasonably considered as likely to increase the demand for public amenities and public services within the area. Local councils are involved in a significant endeavour in this provisioning to meet the associated increased demand, with Ku-ring-gai's area-wide plan working at a substantial scale. The provisions of the CP which allow for credits or exemptions are clearly not triggered in the circumstances and I see no reason to conclude other than the condition "fairly and reasonably relates to the development", mindful of the third arm of the Newbury test (Newbury District Council v Secretary of State for the Environment [1981] AC 578). Conclusion 1. In my opinion the subject development awakens land which has been hitherto dormant in terms of residential occupation potential. The development is likely to trigger seven new residential occupations and an increased demand for public amenities and public services within the area, as a consequence. I see no reason why the development should be excused from paying its share of contributions towards a planned response to this demand as evidenced in the CP. Orders 1. The orders of the Court are: 1. The appeal is dismissed. 2. The exhibits are returned except Exhibit A. ………………………. Peter Walsh Commissioner of the Court ********** 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. Decision last updated: 12 April 2019