Clarence City Council v Dourias MGH Pty Ltd
[2024] TASSC 80
•19 December 2024
[2024] TASSC 80
| COURT: | SUPREME COURT OF TASMANIA |
| CITATION: | Clarence City Council v Dourias MGH Pty Ltd [2024] TASSC 80 |
| PARTIES: | CLARENCE CITY COUNCIL |
| v | |
| DOURIAS MGH PTY LTD (ACN 609 879 987) | |
| FILE NO: | 3080/2022 |
| DELIVERED ON: | 19 December 2024 |
| DELIVERED AT: | Hobart |
| HEARING DATE: | 2 December 2024 |
| JUDGMENT OF: | Marshall AJ |
| CATCHWORDS: |
Environment and Planning – Planning – Development assessment and control – Applications – Subdivision applications – Other particular requirements and matters – Dispute regarding security for payment instead of council requiring increase of area for public open space – Amount of compensation to be calculated depends on existence of a final plan – Not final plan until all legal requirements met – Correct date for valuation of land is date on which sealed plan was sent to Recorder of Titles.
Aust Dig Environment and Planning [1126]
Legislation:
Local Government (Building and Miscellaneous Provision) Act 1993, ss 177(1), 117(2), 117(3), 117(5),
88(1)(a), 88(1)(c)(b), 89(1), 94,
Cases:
West Tamar Council v Tasmanian Planning Commission [2013] TASSC 16
Leary v Clarence City Council [2013] TASRMPAT 068
REPRESENTATION:
Counsel:
Applicant: P Jackson SC, P Lunn Respondent: G Rafferty
Solicitors:
Appellant: Simmons Wolfhagen Respondent: Leonard Fernandez Barristers and Solicitors
| Judgment Number: | [2024] TASSC 80 |
| Number of paragraphs: | 29 |
Serial No 80/2024 File No 3080/2022
CLARENCE CITY COUNCIL v DOURIAS MGH PTY LTD (ACN 609 879 987)
| REASONS FOR JUDGMENT | MARSHALL AJ 19 December 2024 |
1 The applicant, Clarence City Council, has applied to the Court to have determined a dispute between it and the respondent, Dourias MGH Pty Ltd, regarding the amount that is payable by the respondent to the applicant pursuant to s 117(2) of the Local Government (Building and Miscellaneous Provision) Act 1993 ("the Act").
Legislative Context and agreed matters
2 Section 117 of the Act is entitled "payment instead of increasing public open space". Section
117(1) provides that:
"instead of requiring an owner to increase the area for public open space, the Council, before approving a plan of subdivision may require security for the provision of an amount calculated under subsection 2."
3 Section 117(2) provides that:
"The amount required to be paid is an amount not exceeding an amount which bears the same ratio to the value of the whole area comprised in the plan as one-twentieth of that area less any area provided for public open space in the final plan and any area created by the final plan of the littoral or riparian reserve bears to that whole area."
4 Under s 117(3) of the Act:
"If the owner and the council do not agree on the amount to be secured, it is to be determined as a disputed claim for compensation under the Land Acquisition Act 1993" ("the LA Act").
5 The amount paid is held on trust by the Council "for the acquisition or improvement of land for public open space for the benefit of the inhabitants of the municipal area"; see s 117(5) of the Act.
6 In this matter s 117(1) of the Act has no work to do because the applicant did not require security for an amount calculated under s 117(2) before it approved a plan of subdivision submitted by the respondent, a property developer company. A plan of subdivision had already been approved by Council, regarding the relevant land, sealed under Part 3 of the Act and had taken affect as provided by s 89 of the Act subject to s 94.
7 The parties also agreed that there is authority for the proposition that the market value of "the whole area comprised in the Plan" is to be determined as at the date when the "final plan" was lodged with the applicant.
8 The "whole area" comprised in the Plan for current purposes is the whole of lots 1 to 8, 26 Mannata Street, Lauderdale in the plan of survey included in the final plan and in the plan of survey included in the sealed plan.
9 The parties also agreed that the market value is to be determined according to one or other of the methods adopted by the two valuers called by the parties to provide expert reports. The applicant relied on a valuation provided by Mr Andy Bevin. The respondent relied on a valuation provided by
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Mr Matthew Page. Both men are expert valuers. Mr Bevin's valuation relied on a method known as "the comparable sales method". His report defines "market comparison" as "a method of valuation whereby the evidence derived from the analysis of sales or leasing of similar assets is used to assess value."
10 Mr Page's valuation adopted what might be called a "direct comparison" approach checked by hypothetical development value.
Matters in dispute
11 The parties are in dispute about the date which is to be considered as the date when the final plan was lodged with the applicant so as to fix the date for valuation. The parties are also in dispute as to the correct methodology for valuation purposes.
The date at which the property is to be valued.
12 The respondent contends that the appropriate date is 19 January 2021 when a final plan was first provided to the applicant by the respondent's surveyor under s 88(1) of the Act. Section 88(1)(a) provides "the owner is to lodge with the council … the final plan, together with the schedule of easements". Section 88(1)(cb) also requires the owner to provide to the council "evidence, satisfactory to the council, of the completion of relevant works that are required to be carried out in relation to the proposed subdivision."
13 The applicant submits that the correct date is a date between 24 and 27 August 2021 when the version of the final plan which became "the sealed plan" was provided to the applicant by the respondent's surveyor.
14 The resolution of this question is a matter of statutory interpretation rather than assessment of
evidence.
15 Section 117(2) of the Act refers to a "final plan". The amount of compensation to be calculated depends on the existence of a final plan. Consistently with s 117(1) the final plan must be a final plan of subdivision. Under s 80 "plan of subdivision" means "a plan submitted to council for the purposes of a permit under [LPA Act 1993] in relation to the subdivision of land. "Final plan" is defined to mean "a final plan referred to s 87". Section 87 provides that:
"(1)
On receipt of the council's approval of a plan of subdivision, the owner is to arrange for the preparation of a final plan by a registered surveyor in accordance with –
(a) the requirements approved by the Recorder of Titles; and (b)
any other requirement of a permit issued under the Land Use Planning and Approvals Act 1993 .
(2) The owner is to attach a schedule of easements to the final plan which is to be
signed –
(a)
if there are any easements, profits a prendre or covenants set out, by any person who is, or persons who between them are, able to create the estates and interests that the purchasers of land comprised in the plan are to acquire; or
(b)
if there are no easements, profits a prendre or covenants set out, by all persons having any registered estate or interest in the land comprised in the plan, or by the legal practitioner acting for those persons."
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16 Under s 89(1) of the Act, if Council is satisfied that the final plan complies with the requirements of that part of the Act, it is to affix a seal to the plan and cause the sealed plan to be lodged in the office of the Recorder of Titles.
17 The plan of subdivision proposed under s 87 and lodged under s 88 ultimately becomes the sealed plan under s 89. "Sealed plan" is defined in s 80 as a plan which has been approved and sealed under this part and has taken effect as provided in s 94.
18 Section 94 of the Act provides that a final plan takes effect as a sealed plan when the Recorder of Titles signs and dates a memorandum on the plan that the plan is accepted.
19 It is common ground between the parties that the time for the valuation in accordance with s 117(2) of the Act is the date when a final plan is lodged under s 87; see West Tamar Council v Tasmanian Planning Commission [2013] TASSC 16 per Blow CJ.
20 A "final plan" is the plan prepared by the owner under s 87 and lodged under s 88 and sealed by the Council under s 89 before being sent to the Recorder of Titles for acceptance under s 94 of the Act.
21 Until a final plan under ss 88 and 89 goes through all the steps required it cannot be said to be a plan of subdivision in final form because amendments may be required to be made to it. Council may seek that amendments be made to what is submitted as a final plan, for example, under s 88(1)(cb) of the Act. Until the plan of subdivision travels through all the legal requirements up to the sending of the sealed plan to the Recorder of Titles, it is not an actual final plan. Until then, in every sense, it is a preliminary final plan. Therefore, in my view, the correct date for the valuation of the land comprising the proposed subdivision is the date on which the sealed plan was sent to the Recorder of Titles. There is in evidence a letter from the applicant to the Recorder of Titles dated 16 September 2021 enclosing the sealed plan.
22 In my view, the date submitted by the applicant as a date somewhere between 24 and 27 August 2021, should be replaced by the date 16 September 2021. There is most unlikely to be any material difference between the date of valuation taken into account by the applicant's expert, Mr Bevin, and the date of 16 September 2021,
Correct approach to valuation
23 The parties are agreed that "market value" approach to valuation is the preferred approach and that either methodology employed by the two expert valuers called to give evidence would be an appropriate method.
24 The major difference between the two valuers is that the respondent's expert, Mr Page, allowed a deduction for costs associated with the development of the property whereas the applicant's expert, Mr Bevin, did not allow for such a deduction.
25 Before allowing for these deductions, Mr Page valued the property at a higher value than that value by Mr Bevin and therefore higher than that contended for as an amount of compensation by the applicant in this proceeding.
26 Prior to making deductions for costs associated with the subdivision, Mr Page adopted an approach to valuation based on a similar although not identical method to Mr Bevin. As counsel for the applicant submitted, the costs of the development are purely hypothetical and are not related to what is required to be valued, which is the land when compared to other recently sold pieces of land which had been the subject of subdivision. So much is consistent with the observation of Blow CJ in West Tamar Council at [7] where his Honour said that:
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"It does not necessarily follow from the presence of [s 116(6)] that land must be
valued according to its unimproved value for the purposes of s117".
What was required to be valued here was eight lots of land intended to be improved and developed as a residential subdivision. That is consistent with the approach of Mr Bevin.
27 Support for the view that land should not be valued according to its unimproved value is found in the decision of Acting Chairman Geason in the Resource Management and Planning Tribunal on 24 May 2013 in Leary v Clarence City Council [2013] TASRMPAT 068. As was said in Leary the valuation of the land to be subdivided must be based on the view that it will be subdivided, therefore valuation based on the land's value after rather than before the subdivision was appropriate.
28 Having regard to the approach that the land to be valued should be valued on the basis of its market value after subdivision, I prefer the approach of Mr Bevin to the property's valuation to the approach of Mr Page. During the course of Mr Bevin's cross-examination an arithmetical error was identified in amounts regarding calculation of the value of like properties, such as 48 Mannata Street, Lauderdale. However, the error would not have made a material difference to Mr Bevin's assessment that the subject property he was valuing was valued at $2m.
Disposition
29 The Court orders as follows:
1 It is declared that the compensation sum received by the applicant in the amount of $125,000 from the respondent, is the correct amount payable pursuant to s 117 of the Local Government (Building and Miscellaneous Provisions) Act 1993 in respect of the property described in a proposed plan of subdivision of lots 1 to 8 at 26 Mannata Street, Lauderdale in Tasmania and forming part of the land then described in the folio of the Register Volume 23315 Folio 25;
2 The parties are to file and serve any other orders they seek the Court to make to give effect to these reasons for judgment within twenty eight (28) days.
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