Clarence City Council v Resource Management and Planning Appeal Tribunal - [2018] TASSC 41

[2018] TASSC 41

COURT: SUPREME COURT OF TASMANIA

CITATION: Clarence City Council v Resource Management and Planning Appeal Tribunal [2018] TASSC 41

PARTIES:  CLARENCE CITY COUNCIL
  v
  RESOURCE MANAGEMENT AND PLANNING

APPEAL TRIBUNAL
BARKER, Phillip Charles
WOOLLEY, Allison Ella Margaret

FILE NO: 2766/2017
JUDGMENT

APPEALED FROM: P Barker & A Woolley v Clarence City Council

[2017] TASRMPAT 15

DELIVERED ON:  6 September 2018
DELIVERED AT:  Hobart
HEARING DATE:  16 February 2018
JUDGMENT OF:  Brett J

CATCHWORDS:

Environment and Planning – Environmental planning – Development control – Subdivision – Principles governing consent or approval – Public open space – Requirement for public open space when subdividing – Relationship between legislation and planning scheme in respect of regulation of subdivision – Appeal dismissed.

Local Government (Building and Miscellaneous Provisions) Act 1993 (Tas), ss 81, 85.
Land Use Planning and Approvals Act1993 (Tas), s 51, Sch 1.
Land Use Planning and Appeals (Streamlining of Process) Act 2014 (Tas), s 85A.
Sultan Holdings Pty Ltd v John Fuglsang Developments Pty Ltd [2017] TASFC 14, cited.
Aust Dig Environment and Planning [194]

Environment and Planning – Environmental planning – Planning schemes and instruments – Tasmania – Other matters – Interpretation of planning scheme – Performance-based scheme – Whether compliance with scheme standards establishes consistency with legislative and scheme objectives.

Local Government (Building and Miscellaneous Provisions) Act 1993 (Tas), s 85.
Sultan Holdings Pty Ltd v John Fuglsang Developments Pty Ltd [2017] TASFC 14, cited.
Aust Dig Environment and Planning [51]

REPRESENTATION:

Counsel:
             Appellant:  A Finanzio SC and S Gory
             Respondents:  S B McElwaine SC
Solicitors:
             Appellant:  Dobson Mitchell & Allport
             Respondents:  Shaun McElwaine + Associates

Judgment Number: [2018] TASSC 41
Number of paragraphs: 62

Serial No 41/2018
File No 2766/2017

CLARENCE CITY COUNCIL v RESOURCE MANAGEMENT
AND PLANNING APPEAL TRIBUNAL, PHILLIP CHARLES BARKER
and ALLISON ELLA MARGARET WOOLLEY

REASONS FOR JUDGMENT BRETT J

6 September 2018

The second and third respondents are the owners of a piece of land, with an area of 120 hectares, which is situate in Cambridge, adjacent to the Barilla Rivulet. In 2016, they applied to the appellant in its capacity as the relevant planning authority for approval for subdivision of the land. The effect of the subdivision is to divide the land into two lots, one of 20 hectares and the balance of 100 hectares.
The proposed subdivision plan did not contain any provision for public open space. The position of the respondents was that the subdivision would not generate any significant additional demand for open space, given that the land already contains one house, which would be located on the balance lot, and the new lot of 20 hectares would accommodate a maximum of one more house. The nature and size of the lots means that the open space requirements of the occupants of the new dwelling can be easily met from the land.
The appellant refused the application because of the failure of the proposal to provide for public open space. It accepted, and it was common ground on the hearing of this appeal, that the subdivision proposal complied with the relevant requirements of the applicable planning scheme in all other respects. The position of the appellant was that, although the subdivision itself may not generate a substantial increase in the need for public open space, there are wider planning considerations, relevant to the local area, which establish a demand for public open space, and it was desirable to meet this demand from the subject land. In particular, it is proposed to utilise land on the border between the subject property and the Barilla Rivulet to contribute to a walking trail along the rivulet.
The second and third respondents appealed to the first respondent (the Tribunal) from the appellant's decision. The Tribunal agreed with their position, and directed that a permit should be issued for the subdivision. The appellant now appeals to this Court from that decision P Barker & A Woolley v Clarence City Council [2017] TASRMPAT 15. That appeal is authorised by s 25 of the Resource Management and Planning Appeal Tribunal Act 1993, but must be "on a question of law". Although there are several grounds of appeal, the crucial issue is whether the requirement for public open space in the subdivision must be restricted to additional demand specifically created by the subdivision, or can be validly justified on the basis of wider planning considerations.

The legal framework

The statutory regulation of subdivisions is the subject of Pt 3 of the Local Government (Building and Miscellaneous Provisions) Act 1993 (the LGBMP Act). Section 81 provides that an owner of land must not subdivide the land "except in accordance with … a plan of subdivision" which has been approved by the grant of a permit under the Land Use Planning and Approvals Act 1993 (the LUPA Act). That section also provides that, unless otherwise provided in the planning scheme, the application for approval of the subdivision plan is to be "made as if it were an application for a discretionary permit under section 57 of" the LUPA Act.
Sections 84 and 85 purport to deal with the question of whether the planning authority should approve a plan. Section 84 provides for circumstances in which a council "is not to approve a plan of subdivision". Those particular circumstances are not relevant to this case.
Section 85 is relevant to this case. It provides for a number of circumstances in which "the council may refuse to approve a plan of subdivision". In respect of this case, par (d)(iii) provides that:
"The council may refuse to approve a plan of subdivision if it is of the opinion
…
(d) that the layout should be altered to include or omit
…
(iii)public open space."
The planning authority relied upon this provision as one of the bases upon which it was entitled to refuse the application.
Sections 116 and 117 also have some relevance. Section 117 provides that instead of requiring the provision of public open space, the Council can require the payment of a cash sum. It is specially provided that this amount is to be held by the Council "for the acquisition or improvement of land for public open space for the benefit of the inhabitants of the municipal area": s 117(5). Section 116 provides for the requirement that the Council must purchase public open space in excess of an area of 5% of the land, where that requirement has been made to an owner.
Because of the fundamental requirement contained in s 81 for approval under the LUPA Act, it is also necessary to consider the relevant provisions of that Act. In particular, subdivision falls within the definition of development under s 3 of the LUPA Act. The significance of this is that it is therefore clear that the regulation of subdivision may be the subject of a planning scheme. If the planning scheme requires the grant of a permit in respect of a subdivision, then, by s 51(1) of the LUPA Act, the subdivision cannot proceed unless a permit is granted. Section 51(2) provides that in determining an application for a permit, a planning authority:
"(a)must seek to further the objectives set out in Schedule 1."
Section 51(3) provides that the decision of the planning authority in respect of the application is to be made by reference to the provisions of the relevant planning instrument applicable in accordance with the provisions of that section.

The planning scheme

The Tribunal determined, and it was common ground in the appeal before me, that the applicable planning instrument in respect of this application is the Clarence Interim Planning Scheme 2015.
The relevant land is located in the Environment Living Zone of that scheme. It is common ground that the effect of the operative provisions of the planning scheme, combined with the scheme's standards contained within the relevant zone, is that the subdivision application in this case required the grant of a permit, and that the planning authority had a discretion to refuse or permit the subdivision. Clause 8.10 sets out the matters which the planning authority must take into account in determining an application for a permit. Clause 8.10.1 provides that, in addition to the matters required by s 51(2) of the LUPA Act, the planning authority must take into consideration all applicable standards and requirements in the planning scheme. However, the provision goes on to provide that in the exercise of a discretion, the standards and requirements must be taken into account only insofar as each matter is relevant to the particular discretion being exercised.
Clause 8.10.3 is an interesting provision. It provides that in determining an application for a permit, the planning authority must not take into consideration some matters referred to in cls 2 and 3 of the scheme. Clauses 2 and 3 of the scheme set out the general purposes and objectives of the scheme. The role of this provision within the overall operation of the scheme will become apparent later in these reasons.
The specific scheme standards dealing with subdivision in the Environmental Living Zone are contained in cl 14.5. Public open space is the subject of cl 14.5.3. In relation to the provision of public open space, there is no acceptable standard but there is a performance criterion, which states:
"Public open space must be provided as land or cash in lieu, in accordance with the relevant Council policy."
It is again consistent with the provisions of the scheme, and not in issue in this appeal, that an acceptable solution, if there is one, is a permitted way of complying with a scheme standard. If it is necessary to rely on performance criteria, then a discretion arises. I will return to the role and effect of performance criteria shortly.
The relevant Council policy referred to in this performance criterion is not specified by the scheme. However, the Tribunal found that a policy adopted by the Council entitled "The Public Open Space Policy 2013", was incorporated as the relevant policy for the purposes of the said performance criterion. This finding was made after the Tribunal rejected an argument mounted by the second respondents in this appeal that the said policy was not validly incorporated into the performance criterion. The finding of the Tribunal in that regard is not challenged by either party in this appeal.

The Council's decision

The Council's decision to refuse the subdivision application was explained on the basis of the following grounds:
"a)First, that the application should be refused pursuant to S85(d)(iii) of the Local Government (Building and Miscellaneous Provisions) Act 1993 (the Act), because the plan of subdivision should be adjusted to include public open space; and
b)Second, because it is contended that the development is contrary to Clause 14.5.3 P2 of the Clarence Interim Planning Scheme 2015 because it does not provide public open space within the boundaries of the property in accordance with Council's Public Open Space Policy (2013)."
The two grounds do not represent separate reasons but rather identify two sources of discretion to refuse the application. The interaction between s 85 and the planning scheme is an issue in this appeal and will be considered later in these reasons. The actual reasoning of the Council when considered in the light of the evidence of its town planner given to the Tribunal, was that the wider planning needs of the relevant area, considered in the context of a number of policies and planning documents affecting the area, make it desirable that this subdivision provide public open space. In particular, a document which the Tribunal found was relevant, the Cambridge Masterplan 2016, recognises and provides for a rivulet trail alongside the Barilla Rivulet. The provision of public open space from this subdivision would fulfil the planning objectives and requirements of the masterplan by providing for the provision of land in order to contribute to the trail. Accordingly, the Council's position, and justification of its decision, was that the subdivision provided an opportunity to provide public open space which was consistent with the wider planning needs of the relevant area.

The Tribunal's decision

The precise nature of the Tribunal's decision is in dispute in this appeal. However, in general terms, the Tribunal concluded as follows:
·     Council's discretion to require public open space, in the relevant zone, arises under cl 14.5.3 of the planning scheme. In exercising that discretion, the Council is required to apply the relevant policy, which the Tribunal found to be the public open space policy.
·     Clause 6 of the policy is only engaged after a determination that the subdivision will result in increased demand or utilisation of public open space. The Tribunal noted: "This is an essential step in ensuring that the requirements relate to the development."
· A separate and largely unfettered discretion to refuse a plan of subdivision because public open space has not been provided, arises pursuant to s 85 of the LGBMP Act. Although the discretion is largely unfettered, the Tribunal's analysis of relevant case law led it to conclude that "a reasonable exercise of the discretion under s 85 is one which has regard to the particulars of the development and the impacts or likely consequences of the development upon the demand for public space".
·     Accordingly, the Tribunal concluded that "whether the pathway to the requirement for open space is the scheme, or the Act, the Tribunal holds that the requirement for open space must arise out of the development before a refusal is justified. … The law demands that the requirement must arise from the fact of the division of the land, so that the requirement relates to the development, not just an abstract policy".
·     The Tribunal found on the evidence that "it could not, on any view of it, be asserted that the development generates an open space requirement". It arrived at this conclusion essentially on the basis that the subdivision created one extra lot only, which would potentially generate a population increase of about 2.4 persons. The Tribunal found that "the development neither generates a need for public open space, nor will it cause any perceptible increase in demand upon existing open spaces".
· Accordingly, the Tribunal concluded that under both the provisions of s 85 and the scheme, there was no basis for the requirement of open space, and the subdivision should have been approved.
·     The Tribunal also found that the Council had not undertaken a proper analysis of the need for public open space before making a requirement for it. This was also a proper basis for the finding that the subdivision ought to have been allowed. This reasoning by the Tribunal is encapsulated at [84] of its decision:
"[84]     This case turns upon the Tribunal's finding that the Council has failed to consider whether the proposed subdivision causes an increase in demand for public open space such that the developer should be required to provide it. The Council has not made its case for that result because it has not satisfied the Tribunal by evidence that such a result will follow. Indeed the Appellants have demonstrated that that will not be the effect of the subdivision. To the extent Council considers that every subdivision causes such result, it is failing to undertake the analysis required by its Public Open Space Policy, and places itself at risk of being unable to justify the imposition of conditions requiring open space. In cases of single-lot subdivision of large rural lots, the outcome requires careful consideration. The enthusiastic adoption of even a worthwhile policy is not a substitute for that analysis."

The appellant's position

The grounds of appeal and the appellant's arguments are premised on the following propositions.
Firstly, the Council has a broad and largely unfettered discretion pursuant to s 85 of the LGBMP Act to refuse a proposal for subdivision which does not include public open space if it is of the opinion that there is a need for public open space. That need is informed by the planning requirements of the wider area, and does not depend on the subdivision generating a need or increased demand for public open space. (Grounds 1 and 2.)
Secondly, the appellant submits that the same test applies under the planning scheme. The provisions of the open space policy, as incorporated by cl 14.5.3 are only one consideration. Once again, the Council is bound to apply the broader planning principles set out in accordance with Sch 1 of the LUPA Act and the objectives of the planning scheme. (Grounds 3 and 4.)
On this basis, it is argued that the Tribunal erred by applying tests which limited the exercise of its discretion, standing in the shoes of the Council, to a requirement that the demand for open space arises from the fact of the division of the land, rather than have regard to broader planning principles and the requirements of the wider area. These arguments are reflected in the grounds of appeal which are set out as follows:
"1The Tribunal erred in holding that, for the Council to refuse to approve a plan of subdivision under s 85 of the Local Government (Building and Miscellaneous Provisions) Act 1993 (Tas) (Subdivision Act) because it was of the 'opinion' that the layout omitted to include public open space.
(a)   it was necessary for the need for the open space to 'fairly and reasonably relate to the [proposed subdivision]';
(b)   it was necessary for the demand for the open space 'to arise from the fact of the division of the land';
(c)   the demand for open space could not be assumed from the fact that land was being subdivided but was required to be 'demonstrated', that is proven by evidence.
2The Tribunal ought to have found that:
(a) the only limitation on the Council's power to refuse to approve a plan of subdivision under s 85 of the Subdivision Act is that the Council's 'opinion' is reasonable, arrived at in good faith, and is based on proper planning considerations;
(b) alternatively, the only limitation on the Council's power to refuse to approve a plan of subdivision under s 85 on the ground that layout does not include public open space is that the need for the public open space is 'reasonably capable of being regarded as being related to' the proposed subdivision; and
(c)   in either case, the limitation was satisfied on the facts as found.
3The Tribunal erred in holding that, for the Council to refuse to grant a permit under the Clarence Interim Planning Scheme 2015 (Planning Scheme) for a plan of subdivision because it was of the view that the plan should have included public open space:
(a)     it was necessary for the need for the open space to 'fairly and reasonably relate to the [proposed subdivision]';
(b)     it was necessary for the demand for the open space 'to arise from the fact of the division of the land';
(c)     the demand for open space could not be assumed from the fact that land was being subdivided was required to be 'demonstrated', that is proven by evidence.
4The Tribunal ought to have found that:
(a)   the only limitation on the Council's power to refuse to grant a permit for a plan of subdivision under the Planning Scheme, is that the Council's decision is reasonable, arrived at in good faith, and is based on proper planning considerations;
(b)   alternatively, the only limitation on the Council's power to refuse to grant a permit for a subdivision under the Planning Scheme on the ground that the subdivision did not include public open space is that the need for the public open space is 'reasonably capable of being regarded as being related to' the proposed subdivision; and
(c)   in either case, the limitation was satisfied on the facts as found."

Grounds 1 and 2 – s 85 of the LGBMP Act

As already noted, the Tribunal concluded that s 85 conferred upon the Council a discretion to refuse a subdivision, which operated independently of the planning scheme. However, it held at [75] that "a reasonable exercise of the discretion under s 85 is one which has regard to the particulars of the development and the impacts or likely consequences of the development upon the demand for public space".
Grounds 1 and 2 are premised upon the following propositions:
(a)That the Tribunal was correct in concluding that s 85 confers a discretion upon the Council to refuse a subdivision, independently of and irrespective of the contents of the planning scheme.
(b)That the discretion under s 85 is broad and largely unfettered. This discretion operates independently of the provisions of the planning scheme and supersedes those provisions in the event of conflict. The only limitation on the Council's power to refuse a plan of subdivision under this discretion is that its opinion relating to the need for public open space is "reasonably arrived at in good faith and is based on proper planning considerations". The appellant submits that the Tribunal erred when it determined that such discretion can only be exercised in circumstances where the demand or need for public open space can be demonstrated to have arisen "from the fact of the division of the land". The proper test is that the need for public open space is "reasonably capable of being regarded as being related to" the proposed subdivision. Further, in the exercise of its discretion, the Council should have regard to the broader planning considerations applicable to the relevant area, together with the objectives of the resource management and planning system, as set out in Sch 1 of the LUPA Act.
The respondents argue as follows:
(a)The operation of s 85 is constrained by s 85A. The effect of these provisions, when read together, is that where a planning scheme specifies an acceptable solution or performance criteria in relation to a matter referred to in s 85, such as the provision of public open space, then the discretion to permit or refuse an application for approval of a plan of subdivision must be exercised in accordance with the provisions contained in the planning scheme. In other words, in such a case, s 85 does not confer a discretion which will operate independently to the provisions of the planning scheme.
(b)If that is not the case and s 85 does confer discretion to refuse a plan of subdivision independently of the provisions of the planning scheme, then the Tribunal correctly exercised the discretion by reference to an evaluative consideration as to whether there was a connection between the requirement for open space and the particular development under consideration. Any complaint about the Tribunal's determination in that regard becomes a complaint about a question of fact, not one of law.
The primary question, therefore is the proper interpretation and operation of ss 85 and 85A, and their relevance to the Council's consideration of this application. If the respondent is correct, and the Council was required to determine the question of the provision of public open space solely in accordance with the provisions of the planning scheme, then grounds 1 and 2 cannot succeed. Although the Tribunal held that s 85 conferred an independent discretion to refuse approval of the subdivision, if it was wrong about this, then its consideration of that question simply becomes irrelevant, as does the argument of the appellant based on grounds 1 and 2. If the Council was not entitled to refuse the subdivision on this basis, then neither could the Tribunal have done so.
On its face, s 85 confers a general discretion upon the Council to refuse approval of a proposed subdivision, if it is of the opinion that public open space should be included in the layout of the subdivision. Prior to the introduction of s 85A, there was nothing in the Act to fetter the discretion thereby provided, although it was recognised that it must be exercised for legitimate and relevant planning purposes: Smith v Hobart City Council [2010] TASFC 9. However, in 2014, s 85A was inserted into the LGBMP Act. That section provides as follows:
"85A Acceptable solutions, or performance criteria, for subdivisions
(1) A planning scheme —
(a)may specify an acceptable solution, or performance criteria, in relation to subdivisions, that relate to a matter referred to in section 85; and
(b)may enable a permitted development permit or a discretionary permit to be issued in relation to a plan of subdivision if such an acceptable solution, or performance criteria, are complied with in relation to the plan of subdivision.
(2) If a planning scheme specifies an acceptable solution, or performance criteria, in relation to subdivisions, that relate to a matter referred to in section 85, that section does not apply in relation to the matter in respect of a development that complies with the acceptable solution."
The Tribunal determined that the section was not applicable in the circumstances of this case because the planning scheme does not provide an acceptable solution in respect of the provision of open space. It referred specifically to subs (2) and noted that the effect of the plain words therein, is to restrict the operation of the entire section to cases in which an acceptable solution is specified in the planning scheme. Mr McElwaine SC for the respondents argues that there is a clear error in drafting in s 85A(2), and that the words "or performance criteria" should be read into the end of subs (2). The effect of doing so, he argues, is to render s 85 inapplicable in respect of this subdivision application.
The appellant submits that the Tribunal correctly construed the provision, and therefore, s 85 applies as an operative provision which permits refusal of the application, irrespective of the provisions of the planning scheme.
I do not think that either submission correctly construes or applies s 85A. I do accept, however, as Mr McElwaine submitted, that to properly understand the role that the LGBMP Act now plays in respect of the approval of plans of subdivision, it is necessary to consider its relationship with the LUPA Act and to understand something of the legislative history.
Section 85A was inserted as part of a raft of amendments introduced by the Land Use Planning and Appeals (Streamlining of Process) Act 2014. Prior to those amendments, it can be accepted that Div 2 of Pt 3 of the LGBMP Act did operate to superimpose in respect of the approval of plans of subdivision, an independent system of regulation, which operated in respect of the provisions of a planning scheme. As already noted, s 84 mandates the refusal of the application if certain minimum requirements are not met, and s 85 provides the Council with the capacity to refuse a plan of subdivision in various circumstances. These include where it is of the opinion that the layout should be altered to include public open space.
The purpose of the amendments introduced by the Streamlining of Process Act, which included the insertion of s 85A, were explained in the second reading speech as follows:
"This act still sets out a range of requirements for local councils to determine if a subdivision should be approved. It operates parallel to the planning act and despite years of intent it has not been reviewed or consolidated with LUPAA properly.
As a consequence, there are two sets of controls for subdivisions and even where planning schemes set out all the basic requirements for lots, there is still a need to assess them under the Local Government (Building and Miscellaneous Provisions) Act.
This means that subdivisions can never be dealt with as permitted development even where they conform to all of the standards a planning scheme prescribes for a zone. A residential lot in a residential zone which provides the correct frontage and minimum size and shape has been subject to the time delay and costs of advertising simply because of the duplication of process.
This Government will introduce some immediate relief and provide that planning schemes can treat subdivisions as permitted developments where they include all the standards required. However, as some planning schemes in operation are old and there is no certainty that all safeguards are in place, the Local Government (Building and Miscellaneous Provisions) Act will remain as a safety net until the statewide planning scheme is in place.
The changes will allow a planning scheme to determine where subdivision development may be permitted or discretionary.
This will allow for a planning scheme to legitimately provide acceptable solutions for permitted development and performance criteria for discretionary permits and other provisions to address various matters in the Local Government (Building and Miscellaneous Provisions) Act, such as provisions in relation to public open space and roads."
The various amendments are consistent with the purpose described in the second reading speech. The interpretation provision, s 80, was amended to specifically define the terms "acceptable solution" and "performance criteria" to mean matters so specified to be such in a planning scheme. Section 84 was amended by the insertion of subs (1A) which provided that a planning scheme may specify an acceptable solution or performance criteria in respect of the matters referred to in that section, and enable a permitted development permit or discretionary permit to be issued if the acceptable solution or performance criteria is complied with in respect of the plan of subdivision. These provisions clearly evince a legislative intention to remove the double layer of regulation in respect of the approval of the plan of subdivision, and bring such determination within the provisions of the planning scheme only, where the planning scheme makes provisions for such matters.
As noted in the second reading speech, the said amendments are in preparation for the introduction of a State-wide planning scheme system, which will eventually comprehensively deal with all such matters on a consistent basis throughout the State. However, until then, the intent of the legislative scheme is that the LGBMP Act remain in place as a "safety net".
It is appropriate, in my view, to interpret s 85A in the light of the wider legislative scheme implemented by the Streamlining of Process Act, and with regard to the explanation provided in the second reading speech.
These matters inform the operation of s 85A(1). That subsection provides that a planning scheme may specify performance criteria in relation to subdivisions that relate to a matter referred to in s 85, and may enable a discretionary permit to be issued if such performance criteria are complied with in relation to a plan of subdivision. In my view, the intended operation of this provision is that where a planning scheme has so provided, the relevant application is to be assessed by reference solely to the provisions of the planning scheme. If s 85A(1) operates in this manner, then it can be seen that s 85A(2) will have a consistent and related operation without the addition of any further words. By virtue of subs (1), the discretion provided in s 85 to refuse the plan of subdivision, will still apply but must be exercised in respect of the relevant matter in accordance with the relevant provisions of the planning scheme. The sole purpose of subs (2) is to remove that discretion in circumstances where, under the provisions of the planning scheme, the relevant matter is dealt with in a way that would require the Council to accept the application as permitted, that is, where an acceptable solution has been specified. Therefore, contrary to the respondents' submission, there has not been a drafting error. Each subsection has operative effect, and subs (2) only deals with subdivisions which are permitted under the provisions of the scheme.
Mr Finanzio SC for the appellant argued that s 85A(1) should not be interpreted as operating in this manner, but instead on the basis that its only function is to provide express authority for a planning scheme to deal with such questions. Mr Finanzio submits that unless s 85A(2) is engaged, the discretion under s 85 is not constrained or limited to a consideration of the performance criteria which, in this case, is referrable to the Council's policy.
There are two fundamental difficulties with this argument. Firstly, it is inconsistent with the legislative policy as I have already noted and described. It would leave in place a two-tier system of regulation, notwithstanding that the matter in s 85 is regulated by the planning scheme. Under that interpretation, the general discretion under the LGBMP Act overrides and makes virtually irrelevant the development standards reflected in the performance criteria in the planning scheme. Secondly, the interpretation of subs (1) for which Mr Finanzio contends, would deprive subs (1)(b) of any operative or meaningful effect. If the sole purpose of subs (1) is to describe what a planning scheme may provide for, then it is superfluous, because that question is already provided for in the LUPA Act. This is clear from the definition of "development" contained in s 3, which specifically includes the subdivision of land. Further, that purpose is adequately accommodated, in any event, by subs (1)(a). Subsection (1)(b) is, in my view, intended to have operative effect. It is a fundamental principle of construction that a court "must strive to give meaning to every word of the provision": Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 per McHugh, Gummow, Kirby and Hayne JJ at [71]. The plain words of the provision make it clear that a permit may be issued where the relevant performance criteria has been met in respect of a matter referred to in s 85. This can only have one meaning, that where a planning scheme has specified performance criteria in respect of a matter referred to in s 85, the discretion is to be exercised in accordance with that criteria, and a permit may be issued where that criteria has been met. In those circumstances, s 85 will not superimpose any wider discretion than that contained in the planning scheme.
As already noted, the planning scheme prescribes development standards for subdivisions in the relevant zone. These standards include cl 14.5.3 which provides specifically for the question of the provision of public open space. The relevant standard has no acceptable solution but has performance criteria. The performance criteria under the relevant clause deals with both the arrangement of public open space (P1) and the requirement for its provision (P2). In my view, these are clearly intended to be performance criteria which "relate to a matter referred to in s 85" in particular s 85(d)(iii), that is "that the layout should be altered to include or omit – public open space". In those circumstances, s 85 makes it clear that there is a discretion to refuse the application if the Council is of the opinion that the layout should be altered to include or omit public open space. However, in accordance with s 85A(1)(b), that discretion must be exercised in accordance with the relevant performance criteria.
It follows that grounds 1 and 2 of the appeal cannot succeed.

Grounds 3 and 4 – the planning scheme

The appellant's argument under these grounds is that even if the assessment of the question of the provision of public open space is to be made solely by reference to the provisions of the planning scheme, the Tribunal erred by limiting its consideration to the public open space policy, which is the document incorporated into the scheme by the relevant performance criteria. The essence of the argument is that because s 51(2) of the LUPA Act requires a council to have regard to the objectives contained in Sch 1 of the LUPA Act, the consideration should have encompassed the wider planning requirements of the surrounding area. In other words, while the public open space policy is a relevant consideration, it is not the only consideration, and the exercise of discretion is not confined by it.
The respondent argues that the Tribunal did not, in fact, confine itself to a consideration of the policy, but engaged in an evaluative exercise on the (incorrect) premise that s 85 superimposed a general discretion. However, this argument can have little, if any, effect on the outcome of this appeal because the test which the Tribunal applied under the general discretion was identical to the test which it determined was applicable under the policy and, hence, the relevant performance criterion. The Tribunal's conclusions in this regard are set out at [38]-[40]:
"The corollary of Council's decision to refuse the subdivision in this case for failure to provide public open space is the proposition that any approval should be so conditioned. The authorities just discussed establish, that to be valid, such a condition must fairly and reasonably relate to the development. That requires a consideration of the effect of the development on demand for public open space, and demonstration of the proposition that a demand is created so that it may be said of such condition that it fairly and reasonably relates to the development.
That is the way the Tribunal approaches the matter.
It observes that Council's Public Open Space Policy 2013 incorporates such an approach by requiring the prospective change in demand to be assessed, so that it if the Policy is followed the legal requirements identified in the cases will have been considered."
The authorities to which the Tribunal refers in respect of the general discretion consider the validity of a condition which imposes a requirement for public open space. The cases in question are Western Australian Planning Commission v Temworth Holdings Pty Ltd [2004] HCA 63, 221 CLR 30; Read v Western Australian Planning Commission [2016] WASCA 181 and Lloyd v Robinson (1962) 107 CLR 142. Because of my conclusion that the assessment of the question of the need for public open space is to be made by reference to the planning scheme, and in particular the policy, and that no wider or residual discretion arises under s 85, it is not necessary for me to express any concluded view about the Tribunal's statement of the effect of the said authorities. I do observe that it cannot reasonably be disputed as a general proposition that to be valid, a condition must fairly and reasonably relate to the development. However, I am not convinced that the Tribunal is correct in taking the view that the relationship in terms of the requirement for public open space can only be satisfied by demonstration of the creation of demand for public open space by the development. It is not inconsistent with those cases that a sufficient relationship might be demonstrated in some other way, for example, that the particular location and configuration of the land means that the wider need for public open space is best satisfied from the subject land. However, as I will shortly discuss, I agree with the Tribunal that the policy did require the subdivision to generate the increased requirement for public open space. Accordingly, it is not necessary for me to express any concluded view about the proper test under a general discretion, and I prefer not to do so.
The Tribunal's interpretation of the policy led it to apply the same test under the performance criterion specified in cl 14.5.3. As already noted, that provision requires public open space "to be provided in accordance with the relevant council policy". The policy was determined by the Tribunal, without challenge in these proceedings, to be the "Public Open Space Policy 2013". The opening words of cl 5 of the policy are as follows:
"5 Subdivision
To ensure the delivery of regional or city wide POS outcomes, every subdivision that results in an increased demand and/or utilisation of POS is to be assessed on its merits according to this policy.
In the circumstances where it is established that a subdivision will result in increased demand for POS, the requirement for an area of POS and/or cash contribution in lieu of it is to be based on the following principles:
5.1With the exception of the subdivision of existing POS areas and subdivision for road and utility infrastructure, all subdivision of land (particularly but not limited to residential and rural residential type subdivision) are anticipated to potentially increase the demand for the provision of POS;
5.2That sufficient POS land is to be secured through the subdivision process to provide social and passive recreational opportunities and facilitate multiuser connectively through residential, rural, industrial and business/commercial land.
5.3...".

On the basis of those words, the Tribunal concluded that a precondition for a requirement that a subdivision provide public open space is that "... it is established that a subdivision will result in increased demand for POS ...". Clause 6.1 of the policy provides that the provision of public open space "needs to be considered in the context of neighbourhood, regional and city wide recreational needs ...", and otherwise incorporates wider planning considerations. The Tribunal concluded that cl 6 is only engaged if the precondition for the taking of public open space set out in cl 5, has been met.
I agree with the Tribunal's interpretation of the policy. Clause 3.8 of the policy lists among the policy's objectives the following:
"To articulate the basis and justification upon which the Council draws its requirement to take POS, or a cash contribution in lieu of it, in any and specific subdivision developments."
The opening words to cl 5, set out above, provide a clear articulation of "the basis and justification" for the taking of public open space. Clause 6 provides a set of wider considerations relevant to the decision to take public open space where the precondition has been established. I am satisfied that the Tribunal was correct in its approach to the operation of the policy.
It follows from this analysis of the Tribunal's decision that the appellant will have demonstrated an error of law if the test which the Tribunal posed was incorrect. The Tribunal applied this test in respect of its assessment under both s 85 and the scheme. Because of my conclusion that the discretion, irrespective of whether it arises under s 85 or the scheme, must be assessed by reference to the scheme, the issue will be resolved by the test applicable under the scheme. This question, in turn, depends upon whether the test under the scheme is solely defined by the performance criterion in cl 14.5.3, as the respondents argue, or requires a wider approach, including reference to the broader objectives set out in the legislation and the scheme, with the policy only one consideration, as is argued by the appellant.
It is common ground that the scheme, in particular, those parts that prescribe its operation, complies with the format set out in Planning Directive 1 (PD1), a Ministerial Directive issued under what was at the relevant time s 13 of the LUPA Act. The respondents submit that the scheme provisions, when read together, clearly evince an overall intention to operate on a performance-based approach, that is, to achieve certainty in respect of the assessment of development, and the exercise of discretion, by reference to the specific scheme standards as defined by the acceptable solutions and performance criterion. I accept this submission. That intended operation of the scheme becomes apparent when one examines its various interacting provisions.
The operation of the scheme is the subject of cl 7.0. Clause 7.5.1 provides that a use or development must comply with each applicable standard in a zone, specific area, plan or code. Clause 4.0 defines "standard" to mean, "... the objective of a particular planning issue and the means of satisfying that objective through either an acceptable solution or performance criterion presented as a test to meet the objective". The role of the acceptable solution or performance criterion as a "test" in respect of the relevant standard is confirmed by cl 7.5.3 which provides that:
"Compliance for the purposes of subclause 7.5.1 consists of compliance with the acceptable solution or performance criterion for that standard."
The operation of the scheme in this way is also consistent with and explains the presence and effect of cl 8.10.3.
These provisions strongly support the respondents' submission that in a performance-based scheme, certainty is achieved by specifying tests in respect of particular objectives by reference to the acceptable solution or performance criterion. Hence, the intended operation is that compliance with the relevant test will be sufficient to achieve a positive exercise of discretion in respect of the particular use or development.
The appellant argues that while certainty might be the purpose of an acceptable solution, compliance with the performance criterion simply gives rise to a discretion. It is argued that the exercise of that discretion must be in accordance with all relevant statutory provisions and other relevant provisions in the scheme. In particular, s 51(2) of the LUPA Act requires a planning authority when determining an application for a permit, to take into account the objectives set out in Sch 1 of the LUPA Act. This requirement is confirmed by the provisions of cl 8.10.1 of the scheme. Hence, according to the appellant's argument, even if the development is assessed after an evaluative process as complying with the relevant performance criterion, the planning authority must also take into account wider planning considerations in accordance with the said objectives.
I do not agree that a performance-based approach is inconsistent with the statutory requirement in s 51(2) to take into account the objectives in Sch 1 of LUPA. The objectives are stated in general terms. Their formulation makes it clear that they are intended to operate by providing context and guidance in respect of the evaluative assessment engaged in in respect of various decisions required within the planning system generally, including in respect of the exercise of a specific discretion. Hence, the objectives are relevant to the exercise of discretion, as part of an integrated process of synthesis: Sultan Holdings Pty Ltd v John Fuglsang Developments Pty Ltd [2017] TASFC 14. However, they cannot supplant the specific criteria against which the development is to be tested, nor in themselves constitute a test of a proposed development. Von Witt v Hobart City Council (1995) 86 LGERA 134. Such an interpretation would, in fact, be directly inconsistent with the said objectives, in particular, objectives (a) and (b) of Pt 2 of Sch 1. A performance-based system employs a top down approach, where the various levels of objectives and principles are eventually distilled into a practical test defined by performance criteria and acceptable solutions. This approach provides a reasonable level of predictability which is the intended operation of such a scheme.
The appellant also argues that certainty of outcome is contrary to the nature of a discretion. The appellant refers to the distinction between an acceptable solution and a performance criterion.
I do not accept this submission. Its fallacy can be demonstrated by reference to the application of the relevant performance criterion in this case. The requirement to test the need for public open space against the policy does not lead to a predetermined or specified outcome. The assessment of the need for public open space against the policy requires an evaluation which necessarily requires the exercise of discretion, but on a clearly defined basis and against detailed principles and guidelines. This was the evaluation which the Tribunal noted had not been adequately undertaken by the Council. As Porter AJ said in Fuglsang at [63]:
"The law is quite familiar with the notion of a specific criterion as a prequalification being dependent upon a state of satisfaction on the part of an administrative decision-maker. Additionally, the Tribunal took the view that the performance criteria in cl 16.2(j) must be complied with if the application was to be approved. Sultan does not argue with that proposition. The satisfaction of that performance criterion involves the making of a judgment."
When the relevant performance criterion and these provisions of the policy are regarded as a whole, it can be seen that the intended operation of the planning scheme in respect of the taking of public open space in this zone in the event of subdivision, is that the requirement for public open space will be assessed against the policy. The policy is comprehensive and provides a clear basis for the taking of public open space. It would be contrary to the intended operation of a performance-based scheme to proceed in the manner contended for by the appellant, that is, that notwithstanding that the assessment of public open space against the policy leads to a conclusion that public open space ought not be taken, wider planning considerations can justify a contrary outcome. Such reasoning is reminiscent of the two-stage discretionary process which was rejected by the Full Court in Fuglsang. Such a process has the capacity to lead to unpredictable and arbitrary outcomes and make otiose the performance criterion relevant to the particular objective.
As already noted, although the Tribunal did also assess the question of the provision of public open space under the general discretion which it erroneously concluded existed under s 85 of the LGBMP Act, it did discretely assess the evidence and apply the provisions of the scheme in the manner described above. The Tribunal took evidence from the Council planner, and a town planner, Mr Read, who gave evidence on behalf of the respondents. Mr Read's evidence assessed the demand created for public open space by the subdivision. In respect of this evidence, the Tribunal found as follows at [69]-[70]:
"Applying the Scheme, and the 'relevant policy' referred to in Clause 14.5.3 P2, and accepting the analysis required by Clause 5 of that Policy as undertaken by Mr Read, the Tribunal finds that the development neither generates a need for public open space, nor will it cause any perceptible increase in demand upon existing open spaces. It is satisfied that the extant covenants on the land are relevant matters in this context and will preserve areas for recreational purposes, though without these it would reach the same conclusion on the basis of Mr Read's evidence.
It follows that the subdivision should have been approved under the provisions of the Scheme, complying as it did with all the requirements within it. "
I am satisfied that this finding was based on the correct test and did not demonstrate an error of law. The finding was reasonably open to the Tribunal on the evidence, and was sufficient to justify the orders made by the Tribunal.

Conclusion

As none of the grounds have been made out, the appeal will be dismissed.