Engadine Area Traffic Action Group Inc v Sutherland Shire Council

[2004] NSWLEC 264

Land and Environment Court

of New South Wales

CITATION:

Engadine Area Traffic Action Group Inc v Sutherland Shire Council & Anor [2004] NSWLEC 264

PARTIES:

APPLICANT:
Engadine Area Traffic Action Group Inc

FIRST RESPONDENT:
Sutherland Shire Council

SECOND RESPONDENT:
Wallis & Moore Pty Limited
ACN 000 971 179

FILE NUMBER(S):

40087 of 2004

CORAM:

Lloyd J

KEY ISSUES:

Construction and Interpretation :- condition of a development consent - contributions collected under s 94 of the Environmental Planning and Assessment Act 1979 - nature of contributions - council's discretion in applying contributions - effect of changed planning controls to application of contributions - refund of contributions

LEGISLATION CITED:

Environmental Planning and Assessment Act 1979 s 54 and s 94
Environmental Planning and Assessment (Contributions Plans) Amendment Act 1991
Local Government Act 1993 s 24
Local Government Act 1919 s 111(2)(b)

CASES CITED:

Allen Commercial Constructions Pty Ltd v North Sydney Municipal Council (1970) 20 LGRA 208;
Bathurst City Council v PWC Properties Pty Limited (1998) 195 CLR 566;
Denham Pty Ltd v Manly Council (1995) 89 LGERA 108;
Frevcourt Pty Ltd v Wingecarribee Shire Council (2003) 128 LGERA 48;
Hubertus Schuetzenverein Liverpool Rifle Club Limited v Commonwealth (1994) 51 FCR 213;
Idameneo (No 9) Pty Ltd v Great Lakes Shire Council (1990) 70 LGRA 27;
Levadetes v Hawkesbury Shire Council (1988) 67 LGRA 190;
Nelson v Ballina Shire Council (1993) 80 LGERA 271;
Progress & Securities Pty Ltd v North Sydney Municipal Council (1988) 66 LGRA 236;
Rockdale Municipal Council v Tandel Corporation Pty Ltd (1975) 34 LGRA 196;
Rodmac Investments Pty Ltd v Great Lakes Shire Council, NSWLEC, Bignold J, 2 August 1992, unreported;
Shell Co of Australia Ltd v Parramatta City Council (No 2) (1972) 2 NSWLR 632;
Sydney Serviced Apartments Pty Ltd v North Sydney Municipal Council (No 2) (1992) 78 LGERA 404;
Toadolla Co Pty Ltd v Dumaresq Shire Council (1992) 78 LGERA 261;
Wallis & Moore Pty Ltd v Sutherland Shire Council, NSWLEC, Assessor Hanson, 15 April 1982, unreported;
Winn v Director General of National Parks and Wildlife [2001] NSWCA 17

DATES OF HEARING:

29/04/2004; 30/04/2004 and 07/05/2004 (written submissions)

DATE OF JUDGMENT:

05/31/2004

LEGAL REPRESENTATIVES:

APPLICANT:
Mr J Johnson (barrister)
SOLICITORS:
Colin Biggers & Paisley

FIRST RESPONDENT:
Mr T F Robertson SC, Ms J M Jagot (barrister) and Ms E R W Yam (barrister)
SOLICITORS:
Abbott Tout

SECOND RESPONDENT:
Mr J A Ayling SC
SOLICITORS:
R S Davis & Davis

JUDGMENT:

- 15 -

IN THE LAND AND

ENVIRONMENT COURT

OF NEW SOUTH WALES

40087 of 2004
Lloyd J
31 May 2004

ENGADINE AREA TRAFFIC ACTION GROUP INC

Applicant
v

SUTHERLAND SHIRE COUNCIL

First Respondent

WALLIS & MOORE PTY LIMITED

ACN 000 971 179

Second Respondent

JUDGMENT

Introduction

1 The first respondent, Sutherland Shire Council (“the council”), received monetary contributions from the second respondent, Wallis & Moore Pty Limited (“Wallis & Moore”), in connection with several development consents for the subdivision of land at Woronora Heights. The money was for the purpose of constructing roadworks providing access to the subdivision. The council has decided not to proceed with the construction of the northern access road and has entered into an agreement with Wallis & Moore to return the amount of $825,810.17 being the sum held in its trust account for the purpose of the roadworks.

2 The applicant, Engadine Area Traffic Action Group Inc, seeks declarations to the effect that the council holds the money pursuant to s 94 of the Environmental Planning and Assessment Act 1979 (“the EP&A Act”) for the purpose of constructing the northern access road; that in breach of s 94(6) of the EP&A Act the council has failed to apply the money for the purpose for which it was intended; and that in agreeing with Wallis & Moore to return the money the council is in breach or in anticipatory breach of s 94(6) of the EP&A Act. The applicant also seeks an order restraining the council from disposing of the money other than for the purpose for which it was collected; and an order that the council carry out the works for which the monetary contributions were paid.

The council’s power to levy contributions

3 Section 94(1) of the EP&A Act enables a consent authority, if it is satisfied that a development, the subject of a development application, will or is likely to require the provision of or increase the demand for public amenities or public services within the area, to grant consent to that application subject to a condition requiring the payment of a monetary contribution. Section 94(6) is as follows:

(6) The consent authority is to hold any monetary contribution paid in accordance with a condition referred to in subsection (1) (and any additional amount earned from its investment) for the purpose for which the payment was required and apply the money towards providing public amenities or public services or both within a reasonable time and in such a manner as will meet the increased demand for those amenities or services or both.

4 Subsection (6) of s 94 in its present form was enacted on 1 July 1998 (Environmental Planning and Assessment Amendment Act 1997). It was previously numbered sub-s (3) and read as follows:

(3) The council shall hold any monetary contribution paid in trust for the purpose for which the payment was required and apply the money towards providing public and apply the money towards providing public amenities or public services or both within a reasonable time and in such a manner as will meet the increased demand for those amenities or services or both.

5 The words “in trust” were removed from the subsection and the words “(and any additional amount earned from its investment) for the purpose …” were added on 14 February 1992 (Environmental Planning and Assessment (Contributions Plans) Amendment Act 1991). As noted above, that subsection was subsequently renumbered as sub-s (6) in 1998.

Facts

6 In September 1981 Wallis and Moore appealed against the deemed refusal of a development application to subdivide land in Woronora Heights. The appeal, Wallis & Moore Pty Ltd v Sutherland Shire Council (No. 10406 of 1981) was heard in the Land and Environment Court by Assessor Hanson, who on 15 April 1982 granted development consent and approved the subdivision plan subject to certain conditions, including the following:

23 The payment of a contribution of $1,500 per residential lot shall be payable to Council towards the cost of roadworks providing access to the sub-division. This sum shall be adjusted annually in accordance with movements in the Consumer Price Index.

7 In reaching his decision, Assessor Hanson considered three approaches that could be taken to the application, as follows:

In his submissions Mr Hemmings [who appeared for the council] suggested that there were three approaches which I could take to the application: the first was to dismiss the appeal because the environmental study had not been carried out; the second was to approve the application subject to the construction of a specific road, being one of those recommended by the Council engineers; the third was to approve of the application subject to the agreed conditions which overcame all of the earlier criticisms of the subdivision pattern and subject also to northern link being by at least a fire trail constructed to public road standards with a cash contribution towards the cost of such other road as the Council may elect to construct.
In all the circumstances I have decided that the appropriate course is the third of those put forward by Mr Hemmings and for the sake of completeness I shall briefly indicate my reasons.

8 Assessor Hanson made further comments in his reasons relating to the construction of a northern access road stating:

…it is clear, in my mind, that the original decision regarding the use of the land was made on the basis that there should be both north and south road links. What the appellant originally proposed was in my opinion an inadequate substitution for those original proposals and had it been left on that basis I would not have approved the application. As it is, the matter has not been left on that basis and what is now proposed is the link and an additional fire trail to the south, a fire trail to the north and such road link to the north as the Council will ultimately determine. In my view such access is adequate and subdivision of the land should not be delayed any longer notwithstanding that the high level bridge and connecting road work originally envisaged will not be available, at least for some considerable period of time.

9 In his concluding remarks, prior to setting out the orders, Assessor Hanson stated:

The proposal finally before me is an amalgam of various plans and submissions made in the course of the hearing. I think, however, that the orders which I make below should make it sufficiently clear that I am granting consent to the total subdivision application including all Crown land subject to the provision of the road link and fire trail to the south (the later being indicated on the drawing being exhibit K) together with construction of the fire trail access to the north, such fire trail to be constructed to public road standards completely to the Council’s satisfaction and the payment of a cash contribution towards the construction of a northern road link by the Council in such location and subject to such design and conditions as Council determines after proper investigation.

10 From 1982 until 2001, the council obtained and considered several assessments for the potential provision of a northern link road to the subdivided land. On 9 April 2001, however, the council decided that it did not wish to expend the money on the construction of an access road in the area of the existing fire trail to the north of the subdivisions, and resolved that the area through which the proposed northern access road would pass be rezoned to Environmental Protection 7(b).

11 In August 2002, Wallis & Moore brought separate proceedings in the Land and Environment Court seeking, inter alia, a declaration that the council had failed to apply the monetary contributions paid by it for the purpose which the money was collected and an order that the council repay the monetary contributions. On 4 November 2003, the Court made interim orders by consent in those proceedings for the repayment of an agreed amount of $825,810.17, subject to any other order being made by the Court, including in any proceedings concerning the monetary contributions or the condition, taken within three months. The present applicant subsequently commenced these proceedings on 30 January 2004.

The parties’ submissions

12 Mr J Johnson, appearing for the applicant, relies upon the following submissions.

(a) Amendments to the EP&A Act removing the words “in trust” from s 94(3) (now s 94(6)) had no effect on the nature of the council’s obligations relating to the holding and application of the moneys paid (Frevcourt Pty Ltd v Wingecarribee Shire Council (2003) 128 LGERA 48 at 61-62).

(b) A trust has been created by s 94(6) of the EP&A Act. This trust is a statutory trust for public purposes (Levadetes v Hawkesbury Shire Council (1988) 67 LGRA 190 at 195; Toadolla Co Pty Ltd v Dumaresq Shire Council (1992) 78 LGERA 261 at 267; Bathurst City Council v PWC Properties Pty Limited (1998) 195 CLR 566).

(c) The trust implements planning policy (Rockdale Municipal Council v Tandel Corporation Pty Ltd (1975) 34 LGRA 196 at 204-205 citing Walsh J in Allen Commercial Constructions Pty Ltd v North Sydney Municipal Council (1970) 20 LGRA 208 at 216).

(d) The purposes of the trust are ascertained from the terms of the development consent creating it (Nelson v Ballina Shire Council (1993) 80 LGERA 271 at 281; Levadetes v Hawkesbury SC at 195). The council should not be excused from the obligations of a development consent where it has accepted the benefit (Progress & Securities Pty Ltd v North Sydney Municipal Council (1988) 66 LGRA 236). A supervisory role for the Court should be inferred (EP&A Act s 96AA). In construing the conditions of the development consent, the Court should have regard to Assessor Hanson’s reasons for judgment.

(e) The council’s failure to apply the moneys in a reasonable time and its decision not to apply them at all is a breach of the duty imposed by s 94(6) of the EP&A Act.

(f) The council’s discretion does not extend to not constructing the northern access road at all (Nelson v Ballina Shire Council at 286). The council’s discretion to act under other powers, such as under s 54 of the EP&A Act, is constrained to the extent of any inconsistency with the trust. Thus, its attempt to rezone the land is a breach of the trust.

(g) The purposes have not become impossible to fulfil. If the Court, however, determines that circumstances have changed, such that the need for the service no longer exists or that the purpose has become impossible to fulfil, application must be made to the Court by the council to vary the obligations of the trust.

(h) It would be unconscionable for the council to deny its undertakings to the Court in 1982.

13 Mr T F Robertson SC, appearing with Ms J M Jagot and Ms E R W Yam for the first respondent, relies upon the following submissions.

(a) The only potential source of a duty is s 94(6) of the EP&A Act. The duty under this subsection:

(i) is necessarily subject to the administrative discretion of the consent authority to make it manageable and workable (Rodmac Investments Pty Ltd v Great Lakes Shire Council (NSWLEC, Bignold J, 2 August 1992, unreported).

(ii) is not owed to any individual and is not aligned with the concept of any private trust (Toadolla; PWC Properties).

(iii) is not to provide public amenity or public service (Toadolla; Frevcourt).

(iv) is subject to the exhaustion of the funds and the ongoing demand remaining the same (Frevcourt).

(v) must be subject to the proper exercise of other functions vested in a consent authority so that if the duty is inconsistent with the proper exercise of those functions it must yield (Local Government Act 1993 s 24; EP&A Act s 54).

(b) There is no breach of s 94(6) of the EP&A Act.

(c) The imposition of a condition under s 94 does not circumvent the need for a council to comply with other laws, nor does it fetter a council’s discretion not to undertake public works, or its statutory duty to determine having regard to environmental considerations whether to approve works which the condition might contemplate.

(d) The condition, and any duty under s 94 of the EP&A Act, does not impose any obligation on the council to construct a work. It merely makes funds available to be applied to the construction of a work if it eventuates.

(e) Any breach that subsisted prior to 4 November 2003 was remedied by the entry into consent orders by the first and second respondents. The consent orders were not an undertaking by the council to the Court, but unilateral action by the Court exercising the functions of the consent authority and granting rights in rem. The Court should not refer to the decision of Assessor Hanson to construe the consent differently from its unambiguous terms (Sydney Serviced Apartments Pty Ltd v North Sydney Municipal Council (No 2) (1992) 78 LGERA 404 at 407-408; Hubertus Schuetzenverein Liverpool Rifle Club Limited v Commonwealth (1994) 51 FCR 213; Shell Co of Australia Ltd v Parramatta City Council (No 2) (1972) 2 NSWLR 632 at 637).

(f) The Court has jurisdiction to make orders under s 124 of the EP&A Act only if there has been a breach of that Act. Since there is no breach of the Act, no orders can be made.

(g) If the Court is satisfied there is a breach, the dispute is not justiciable because of the administrative discretion vested in the council as a matter of necessity to make s 94 workable and manageable (Rodmac Investments cited with approval in Frevcourt; Toadolla at 267; Nelson v Ballina SC at 286; Denham Pty Ltd v Manly Council (1995) 89 LGERA 108 at 111).

(h) As a matter of ordinary discretion, the Court would not make any orders in the nature of mandamus, since such an order would require the council to carry out development that ought to be prohibited from being carried out, or ought not be carried out, under Pt 3 and Pt 4 of the EP&A Act respectively.

(i) The contribution is a tax, not a trust.

14 Mr J A Ayling SC, appearing for the second respondent, generally adopts the submissions by Mr Robertson and also relies upon the following submissions:

(a) Since it has become impossible for the council to expend the funds for the purpose of constructing a northern access road, the council is no longer entitled to keep the money.

(b) The trust (if it is a trust) could be described as a “statutory trust”. The trust is analogous with a charitable trust (PWC Properties at 585-586). The EP&A Act is not inconsistent with the operation of a charitable trust, so that when the subject matter of the trust ceases to exist, the trustee may deal with the money in some other way at the request of the donor. The trust has ceased to have any subject matter and the funds cannot be spent on another project (EP&A Act s 94(6); Rockdale Municipal Council v Tandel Corporation at 206).

(c) The Court does not have a general supervisory jurisdiction in respect of s 94 funds. The Court can only give relief if it is satisfied that refunding the money to the second respondents would amount to a breach of the EP&A Act.

(d) The council has the power to refund the unexpended money (Frevcourt).

Consideration
The nature of the duties arising under s 94(6) of the EP&A Act

15 As noted above, prior to amendments under the Environmental Planning and Assessment (Contributions Plans) Amendment Act 1991, which commenced on 14 February 1992, the relevant provision regarding payment towards the provision or improvement of amenities or services (s 94(3) of the EP&A Act) contained the words “in trust”.

16 In Levadetes v Hawkesbury Shire Council (1988) 67 LGRA 190, Holland J described the mandatory obligations imposed on a council by s 94(3) of the EP&A Act as follows (at 195):

The first is to hold the money in trust for the purpose for which the payment was required. The second is to apply the money towards providing the relevant public amenities or services. The third is to do so within a reasonable time. The fourth is to apply the moneys in such a manner as will meet the increased demand for those amenities or services.

17 The first of these obligations requires the council to hold the moneys in trust. Mr Robertson submits, however, that the subsequent removal of the words “in trust” from the statutory provision was intended to clarify the position that the monetary contributions do not amount to a private law trust. Mr Robertson relies upon the second reading of the Environmental Planning and Assessment (Contributions Plans) Amendment Bill. That reading indicates that the removal of the words “in trust” would enable councils to streamline their accounting practices by placing these monetary contributions with their general fund rather than holding them in a separate trust.

18 In Frevcourt Pty Ltd v Wingecarribee Shire Council (2003) 128 LGERA 48, Pain J stated (at 61) that the deletion of the words “in trust” from the provision did not alter the nature and extent of the council’s obligations under s 94. In that case, development consents had been granted for a number of subdivisions subject to conditions requiring the payment of a contribution for roadworks, open space and community facilities. Her Honour characterised the nature of this monetary contribution as a statutory trust.

19 A statutory trust is different to a trust recognised in private law. In Bathurst City Council v PWC Properties Pty Limited (1998) 195 CLR 566 the High Court considered the nature and extent of a statutory trust for public purposes. In that case, the High Court considered the nature of the classification of public land as “community land” under cl 6(2) to Sch 7 of the Local Government Act 1993, being land “subject to a trust for a public purpose”. In considering the nature and extent of this “trust”, Gaudron, McHugh, Gummow, Hayne and Callinan JJ stated (at 592 [67]):

The term “trust” in cl 6(2)(b) of Sch 7 is apt to include those governmental responsibilities which, whilst not imposing a trust obligation as understood in private law, may fairly be described as a “statutory trust” which bound the land and controlled what otherwise would have been the freedom of disposition enjoyed by the registered proprietor of an estate in fee simple. The trust was “not a trust for persons but for statutory purposes.

20 Similarly in these proceedings, the monetary contributions held by the first respondent are governed by statute and are for a public purpose, namely the construction of roadworks to provide access to the subdivision. This is reinforced by the judgment of Pearlman J in Toadolla Co Pty Ltd v Dumaresq Shire Council (1992) 78 LGERA 261 at 267, where her Honour stated that:

... when one examines the statutory trust created by s 94 in the town planning context, it becomes obvious that there are features which distinguished that “trust” from “trusts” that are usually the subject of trust law. The s 94 trust refers to monetary contributions which the Council receives in order to discharge public administrative functions. There are no circumstances here of enforcement of private rights between private citizens. Next, I would be loathe to conclude that the beneficiary of the trust is the contributor who paid the monetary contribution, in the sense that the Council, as trustee, would need to act solely in that beneficiary’s interest. That is not at all the case – there is a special purpose attached to the trust which involves the public as a whole in the provision of public amenities and public services.

21 Pearlman J provided even further clarification of the nature and extent of the statutory trust under s 94, stating (at 268):

..it is, in my opinion, inappropriate to apply general principles of trust law to the “trust” created by s 94(3) so as to find breaches of trust, unless the language of the section expressly or by necessary implication imports those principles. I think it does not...

22 I conclude, therefore, that the monetary contributions in the present case are characterised as a statutory trust for a public purpose, as distinct from a trust under private law. The nature and extent of this statutory trust is consistent with the second reading speech described above, which indicates that such moneys could be placed with the council’s general fund.

23 I now turn to consider whether the council is in breach or anticipatory breach of its obligations under s 94(6) of the EP&A Act.

Does the council’s failure to expend the contributed moneys amount to a breach of s 94(6)?

24 The council’s obligations under s 94(6) are not subject to the general law of trusts, but are instead governed by those duties set out in the section itself. As stated earlier, these duties were set out by Holland J in Levadetes and are as follows:

(a) to hold the money in trust for the purposes for which they were contributed; and

(b) to apply the money towards providing the relevant public amenity; and

(c) to do so within a reasonable time; and

(d) to apply the money in such a manner as to meet the increased demand for this amenity.

25 There is no suggestion in the present case that the council has failed to hold the money for the purpose for which it was contributed. The applicant submits, however, that the council has failed to apply the money towards providing the relevant public amenity for which the payment was made. This submission relies upon a construction of the words “apply the money towards” to mean a requirement that the money must be applied to provide access to the subdivision. The respondents contend that these words merely mean that if the money is applied, that it be applied towards the specified public purpose.

26 In Rodmac Investments Pty Ltd v Great Lakes Shire Council (NSWLEC, 2 August 1991, unreported), Bignold J described the council’s obligations regarding the application of moneys collected as follows:

Although in the case of the statutory trust created by s 94(3), the statute itself makes clear stipulations as to whether, when and how the trust duties are to be fulfilled, an administrative discretion vested in the consent authority must, by necessary implication, exist in order that the trust can be implemented in a workable and manageable manner and the trust purpose be fulfilled.

27 Clearly, the council as the consent authority has a discretion to determine how to apply the monetary contributions, provided that the money is not expended on some unrelated purpose. Upon the assumption that it is the northern access road to which the condition refers, the council contends that it will not be able to apply the monetary contributions towards the construction of such a road because the rezoning of the land will frustrate this course of action. The Court has recognised that the obligation of a council under s 94 of the EP&A Act may be affected by events subsequent to the imposition of the condition. Denham Pty Ltd v Manly Council (1995) 89 LGERA 108 concerned a condition requiring a contribution towards open space and civic public places. Although the development was commenced, it was later abandoned and another development consent over the same land was obtained. Although the decision of Talbot J was limited to the particular facts and circumstances of that case, his Honour referred to the possibility that circumstances may alter by reason of subsequent events. Talbot J noted, in particular, the subsequent event of the development not being carried out so that the relevant demand for the public amenity would not arise. In Levadetes Holland J was not required to consider the nature of any obligation where there was potential frustration. Nevertheless, his Honour observed (at 196), in obiter, that the passage of time alone may lead to “insurmountable difficulties”. Similarly in Idameneo (No 9) Pty Ltd v Great Lakes Shire Council (1990) 70 LGRA 27 at 32, Cripps J stated, in obiter, that if the contributions cannot be used for the purpose “more difficult questions may arise”.

28 The obligation of council to apply the monetary contributions towards providing access to the subdivision in the present case has been subsequently affected by the council’s resolution of 9 April 2001. The resolution was made consistent with the council’s functions under s 24 of the Local Government Act 1993 (“the LG Act”) and the council decided that the area to the north of the subdivision be rezoned to Environmental Protection 7(b), which would thus frustrate the ability of the council to construct an access road in this area. The council has pursued this rezoning by preparing a draft local environmental plan in accordance with its powers under s 54 of the EP&A Act. These subsequent events will, when the resultant local environmental plan is made, frustrate the council’s ability to apply the funds towards the purpose for which they were contributed. Moreover, these actions were taken as part of the council’s unfettered capacity to perform its powers, duties and functions. In my opinion, the council’s obligations under s 94 must necessarily be construed subject to the proper exercise of council’s functions under s 24 of the LG Act and s 54 of the EP&A Act. There is nothing in the wording of s 94(6) of the EP&A Act to suggest that the holding of monetary contributions should limit or restrict the powers a council otherwise possesses to perform its functions. Therefore, the council’s duty to apply the contributions towards the relevant public amenity exists only to the extent that it is consistent with the proper exercise of council’s functions. Where the subsequent exercise of council’s functions, in this instance the proposed rezoning of land, will make the application of the contributions impossible, the council becomes no longer obliged to apply the money towards the provision of the public amenity. If it is permissible to have regard to Assessor Hanson’s reasons for decision, they indicate that the council would have the discretion to determine whether it chose to construct a northern access road at all (“…a cash contribution towards the cost of such other roads as the Council may elect to construct.”). Moreover, a duty to apply the contributions towards the specified works would be a fetter upon the council’s ability to perform its planning functions. The monetary contribution made under s 94 of the EP&A Act does not require the council to apply the money where it would conflict with changed planning controls. The applicant’s arguments would mean that a council is never able to change its mind about the planning of an area or change its mind about the need for particular public amenities or public services: the council would be stuck with a planning regime for the area frozen in time 30 years ago. I find, therefore, that the council is not in breach of s 94(6) of the EP&A Act by failing to apply the monetary contributions to the provision of a northern access road in the light of the changed planning for the area and changed planning controls now being set in place since the contributions were made.

29 It is not necessary, in the present case, to consider whether the council has failed to apply the money within a reasonable time. It is necessary, however, to consider whether the council can refund these moneys to the party who initially contributed them.

Can money be refunded to a contributor consistent with the nature and extent of the council’s obligations under s 94 of the EP&A Act?

30 As noted by Pain J in Frevcourt (at 69), there does not appear to be any cases where the Court has ordered a repayment of the funds paid under s 94 of the EP&A Act. In Frevcourt, however, her Honour suggested that the payment of such funds to a contributor might not be inconsistent with the obligations of the council under s 94 of the EP&A Act. Her Honour stated (at 72):

The EP&A Act is silent as to whether a refund of s 94 contributions is appropriate. Toadolla does not rule out a payment from the statutory “trust” in which s 94 contribution moneys are held to the contributor of those funds. Pearlman J’s comments in Toadolla on the nature of the trust to the effect that the beneficiary of the trust is not necessarily the contributor also do not suggest that in no circumstances can a refund ever be made. PWC [Properties] did not deal with the issue of a “refund” at all as it did not deal specifically with s 94.

31 In considering the nature and extent of the council’s obligations as set out in the case law outlined above (at par [18] to [22]), Pain J stated (at 72):

PWC is not conclusive on what the terms of such a trust are and does not preclude the council or the Court deciding that money should be repaid to a contributor in appropriate circumstances. …. PWC certainly emphasises that the holding of property by a council must be for the public benefit, but I do not consider that rules out the theoretical possibility that a refund could be made to the contributor of that money. The circumstances in which the refund will be open are likely to be extremely limited however. Arguably, administering the trust “for the public benefit” will require the Court to ascertain if there are uses to which the money can be put by a council which will fulfil the terms of the trust under s 94(3) and such possibilities ought to be exhausted before a refund should be considered. That is, it is only if there is no possibility that the purpose of the trust can be fulfilled that a refund should be considered.

32 Clearly, there are circumstances where the council could refund the money. Mr Robertson directed the Court’s attention s 111(2)(b) of the Local Government Act 1919, which concerned the application of money held in a statutory trust for a public purpose, and which was relevantly as follows:

…
Provided that the if the moneys have lain in the trust for five years the council may transfer the same to such fund as it may deem proper, subject to repaying the same to any person entitled thereto.

33 Although this subsection has since been repealed it clearly shows that a refund has always been considered to be appropriate in some circumstances, such as those suggested in Frevcourt.

34 In applying the comments of Pain J in Frevcourt, it is clear that the council can refund the money consistently with its obligations under s 94 if it is satisfied that the purpose for which the contributions were collected could not, or need no longer, be fulfilled. It is also clear that with the council having exercised its functions under s 24 of the LG Act and s 54 of the EP&A Act to draft a local environmental plan rezoning the land, it will then be no longer appropriate to apply the contributions towards the purpose of providing access to the subdivision. In another way, in these specific circumstances it is no longer appropriate for the council to retain the contributions.

35 The parties have agreed that, if the contribution is to be repaid, there is no dispute as to whom the contribution should be repaid. Since the moneys are held in a statutory trust for public purposes as distinct from a private trust under the general law of trusts, the council does not need to apply to the Court to vary the terms of the “trust”. It is permissible, therefore, for the council to refund the contributions to the second respondent in accordance with their agreement.

Is the council in breach of an undertaking to the Court?

36 The applicant submits that the terms of the development consents referred to in the orders of Assessor Hanson amount to an undertaking to the Court. This submission must be rejected. The consent was a unilateral act of the Court exercising the functions of the consent authority, not an undertaking made by the council: see Winn v Director General of National Parks and Wildlife [2001] NSWCA 17 per Spigelman CJ at [4]. The council cannot be in breach of an undertaking that it has not made.

Can the applicant claim estoppel?

37 The council has not made any representations to the Court, as the consent was a unilateral act by the Court. In any event, the council’s obligations in this instance do not extend to a duty to apply the monetary contribution towards the construction of a northern access road.

Conclusion and orders

38 The Court accepts the council’s submission that a requirement to construct the northern access road would amount to a fetter on its discretion to change its planning controls in accordance with its current planning for the area. The formal orders of the Court are:

1. The application is dismissed.
2. The question of costs is reserved.
3. The exhibits may be returned.

I hereby certify that the preceding 38 paragraphs are a true copy of the reasons for judgment herein of the Honourable Mr Justice Lloyd.

Associate

Dated: 31 May 2004

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