Frevcourt Pty Ltd v Wingecarribee Shire Council - [2005] NSWCA 107

No judgment structure available for this case.

Reported Decision:
139 LGERA 140

Court of Appeal

CITATION:
FREVCOURT PTY. LIMITED (ACN 003 601 787) . & ANOR.v. WINGECARRIBEE SHIRE COUNCIL [2005] NSWCA 107

HEARING DATE(S):
08/02/05, 09/02/05

JUDGMENT DATE:

6 April 2005

JUDGMENT OF:
Beazley JA at 1; Ipp JA at 129; McColl JA at 130

DECISION:
Appeal dismissed with costs.

CATCHWORDS:
LOCAL GOVERNMENT - development consents - s.94 Environmental Planning and Assessment Act - financial contributions paid by developers to council - whether moneys paid held in trust by council - whether developers entitled to refund of financial contributions not expended by council - LOCAL GOVERNMENT - Development Control Plan - whether schedule of works incorporated into terms of development consent - question of construction whether schedule incorporated - LOCAL GOVERNMENT - Contributions Plan - whether council entitled to abandon works contained in Contributions Plan - discretion of council as to expenditure of financial contributions - money paid under s.94 to be assessed in accordance with Contributions Plan in respect of which payment is required

LEGISLATION CITED:
Environmental Planning and Assessment Act 1979 (NSW)
Environmental Planning and Assessment (Contributions Plans) Amendment Act 1991 (NSW)
Environmental Planning and Assessment Regulation 2000 (NSW)
Local Government Act 1919 (NSW)
Local Government Act 1993 (NSW)

CASES CITED:
Bathurst City Council v PWC Properties Pty Limited [1998] HCA 59; (1998) 195 CLR 566
Denham Pty Limited v Manly Council (1995) 89 LGERA 108
Engadine Area Traffic Action Group Inc v Sutherland Shire Council [2004] NSWLEC 264; (2004) 134 LGERA 75
Frevcourt Pty Ltd v Wingecarribee Shire Council (1993) 80 LGERA 75; [1993] NSWLEC 65
Levadetes & Anor v Hawkesbury Shire Council (1988) 67 LGRA 190
Mirvac Homes (NSW) Pty Limited v Baulkham Hills Shire Council [2000] NSWLEC 199
Parramatta City Council v Peterson (1987) 61 LGRA 286
Rodmac Investments Pty Ltd v Great Lakes Shire Council (NSWLEC, 2 August 1991, unreported, Bignold J)
Toadolla & Co v Dumaresq Shire Council (1992) 78 LGERA 261
Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335
Zhang v Canterbury City Council (2001) 115 LGERA 373

PARTIES:
Frevcourt Pty. Limited (ACN 003 601 787) (First Appellant)
Lynton Kettle Constructions Pty. Ltd (ACN 002 518 569) (Second Appellant)
Wingecarribee Shire Council (Respondent)

FILE NUMBER(S):
CA 40019/04

COUNSEL:
M.G. Craig QC/Dr. S. Berveling (Appellants)
J.A. Ayling SC/Ms. J. Jagot (Respondent)

SOLICITORS:
Hunt & Hunt Lawyers (Appellants)
B. Bilinsky & Co. (Respondent)

LOWER COURT JURISDICTION:
Land & Environment Court

LOWER COURT FILE NUMBER(S):
Pain J

LOWER COURT JUDICIAL OFFICER:
LEC 40176/00

CA 40019/04
LEC 40176/00

BEAZLEY JA
IPP JA
McCOLL JA
6 April 2005

FREVCOURT PTY. LIMITED. (ACN 003 601 787) & ANOR. v. WINGECARRIBEE SHIRE COUNCIL

HEADNOTE

The appellants were required, as a condition of the grant of a series of Development Consents for the subdivision of land at Bowral, to make a financial contribution to the Council for the provision of public amenities and services pursuant to s.94 of the Environmental Planning and Assessment Act 1979 (NSW) (EP & A Act). The Development Consents were granted over a period from 1989 to 2000. The appellants paid the s.94 contributions from time to time as required by Council. They claimed, however, that the Council had failed to build or provide all of the public amenities in respect of which the s.94 contributions were paid. The appellants contended that this failure constituted a breach of s.94 and that they were entitled to a refund, at least on a proportionate basis, of funds which remained unexpended as a result of the Council not carrying out the works.

Significant amendments were made to s.94 by the Environmental Planning and Assessment (Contributions Plans) Amendment Act 1991 (NSW) (the Contributions Plans Amendment Act) so that the appellants claims had to be considered in two distinct periods namely, those that arose in respect of Development Consents granted before 1 July 1993, and those that arose in respect of consents granted after that date.

At the time of granting the pre-1 July 1993 Development Consents, the Council had made a Development Control Plan for East Bowral (the East Bowral DCP) in which it had proposed a programme of roadworks for the area in which the subdivisions were located. Subsequently, as required by the amendments to s.94 and the regulations, it made Contributions Plans in 1993 and 1996 respectively in respect of roadworks in the area.

There was also a separate issue as to whether the appellants had wrongly been required to make s.94 contributions at a rate in excess of that permitted by the legislation.

Held per Beazley JA (Ipp and McColl JJA agreeing):

Re consents issued pre 1 July 1993

1. The programme of works specified in the East Bowral Development Control Plan (the East Bowral DCP) was not, upon a proper construction of the terms of the Development Consents, incorporated into or made a provision of the consents.

2. As those works were not part of the Development Consents so that there was no obligation to carry out works, it could not be said that the works specified in the East Bowral DCP, in any relevant sense, had been abandoned.

3. There was therefore no breach by the Council of s.94 of the EP & A Act.

4. As the Council had not breached the Act the appellants were not entitled to relief under s. 124 of the EP & A Act.

5. The Council had not overcharged the appellants in respect of s.94 contributions required in respect of pre-1993 consents but paid at a later date.

Re consents granted post 1 July 1993

6. The Council had not abandoned works in the Contributions Plans. Rather it had reduced the scope of works and had done so by making a new Contributions Plan as required by the Regulations.

7. Accordingly, there was no breach by the Council of s.94 so that the appellants were not entitled to relief under s.124 of the EP & A Act.

Obiter

8. As a matter of construction, the effect of removing the words “in trust” from s.94 by the amendment made by the Contributions Plan Amendment Act was that s.94 contributions held by a Council were not held on a statutory trust but were held by Council for the public purposes for which they were required.

9. The appellant had not established that there were unexpended s.94 contributions held by the Council.

10. The Council had a discretion as to the expenditure of funds received in respect of Development Consents granted pre-1 July 1993. The extent of the discretion discussed.

11. The discretion in a Council as to the expenditure of s.94 contributions is limited in respect of contributions made in respect of consents granted after 1 July 1993.

12. Except to the extent of the limited discretion, any change in the works and/or the application of moneys specified in a Contributions Plan must be effected by the making of a new Contributions Plan.

13 Doubt expressed as to whether a refund is an available remedy under s.124 for a breach of s.94 of the EP & A Act.

14. Even if a refund is an available form of relief for a breach of s.94 the trial judge was correct in her consideration of the discretionary considerations as to why relief ought not to be granted in this case.

ORDER

Appeal dismissed with costs.

CA 40019/04
LEC 40176/00

BEAZLEY JA
IPP JA
McCOLL JA
6 April 2005

FREVCOURT PTY. LIMITED. (ACN 003 601 787) & ANOR. v. WINGECARRIBEE SHIRE COUNCIL

Judgment

1 BEAZLEY JA: The appellants each owned substantial tracks of land in Bowral, which is within the respondent’s local government area. Between 1989 and 2000 the appellants made a number of applications for development consent for subdivision of their land. Development consent was granted in respect of each application but the respondent (the Council) required, as a condition of consent (the consent condition), that a financial contribution be paid under s.94 of the Environmental Planning and Assessment Act 1979 (the EP & A Act) towards public services and amenities including roads (the s.94 contribution). The s.94 contribution had to be paid before the Council would release the linen plan relating to the subdivision to which the application related.

2 The appellants paid the s.94 contributions as and when required in accordance with the consent condition. Subsequently, the appellants, together with a third applicant, brought proceedings in the Land and Environment Court claiming a refund or repayment of their s.94 contributions or part thereof. The basis upon which they claimed to be entitled to a refund or repayment, as set out in the appellants’ Further Amended Points of Claim, were:

1. that the statutory trust upon which the s.94 contributions were held had been abandoned: paragraph 21.1(6) (the abandonment issue);

2. that the Council had failed within a reasonable time to provide the community service or facility in respect of which the s.94 contributions had been made: paragraph 21.2 (the reasonable time issue);

3 It was an accepted premise in the determination of these issues that, because of amendments made to s.94 brought about by the Environmental Planning and Assessment (Contributions Plans) Amendment Act 1991 (NSW) (the Contributions Plans Amendment Act), the issues had to be considered in two distinct time periods, namely, before and after 1 July 1993.

4 It was also an accepted premise that the applicants in the Land and Environment Court were only entitled to relief if they established a breach of the EP&A Act.

Proceedings in the Land and Environment Court

5 On the hearing in the Land and Environment Court, only the claims relating to the s.94 contributions for roadworks were determined. It was agreed that the trial judge’s legal findings in relation to roadworks would then govern the question of a refund or repayment of the s.94 contributions made in respect of other public amenities. The parties also agreed that the trial judge, Pain J, should determine the matter by answering a series of questions. The overall effect of her Honour’s determination of those questions was that she found that the applicants had failed to prove a breach of s.94. Her Honour ordered that the applicants’ case be dismissed with costs.

Issues on the appeal

6 The essential contention advanced on the appeal was that the moneys received by the Council pursuant to the consent condition - requiring the appellants to make a contribution to roadworks - were impressed with a statutory trust and had to be utilised for the purpose for which they were imposed. The appellants contended that the Council had abandoned some of the roadworks and reduced the scope of other roadworks and had failed to expend fully the s.94 contributions it had received, thereby breaching the provisions of the EP & A Act. They claimed that they were entitled to a refund, in whole or in part, of their s.94 contributions that related to roadworks. On the hearing of the appeal, senior counsel for the appellants indicated that the appellants sought a refund of a proportion only of the moneys paid. The appellants also claimed an amount said to represent an overpayment of what the Council was entitled to require by way of s.94 contributions.

7 The appellants’ claim for a refund raises a number of specific issues for consideration. It is also convenient, in dealing with those matters, to immediately differentiate between the considerations that are relevant to development consents granted pre-1 July 1993 and those that are relevant to development consents granted post-1 July 1993.

Pre-1 July 1993 Issues

8 The following matters arise for consideration in relation to the development consents issued prior to 1 July 1993.

(1) The nature of the trust, if any, upon which a consent authority (in this case the Council) holds money received by way of s.94 contributions.

(2) Whether the schedule of works contained in the Council’s Development Control Plan for East Bowral (the East Bowral DCP) was incorporated into and formed part of the consent condition.

(a) was required to carry out the full scope of works contained in the East Bowral DCP and expend the s.94 contributions on those works; or

(b) had any discretion as to the works be carried out in order to comply with its obligations, and if so, the nature and extent of that discretion.

(4) Whether the appellants are entitled to a refund of their s.94 contributions or part thereof if works were not carried out. This issue itself raises two questions, referred to at (7) below.

(5) Whether the Council assessed the contributions on the basis of works contained in a contributions plan that was not in force at the date of the development consent (the overpayment issue).

Post-1 July 1993 Issues

9 The following matters are relevant in respect to the development consents issued post-1 July 1993: (continuing the numbering from above)

(6)(a) Whether the Council is entitled to abandon works specified in a Contributions Plan.

(b) Whether the Council in fact abandoned such works.

(a) whether a refund is an available form of relief under s.124 of the EP&A Act; and

(b) whether there was, in any event, a surplus out of which a refund could be paid.

(8) Whether the Council was entitled to calculate the amount of the s.94 contribution on the basis of amenities proposed at a later point of time (in this case, being amenities proposed by the Council in a Contributions Plan made after the grant of development consent (the overpayment issue).

(9) Whether, even if the appellants established a breach of s.94, the Court ought, as a matter of discretion, to grant relief.

10 The question whether a refund is an available form of relief arises as an issue in respect of both pre- and post-1 July 1993 Development Consents and I will deal with that as a single issue.

DEVELOPMENT CONSENTS GRANTED PRIOR TO 1 JULY 1993
Factual background

11 The land relevant to these proceedings was included in land that was re-zoned in 1986 to permit residential development to accommodate the anticipated expansion of Bowral. The re-zoning was effected pursuant to the Wingecarribee Local Environment Plan No. 100 (LEP 100). At the same time that the land was rezoned, the Council adopted the East Bowral DCP.

12 A Development Control Plan is an environmental planning instrument that a Council may make if it considers it desirable to make more detailed planning provisions than are contained in a Local Environmental Plan in respect of particular land: s.72 of the EP & A Act. A Development Consent Plan is not binding in the sense that a council is not bound to carry out the works specified in such a plan. However, a council, when determining whether to give consent to a Development Application, must take into account the provisions of any Development Control Plan that relates to the land for which development consent is sought: s.79C(1)(a)(iii) (formerly s.90(1)(a)(iv)) of the EP & A Act. In doing so, a council cannot pay mere lip service to a Development Control Plan. Rather, it is to be treated as a “fundamental element” or “focal point” of the decision making process: Zhang v. Canterbury City Council (2001) 115 LGERA 373 at 387 per Spigelman CJ.

13 In the East Bowral DCP, the Council stated at cl.6(viii) that it had identified that development within the East Bowral area would generate the need for a number of essential amenities including roads. It provided that “a contribution towards the provision of [such] services is required with new development”. It contained details of roadworks proposed to be undertaken as well as an estimate of the cost of those works.

14 In the Development Consents granted to the appellants prior to 1 July 1993, the Council imposed a condition in respect of roadworks. In the Development Consents granted to the appellant, Frevcourt, the consent condition imposed was:

“The payment of a monetary contribution towards the improvement of local roads to which the subdivision has its frontage and having the benefit of local access thereto, it being noted that the current contribution is …”.

15 The consent condition in the Kettle Development Consents provided:

“The payment of a monetary contribution for the improvement of Old South Road to which the subdivision has its frontage, it being noted that the current contribution is …”.

16 In each case, the Development Consent further stated:

“The exact amount of contribution will be calculated at the rate applicable at the time of release of the linen plan of subdivision.”

Statutory Scheme: Section 94

17 The conditions requiring the payment of contributions were imposed pursuant to s.94(3) of the EP& A Act. Section 94 is currently contained within Pt.4 Div. 6 of the E P & A Act. For the purposes of this case the section has had three versions. The first version was in operation until 14 February 1992. I will refer to s.94 up until that date as s.94 in its original form. It provided:

“(1) Subject to sub-section (2), where a consent authority 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 and public services within the area, the consent authority may grant consent to that application subject to a condition requiring -

…

(b) the payment of a monetary contribution.

(2) A condition referred to in sub-section (1) shall be imposed only -

…

(b) to require a reasonable dedication or contribution for the provision, extension or augmentation of the public amenities and public services mentioned in that sub-section.

…

in trust

18 On 14 February 1992 an amendment to s.94(3) took effect pursuant to the Contributions Plans Amendment Act. I will refer to that amendment as the 1992 amendment so as to reflect its effective date of operation.

Section 94: the 1992 amendment

19 Pursuant to the 1992 amendment the words “in trust” were deleted from s.94(3) and the words “and any additional amount earned from its investment” inserted so that the section then read:

“The consent authority shall 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.”

20 The Contributions Plans Amendment Act effected another change to the contributions scheme so as to require greater connectivity between s.94 contributions and the works to be carried out. That change came into operation on 1 July 1993 and will be considered below in relation to the 1993 consents. I will refer to that amendment as the 1993 amendment.

21 Section 94 in both its original form and 1992 amendment form governed the contribution scheme up until 1 July 1993 and it is against that statutory background that the specific questions raised by the appeal fall for consideration.

Entitlement to relief under E P & A Act.

22 The appellants’ entitlement to relief, in this case the claimed refund and the repayment, is governed by the provisions of Pt 6 Div 3 of the EP&A Act and, in particular, ss.122-124.

23 Section 123(1) provides that "any person may bring proceedings in the Court for an order to remedy or restrain a breach” of the Act. Section 122(b)(iii) provides that a reference to the Act includes a reference to a consent granted under the Act, including “a condition subject to which a consent is granted.”

24 Section 124 provides:

Orders of the Court

(1) Where the Court is satisfied that a breach of this Act has been committed or that a breach of this Act will, unless restrained by order of the Court, be committed, it may make such order as it thinks fit to remedy or restrain the breach.

(2) …

(3) …”

The nature of the trust, if any, upon which s.94 contributions are held

(a) Position under s.94 in its original form.

25 The appellants’ primary contention was that s.94 contributions paid to the Council were held on a statutory trust which carried with it an obligation to repay moneys if the purpose for which the moneys were paid was not fulfilled. This submission was based upon the express use of the term “in trust” in s.94(3) in its original form, and upon judicial endorsement of the statutory trust in a number of decisions of the Land and Environment Court: see in particular, Levadetes & Anor. v. Hawkesbury Shire Council (1988) 67 LGRA 190 and Toadolla & Co. v. Dumaresq Shire Council (1992) 78 LGERA 261.

26 In Levadetes, the Court was concerned with a condition of a development consent whereby Council had required the applicant to make a s.94 contribution for car parking facilities. The applicant brought proceedings seeking an order that the council provide the facilities, the Council having failed to do so over a 3 year period since the grant of development consent. Holland J said at 195:

in trust

27 Holland J pointed out that, in the case before him, the locality where the development was to be undertaken was small and the range of possibilities to achieve the object of the trust, namely the provision of car parking facilities, were very limited. This was to be contrasted with the usual case where a contribution for car parking facilities was imposed. His Honour said that usually (in the pre-1 July 1993 situation), a council had a general fund for the provision of parking from which the developers of individual sites would benefit by being relieved of the need to provide parking themselves. See also Parramatta City Council v. Peterson (1987) 61 LGRA 286 at 296, 297. However, his Honour observed that the specificity of the condition imposed in the Development Consent with which he was concerned was of particular relevance in determining what the Council could, and was required to do, under the statutory trust. His Honour adjourned the proceedings to permit the Council time in which to consider and fulfil its specific obligation.

28 In Toadolla, Pearlman J also accepted that s.94(3) imposed a statutory trust. She observed, however, that the statutory trust which arose under the section was to be distinguished from a trust as between private citizens.

(b) Position under 1992 amendment

29 Pursuant to the 1992 amendments the words “in trust” were removed from s.94(3). Pain J at [47] considered that the amendment did not alter the basis upon which a council held moneys received by way of s.94 contributions and that such moneys were still held upon a statutory trust: see also Engadine Area Traffic Action Group Inc v Sutherland Shire Council [2004] NSWLEC 264; (2004) 134 LGERA 75 per Lloyd J at 82-83.

30 In this case, Pain J noted that the Council agreed with the notion that after the 1992 amendment, moneys contributed under s.94(3) continued to constitute a statutory trust. In argument before this Court, senior counsel for the Council drew the Court’s attention to the Explanatory Memorandum and the Second Reading Speech relating to the amendment. The Explanatory Memorandum stated (at p.2) that: “The amendments will remove the current requirement for each contribution to be held in trust (so that councils may keep all those contributions in a common reserve until they are used) and expressly require any interest from the investment of each contribution be used for the same purpose as the contribution”.

31 In the Second Reading Speech, the Minister emphasised that the deletion of the requirement that the moneys be held “in trust” would permit councils to streamline their financial arrangements (p.6143). It is apparent from the Minister’s comment that he considered that councils were acting inappropriately in failing to keep s.94 contributions in a separate fund. This was remedied by the new accounting regulations introduced at the same time which provided that funds did not have to be kept separately but had to be specifically accounted for. This is discussed further below.

32 It was unclear from senior counsel’s submission, particularly given the reference to the Explanatory Memorandum and Second Reading Speeches, whether the Council continued to accept that moneys received by way of s.94 contributions were held on a statutory trust despite the 1992 amendments. Counsel’s ambivalence on the matter, if that was the case, is understandable. A statutory trust is a somewhat unusual legal creature, although it has judicial recognition. I have already referred to the statements in Levadetes and Toadolla that funds received under s.94 in its original form were held on statutory trust. The concept was also considered by the High Court in Bathurst City Council v. PWC Properties Pty. Limited [1998] HCA 59; (1998) 195 CLR 566.

33 In that case, the Court was concerned with property that had been conveyed to the Bathurst City Council under s.526 of the Local Government Act 1919 “for any charitable or public purpose”. Under s.526(b) a council that held property for a charitable or public purpose was required to “act in the administration of such property for the purposes and according to the trusts for which the same may have been conveyed …”. The 1919 Act was replaced by the Local Government Act 1993. Clause 6(2)(b) of Schedule 7 of the 1993 Act relates to land vested in or under the control of the Council that was subject to a trust for a public purpose.

34 The question before the Court was whether certain land vested in the Bathurst City Council was subject to such a trust. In determining that question, the Court at [67] considered the nature of the trust referred to in cl.6(2)(b) in the following terms:

“The term ‘trust’ in [the 1993 Act] 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 the estate in fee simple. The trust was ‘not a trust for persons but for statutory purposes’: (references omitted).”

35 The High Court noted at [67] that, although there was no owner of the land with standing in a court of equity to enforce observance by the Council of the statutory provisions, it was within the competence of the Attorney-General to seek to restrain action incompatible with “the due exercise of the powers of the [C]ouncil or the due discharge of its duties”.

36 It is apparent that the notion of s.94 contributions being held on a statutory trust as explained in Levadetes and Toadolla is consistent with what the High Court said in PWC Properties. Levadetes and Toadolla related to contributions required to be paid under s.94(3) in its original form. PWC Properties related to a statutory trust that arose in different circumstances altogether. What was common in the consideration of the statutory trust in each case, however, was the public purpose for which moneys were received (in Levadetes and Toadolla) or upon which land was held (in PWC Properties).

37 The removal of the words “in trust” by the legislature in the 1992 amendment, cannot, however, be ignored. In my opinion the legislature must have intended that the removal of the words have a substantive effect. The only possible effect was that such moneys were not held ”in trust”. Otherwise, there was no purpose in the amendment. This is consistent with the statements made by the Minister in the Second Reading Speech and with the Second Reading Speech. I should add however, that I do not consider it necessary to resort to those documents as aids to interpretation. The amendment is clear on its face. There is no doubt however that, even with the removal of the words “in trust” from s.94(3), contributions paid under the section must be held and applied by Council for a public purpose as required by the statute.

Was the schedule of works contained in the East Bowral DCP incorporated into the consent condition?

38 In relation to the pre-1 July 1993 consents, the question for consideration is what were the public purposes for which the funds were held. The appellants submitted that the public purpose was co-extensive with the schedule of works specified in the East Bowral DCP and that the Council was obliged to carry out the entire complement of those works. The Council submitted that it was obliged to perform works that complied with the relevant consent condition, and that in any event, it had a discretion as to works that could be undertaken.

39 Pain J, at [38], held that "there was no obligation on the Council” under s.94 to impose a condition requiring contributions in such a way as to be consistent with the East Bowral DCP nor to expend funds paid to it in the manner anticipated in that DCP. Rather, her Honour considered that the development consent was a point of reference for determining the purpose for which the payment was required. Her Honour added, at [39], that ss.94(1) and (3) did “not require the money to be spent in accordance with a predetermined programme provided s.94(3) was complied with”.

40 There would be compliance with s.94(3), on her Honour’s approach (see [39]), if, in the terms of the section, the moneys had been utilised “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” generated by the development . In this case, given the purpose for which the s.94 contributions were required, that meant that the moneys were to be used for the roadworks described generally in the relevant consent condition.

41 Her Honour concluded at [44]:

“For the [appellants] to be successful in their claim they would have to show that the roadworks on which the s.94 contributions were spent by Council for the consents granted before 1 July 1993 were not spent ‘towards providing public amenities or public services … as will meet the increased demand …’ within a reasonable time. The evidence relied on by [the appellants] has focussed exclusively on a failure to apply the works schedule in the [East Bowral] DCP. That evidence does not otherwise address the issue of whether s.94(3) has been complied with in spending s.94 contributions. There is no evidence before me that the funds spent by Council were not used to satisfy increased demand for services, or were not spent in accordance with the development consent conditions in accordance with s.94(3).”

42 Although her Honour’s conclusion is stated in the general words of s.94(3), I understand, from the context in which this paragraph appears in the judgment, that the services to which she was referring were works in the locations specified in the relevant consent conditions.

43 The appellants challenge this finding. They contend that the schedule of works specified in the East Bowral DCP was implied in or was incorporated as part of the consent condition in the pre-1 July 1993 development consents. It was submitted that this followed from the provisions of the development consents and, in particular, from cl. 5 in Frevcourt’s consents (cl. 4 in Kettle’s consents) which provided:

Payment to Council

This clause has been applied in accordance with Council’s adopted policy

44 The appellants further submitted that the incorporation of the specific provisions of the East Bowral DCP relating to roadworks also followed from the Council’s obligation under s.79C(1)(a)(iii) to have regard to the provisions of a Development Control Plan for the purpose of giving development consent and from the fact that the East Bowral DCP was the basis upon which the Council had calculated the amount of the s.94 contributions.

45 The Council resisted this submission. It contended that although the East Bowral DCP provided a basis upon which the Council could require a s.94 contribution and calculate the amount thereof, the Council was not obliged to carry out the works specified in the East Bowral DCP, or, at least, was not required to carry out all of those works. It followed, on the Council’s submission, that the question whether the works specified in the East Bowral DCP had been carried out was not determinative of whether there had been a breach of s.94, which the appellants were required to establish in order to found her entitlement to relief.

46 There is no specific identification in the development consents of the Council’s “adopted policy ”. However, a schedule of works is not easily described as a policy. On the other hand, an intention, proposal or decision (as the case may be) to require s.94 contributions to assist the financing of infrastructure is appropriately so described. Such an intention, proposal or decision is to be found in cl 6(viii) of the East Bowral DCP:

“A contribution towards the provision of [essential services] including roads is required with new development.”

47 Accordingly, on the natural reading of both the Development Consents and the East Bowral DCP, I am of the opinion that the reference to “adopted policy” is a reference to Council’s intention, proposal or decision, stated in cl.6(viii). But in any event, to incorporate or imply a schedule of works detailed in a Development Control Plan into a development consent is not consistent with the purpose and function of a development control plan. Further the East Bowral DCP itself specifically states that “the purpose of the plan is to give detailed guidance to people wishing to develop within the East Bowral area and to indicate Council’s policies towards that development.” Something which is of guidance does not usually take on an obligatory or mandatory status, unless there is some clear statement to that effect. Further, the schedule of roadworks in the East Bowral DCP is stated to be a schedule of “proposed roadworks”.

48 The relevance of a Control Plan to a Development Application is at the time of the determination of the application. Although the provisions of a Development Control Plan must be taken into account in a serious, fundamental way in determining whether consent should be given, its terms are not, without more, thereby incorporated into the development consent. There is nothing in the E P & A Act that requires a Council to carry out works specified in a Development Control Plan. Nor does a Development Consent impose obligations on council to carry out work. It follows, in my opinion, that a Development Control Plan does not control the determination of the question whether a Council has breached any obligation it has under the E P & A Act. Put another way, unless there was an unambiguous provision or necessary implication to that effect, the provision of a Development Control Plan would not be implied or incorporated into a Development Consent.

49 The appellants’ submission also overlooks the comments of Pearlman J in Toadolla, and of Bignold J in Rodmac Investments Pty. Ltd. v. Great Lakes Shire Council (NSWLEC, 2 August 1991, unreported), to which I refer below, namely, that the Council retains a discretion in relation to the administration of the funds comprising the s.94 contributions. To deny the Council any flexibility in relation to the works to be carried out would be an unreasonable and unwarranted fetter upon it, even recognising the statutory purpose it has in respect of those contributions. An obvious example of why a Council may determine not to carry out some of the works specified in a Development Control Plan is that the cost of proposed works might have increased to such an extent that the Council no longer has the funds to undertake all of the work.

50 It follows from what I have said that the appellants’ argument, that the roadworks referred to in the East Bowral DCP were works that had to be undertaken in their entirety in order for the Council to comply with the terms upon which it held the s.94 contributions, must be rejected. Rather, as the trial judge found, its obligation was to utilise moneys in the terms of the consent, namely, “towards the improvement of local roads to which the subdivision has its frontage or having the benefit of local access thereto” (emphasis added), in the case of Frevcourt; and “for the improvement of Old South Road” in the case of Kettle.

Does the Council have a discretion as to the works to be carried out?

51 The Land and Environment Court has consistently held that, in respect of pre-1 July 1993 consents, a council has a discretion as to the application of s.94 contributions. In Levadetes, Holland J stated (at p.195) that the Council must deal with a s.94 contribution for the purposes for which the contribution was required. However, it is apparent from his Honour’s resolution of the proceedings (see discussion at [27] above), and it has been expressly stated in other judgments of the Land and Environment Court, that the council retains a discretion in the manner in which such moneys may be applied. In Rodmac, Bignold J (at p.8), whilst accepting that s.94 stipulated the nature and extent of the trust duties to be fulfilled, also considered that the consent authority had an administrative discretion in relation to the manner in which the purpose of the trust could be fulfilled. In Toadolla, Pearlman J. pointed out at p.267, that the s.94 statutory trust related to monetary contributions received by a council to discharge public administrative functions and that the council “must have a discretion as to the method of implementing the trust in a workable and manageable manner”. I pause only to note that Levadetes, Rodmac and Toadolla were all pre-1992 amendment cases and thus the reference to “statutory trust” is correct.

52 In Denham Pty. Limited v. Manly Council (1995) 89 LGERA 108 at 114-115, Talbot J said that a council has a wide discretion in respect of the application of s.94 contributions:

“The Council must for practical reasons have an element of discretion in regard to the way in which funds collected are applied. Although the discretions are wide they must nevertheless be exercised properly and conscientiously. Provided the funds are applied for the general purpose for which they were collected, the purpose of the requirement for the making of the contributions can be fulfilled.”

53 I agree that in respect of pre-1 July 1993 consents, a council has a discretion as to the works undertaken when expending s.94 contributions, provided that the works are consistent with the statutory purpose and the conditions of development consent. Within those parameters, the question whether a council, in a given case, had conformed to its statutory obligations is a question of fact, having regard to the terms and conditions of the Development Consent.

54 The existence of a discretion in a council as to the type and extent of work that may be undertaken with s.94 contributions also makes it unlikely that the schedule of works specified in a Development Control Plan would be implied into a Development Consent.

55 The appellants contended that in this case, the pre-1 July 1993 contributions were required to be applied to the carrying out of the works specified in the East Bowral DCP. They alleged that a comparison of the schedule of works in the DCP and later schedules contained in the 1993 and 1996 Contributions Plans, demonstrated that some of those works had not been carried out. As contributors of money paid for these specific purposes, they submitted, that they were entitled to a refund of the money, or at least a refund of part of the moneys. In Kettle’s case, the claim was limited to the failure to carry out all of the work specified for Old South Road.

56 For the reasons already given at [50] above a comparison of the schedule of works in the East Bowral DCP and those in the 1993 Contributions Plan, could not establish a breach of s.94. But in any event, that comparison demonstrated that although not all the works specified in the East Bowral DCP had been or were going to be carried out, substantial work fulfilling the description of the condition had either been completed or was scheduled to be done. In those circumstances, unless it could be argued that the Council had a continuing obligation to undertake works because there remained unexpended funds, there was no breach so as to entitle the appellants to relief. But that was not the basis of the appellants’ claim. The pre-July 1993 claim was based on a failure to carry out all of the work specified in the DCP. The only qualification was that the appellants submitted, alternatively, that the Council had not carried out the work in a reasonable time. However, if there was no obligation to carry out all of the works, there is no basis to claim that the works were not carried out in a reasonable time.

57 It follows that as there was no breach of a provision of the Act the appellants have not established an entitlement to relief in respect of the pre-1993 consents.

The overpayment issue

58 The appellants contended that they are entitled to a repayment of a proportion of the moneys paid by way of s.94 contributions because, in respect of a number of consents, the amount levied was assessed on the basis of the programme of works specified in the 1993 Contributions Plan, and not upon the programme of works contained in the DCP.

59 The amount claimed under this head was $4,882.00 and represented an overpayment of $122.00 per lot in respect of 29 subdivisional lots, and $56.00 in respect of a further 24 lots.

60 The appellants accepted that the Council was entitled to vary the amount of s.94 contributions from time to time up until the time of payment. That concession was necessary having regard to the terms of the Development Consents, which provided that the final amount of the s.94 contribution would be calculated at the rate applicable at the time of payment. However, the appellants contended that any increase in the amount could only be calculated having regard to the works specified in the Development Control Plan, whereas the Council had calculated the rate based upon the programme for works specified in the 1993 Contributions Plan.

61 The alleged overpayment of $122.00 was calculated on the basis that the last known calculation prior to the making of the 1993 Contributions Plan was $2,080.00 for the year 1992, whereas the amount upon which the s.94 contributions were assessed was $2,202.20, a figure that was to be found as the rate of contribution in the first year of operation of the 1993 Contributions Plan. The figure of $56.00 per lot was the difference between the amount per allotment that had been specified in the Land and Environment Court in Frevcourt Pty. Ltd v. Wingecarribee Shire Council (1993) 80 LGERA 75; [1993] NSWLEC 65. and the sum of $2,202.00 appearing in the 1993 Contributions Plans.

62 The trial judge determined this issue on the basis that the appellants had relied in support of their claim on the decision in Mirvac Homes (NSW) Pty. Limited v. Baulkham Hills Shire Council [2000] NSWLEC 199. That case, however, related to the interpretation of certain conditions of post-1 July development consents and their potential invalidity. Her Honour concluded at [119] that as the appellants had not sought to have any of the conditions of consent declared invalid, their argument on the overpayment issue was not maintainable.

63 With respect to her Honour, that was an oversimplification of the appellants’ argument. Their case was that as a matter of principle, a council is only entitled to assess the amount of a s.94 contribution on the basis of the work to which it related. It could not impose a contribution based upon a later-determined schedule of works - in this case, upon the rate of contribution applicable to the 1993 Contributions Plan.

64 Notwithstanding that I consider her Honour to have erred in her approach to this issue, there are a number of difficulties with the appellants’ claim.

65 I have already expressed the view that the Council was not tied to the schedule of works in the East Bowral DCP. What happened, however, was that there was a continuum of the works programme from that indicated in the East Bowral DCP to that specified in the 1993 Contributions Plan. Under the statutory Contributions Plans procedure, introduced by the 1993 amendments, the Council had specific recording and accounting obligations, including details as to how any increase in contributions was to be assessed. There was no such requirement in respect of the pre-1 July 1993 position.

66 It could not be said, however, that as a matter of law the statutory regime introduced by the 1993 amendment had the effect of freezing the contribution rate as at 1 July 1993. The Council was still entitled to assess the amount of the contribution as at the time it was required to be paid. As the works for which the s.94 contributions were required in respect of the pre-1 July 1993 consents in effect became the works specified in the 1993 Contributions Plan, it was not inappropriate for the Council to calculate the contributions payable in respect of consents granted before 1 July 1993 at the same rate as, or that assessed under, that Plan.

67 I should add that Senior Counsel for the Council, in his submissions, argued that there was a mere coincidence of the amount calculated for the pre-1 July 1993 consents (that are subject of the overpayment argument) and the amount assessed under the 1993 Contributions Plan. In a sense, this argument was predicated on an onus issue, namely, that the appellants had failed to establish the basis upon which the contributions had been calculated and, therefore, had failed to prove the Council had calculated the contributions in accordance with the 1993 Contributions Plan. For myself, I consider that the identity of the amounts is more than coincidence. However, for the reasons I have given, I consider this claim should fail.

DEVELOPMENT CONSENTS GRANTED AFTER 1 JULY 1993

68 The development consents granted after 1 July 1993 were affected by the introduction of a scheme for the making of Contributions Plans and the requirement that any condition requiring a monetary contribution under s.94 could only be imposed if the contribution was determined in accordance with a Contributions Plan. A new section s.94AB (subsequently s.94B) was introduced under the E P & A Act providing for the making of such plans. There were subsequently a number of amendments to s.94 and to the Contributions Plans provisions that are not presently relevant, but which also resulted in changes to the numbering of the sections and sub-sections. It is convenient to adopt the numbering of the sections as it finally appears in the legislation.

Section 94: The 1993 amendment

69 The 1993 amendment provided, relevantly:

94

….

(7) When granting consent to a development application made on or after 1 July 1993 … a council may impose a condition referred to in this section only if it is of a kind allowed by, and is determined in accordance with, a contributions plan approved under s. 94AB.

(8) A contribution of a kind allowed by a contributions plan may be disallowed or amended by the Court on appeal because it is unreasonable, even if it was determined in accordance with the plan.”

70 Section 94B (previously s.94AB) provides:

94B Contributions plans - making

(1) A council may, subject to and in accordance with the regulations, prepare and approve a contributions plan for the purpose of imposing conditions referred to in this Division.

(2) It is to be presumed, in the absence of evidence to the contrary, that all conditions and preliminary steps precedent to the making of a contributions plan have been complied with and performed.”

The Regulations

71 Amendments were made to the Environmental Planning and Assessment Regulations at the same time. These amendments introduced specific provisions relating to Contributions Plans: see Part 4A. The regulations not only governed the making of a Contributions Plan, they effected significant changes to the manner in which a Council was required to deal with s.94 contributions. Of particular relevance to the issues in this case are the regulations which in their present form are numbered 27-35 (and were previously regulations 41D-41M).

72 Regulation 27 (previously Reg. 41F) stipulates that a contributions plan must include specified particulars. Relevantly, a plan must include the contribution rates for different types of development, as specified in a schedule to the plan: Reg. 27(1)(e). A plan must also include a works schedule of the specific public amenities and services proposed to be provided by the council, together with an estimate of their cost and staging: Reg. 27(1)(g).

73 Regulation 32 (previously Reg. 41K) provides that a Contributions Plan may be amended or repealed by a subsequent Contributions Plan: Regs. 32(1) and (2)(a); or repealed by Public Notice: Reg. 32(2)(b). The Regulations do not indicate whether a Plan can only be repealed prior to its implementation or whether it must be repealed in its entirety.

74 The regulations also impose specific accounting obligations on a council in respect of s.94 contributions. Regulation 34 (previously Reg. 41M) provides that a council must maintain a contributions register (subreg 1), containing the following details: “particulars sufficient to identify each development consent for which any such condition has been imposed, (sub-reg 2(a)); and “the nature and extent of the section 94 contribution required by any such condition for each public amenity or service” (sub-reg 2(b)).

75 The regulations do not require a council to keep s s.94 contributions in a separate fund. However, they must be accounted for so as to distinguish them “from all other money held by council”: Reg. 35(1).

76 Regulation 35(2) (previously Reg. 41L(2)) provides that the accounting records for a Contributions Plan must indicate the various kinds of public amenities or services for which the expenditure was authorised and the monetary contributions received under the plan “by reference to the various kinds of public amenities or services for which they have been received” (Reg. 35(2)(b)). Regulation 35(2)(c) also requires that a record be kept of the amount spent in accordance with the plan by reference to the specific public amenity or service for which they had been spent.

77 Regulation 35(3) (previously Reg. 41L(3)) provides for the disclosure of certain information in respect of Contributions Plans in a council’s annual financial report as follows:

“(3) A council must disclose the following information for each contributions plan in the notes to its annual financial report:

(a) the opening and closing balances of money held by the council for the accounting period covered by the report,

(b) the total amounts received by way of monetary section 94 contributions during that period, by reference to the various kinds of public amenities or services for which they have been received,

(c) the total amounts spent in accordance with the contributions plan during that period, by reference to the various kinds of public amenities or services for which they have been spent,

(d) the outstanding obligations of the council to provide public amenities or services, by reference to the various kinds of public amenities or services for which monetary section 94 contributions have been received during that or any previous accounting period.”

Factual background to post-1 July 1993 Development Consents

78 Upon the commencement of the 1993 amendment, the Council made a Contributions Plan in respect of East Bowral to take effect as at 1 July 1993 (the 1993 Contributions Plan). There was included in that Plan a Schedule of Works in relation to “local roads to which the subdivision had its frontage, and having the benefits of local access thereto”. It is apparent that some of the works specified in the 1993 Contributions Plan related to the same roads for which proposals had been made in the East Bowral DCP. The s.94 contribution assessed was $2,080.00 per lot.

79 In 1996, the Council made a further Contributions Plan for East Bowral which became effective on 4 September 1996 (the 1996 Contributions Plan). The 1996 Contributions Plan set out the background to the development of East Bowral and explained that anticipated residential development in that area was less, by almost 20%, than that which had been estimated for the purposes of the 1993 Contributions Plan. It was also observed that the estimate of costs contained in the 1993 Contributions Plan had not proved to be accurate. It was apparent that the cost of some of the works had increased. The Council proposed, therefore, the making of the 1996 Contributions Plan so as to:

“’Downsize’ the existing work schedules to reflect a smaller ‘user population’ and apportion revised costs across the revised total allotment yield”

80 The total cost of the roadworks proposed under the 1996 Contributions Plan was $3,060,000 of which $2,673,000 was to be funded by s.94 contributions at a rate of $2,060.00 per allotment. This is to be contrasted with the cost of the roadworks proposed in the 1993 Contributions Plan of $4,606,375.00, of which $3,120,513.00 was to be funded from s.94 contributions. The levy was $2,202.20 per allotment.

81 Four development consents were granted to the appellants subsequent to the 1993 legislative amendments and each contained a condition in the following terms:

“This clause has been applied in accordance with Council’s adopted policy … towards the improvement of local roads to which the subdivision has its frontage, and having the benefit of local access thereto.”

Issues in relation to post 1 July 1993 Consents

82 The central issue in respect of the post-1 July 1993 consents was whether the works had been abandoned and whether the appellants were thereby entitled to a refund. The effect of the appellants’ argument was that this question was resolved by a straight line equation: if works were abandoned then contributors to the fund for those works were entitled, on a proportional basis, to a refund of any surplus in the fund.

Is a Council is entitled to abandon works specified in a Contributions Plan?

83 The appellants contended that since the introduction of the 1993 amendment, a Council was not entitled to abandon works specified in a Contributions Plan. They submitted that the discretion (if there was one) to vary and substitute works that had been available to a Council prior to the amendment, no longer existed and that any variation or substitution of works had to be effected by a new Contributions Plan. Further, any variation specified in a new Contributions Plan had to relate to the same types of works that were specified in the Contributions Plan for which the s.94 contributions were collected. Alternatively, if there remained a discretion, so that changes could be effected without the necessity of making a new Plan, the discretion was limited to a change in works that had a clear link with the s.94 purpose specified in the Plan. Subject to one matter to which I refer below, the appellants contended that in either case, a council could not abandon works that were specified in a Contributions Plan.

84 Her Honour appears to have dealt with this issue as part of her consideration of the question: “Is the Council obliged to spend s.94 contributions on the same basis for which [they] are collected?” (see Question 6 at [65]) Her Honour held that there had to be a clear link between the purposes for which s.94 moneys were collected and their expenditure and that there was less discretion in the way in which funds could be spent than was the case under the pre-1 July 1993 regime. In her Honour’s view, however, there were circumstances where a Council might not undertake the works specified in a Contributions Plan, but not be in breach of the section. One example, and this was the qualification in the appellants’ submission referred to above, was where the s. 94 funds had been exhausted ([69] of Judgment).

85 Her Honour considered there were other circumstances where a Council might not be in breach of s.94. For example, where there was less demand for the services so that the works were not proceeded with ([70] of Judgment). In that case, the question of whether there was breach would depend, in her Honour’s view on whether the evidence established that works had been “abandoned” and whether there were surplus funds. The appellants submitted that in this case, the evidence established both.

86 A third example postulated by her Honour ([71] of Judgment) was where works had been substituted so as to provide the same type of amenities for which contributions had been required for example, the substitution of netball courts for basketball courts. The question whether there would be a breach on this example would depend upon the wording of the condition of the development consent and the wording in the Contributions Plan itself. The appellants did not fully embrace this proposition, but pointed out that, in any event, it was not relevant to their case, which involved a reduction in the scope of a single amenity, namely roadworks, and not a substitution of one type of amenity for another.

87 On the appeal, the question whether a council is entitled to abandon works specified in a Contributions Plan and, if so, the circumstances in which it is entitled to do so, arose more directly than her Honour’s consideration of the issue raised by Question 6. It is necessary therefore to consider the statutory regime under the 1993 amendments. As has already been explained that regime allows for the making of a Contributions Plan. In that sense it is permissive. The legislation is prescriptive to the extent that, if a council wishes to obtain contributions for the provision of amenities, it must make a Contributions Plan. If a Contributions Plan is made, a council must comply with the regulations. These regulations are directed to providing a greater degree of accountability by councils in respect of s.94 contributions. Thus, under the regulations, a council has to specify the amenities required, the cost of the amenities, the amount of contributions to be extracted from the developer(s) and has to record and account for the expenditure of the contributions on those amenities. The overall thrust of the Contributions Plan scheme as her Honour found, is therefore, that a council must expend s.94 contributions on the amenities for which the contributions were required. This is subject to any amendment of the Contributions Plan.

88 As has already been explained, the regulations permit for the amendment or repeal of a Plan. The appellants contend that if a Plan is amended or repealed, then s.94 contributions collected under a particular plan cannot be “carried across” into any amended or substituted plan. They also contend that a Council must complete all the works specified in a Plan, except in the limited circumstances discussed above, and if a Council does not, it must refund any money left in the fund comprising the s.94 contributions. This raises the question of the extent of the right to amend a Contributions Plan.

89 There is no restriction in the Act or regulations as to the type or extent of amendments that may be made. Nor do the regulations specify whether a plan can be repealed in whole or part, and it is not necessary to determine that question. However, the status of any s.94 contributions in the case of a total repeal raises, perhaps more starkly, the question of a contributor’s right to a refund, a matter which is explored more fully below. However, for present purposes, it follows from the ability to repeal a Contributions Plan, either in whole or in part, that a Council is entitled not to proceed with work specified in a Plan.

90 Although there is no restriction as to the type or extent of an amendment, the regulations regulate how the amendment must be made or, if applicable, how the repeal is effected. In the case of an amendment, that must be by a new Contributions Plan. Given the absence of any restriction in the type or extent of amendments that may be made, I am of the opinion that a council can amend a plan so as to alter both the extent and type of public amenity or service that is reasonably required by the development and apply existing s.94 funds to those amenities or services.

91 In my opinion, and it follows from what I have said, a council’s entitlement to amend a Contributions Plan encompasses a right to reduce the scope of works specified in a Contributions Plan, even if this means that some works stipulated in the original Contributions Plan are no longer to be carried out. I should add that as this case is concerned with a reduction in the scope of roadworks, and not with the substitution of different works, it is not necessary to reach a final conclusion on whether a Council can amend the type of amenity or service so as to substitute different work and use existing s.94 contributions for that different purpose. I would further add that if the right to amend did not encompass the ability to eliminate or abandon (or indeed to substitute different amenities), a Council arguably would be limited to being able to make minimal changes of the detail of the work originally proposed. Amendments of that type would, in my view, be variations of a type in respect of which a council has a continuing discretion in any event. In this regard, I agree with the trial judge (at [72]) that a limited discretion remains after the 1 July 1993 amendments.

Did the Council abandon works?

92 Her Honour accepted that some of the scheduled works in the 1993 Contributions Plan were not carried out and were part of the express reduction in the scope of works effected by the 1996 Contributions Plan. The appellants submitted the reduction in scale amounted to an abandonment of that portion of works that were not to be carried out. There was no real factual dispute about that. The only relevant issue is whether a reduction in the scope of works, or a failure to carry out some of the works, involves a breach of s.94.

93 Once it is accepted that the Council has a right to reduce the scale of works then, provided it otherwise complied with the Act and Regulations, there is no breach upon which the appellants can base their claim for relief. In this case, the reduction in the works came about when the Council made its 1996 Contributions Plan. That is the prescribed manner in which a council may amend a Plan.

94 It follows that the appellants have failed to demonstrate any breach of the Act relating to the post 1 July 1993 development consents and the appeal in relation to those consents should be dismissed.

The refund issue (a) Is a refund an available form of relief under s.124 of the EP&A Act?

95 For completeness, I will deal with the appellants’ argument that the Council failed to expend all the s.94 contributions for the roadworks specified in the 1993 Contributions Plan so that the appellants are entitled to a refund. I have referred to this as the second factor in the straight line equation upon which the appellants’ submission proceeded. In dealing with the question whether the appellants are entitled to a refund it is necessary to assume, contrary to what I have found, that there has been a breach of the EP&A Act.

96 The appellants contended that they were entitled to a refund, at least on a proportionate basis, of any surplus of s.94 contributions resulting from a reduction in the scope of or abandonment of works contained in a Contributions Plan. The appellants’ claim for a refund was based solely upon s.124 of the EP&A Act. The appellants submitted the section was broad enough to encompass an order that they receive a refund of moneys and that the proportion to which they were entitled should be determined on some fair basis. They submitted that this Court should only determine the question of entitlement and that the matter be remitted to the Land and Environment Court for determination of quantum, should they be successful. In the alternative, they claimed damages although the basis upon which they contended they were entitled to that relief was never developed.

97 There is no authority binding on this Court as to whether a person who makes a s.94 contribution as a condition of a development consent is entitled to a refund of those moneys. There are, however, a number of decisions in the Land and Environment Court where obiter remarks to that effect have been made. In Frevcourt Pty. Ltd v. Wingecarribee Shire Council, in which the appellant Frevcourt appealed against a number of the conditions of consent, Stein J said (at p.5) of a condition requiring payment of a contribution under s. 94 for “open space”:

”

98 In this case, Pain J noted that in Toadolla, Pearlman J did not rule out the possibility of a refund (although it must be said she did not refer to it). Pain J at [98] also considered that Bathurst City Council v PWC Properties did not preclude the Council or the Court deciding that s.94 contributions “should be repaid to a contributor in appropriate circumstances”, although her Honour recognised that s.94 was not under consideration in that case.

99 Likewise, Lloyd J in Engadine Area Traffic Action Group Inc v. Sutherland Shire Council observed at [32] that there were:

”

100 Lloyd J also referred to s.111(2)(b) of the Local Government Act 1919 (LGA 1919) (now repealed) as providing an example of the ability of a council to make a refund. Section 111 was contained within part VII of LGA 1919, relating to Finance. Part VII specified, inter alia, the manner in which a council’s funds were to be held. Section 106 required that a council maintain separate and distinct funds, including a trust fund. Section 111 dealt with funds that had to be held on trust, including moneys held by a council by way of deposit or in trust: s 111(1)(b). Section 111(2)(b), to which Lloyd J referred, specified that such funds “may be paid or assured to or on behalf of the persons entitled thereto”. There was then the proviso under s.111(2)(6) to which Lloyd J referred, that if funds had lain in trust for 10 years, the Council could transfer the funds into another fund, “subject to repaying the same to any person entitled thereto”. His Honour concluded at [33]:

Frevcourt

101 With respect to his Honour, I do not agree that these provisions of LGA 1919 provide support for the entitlement to a refund such as is claimed by the appellants. Section 111 expressly provided both that moneys of certain categories were held on trust and that the person entitled thereto was entitled to be repaid the moneys. There are no like provisions in the EP&A Act.

102 None of their Honours (other than Lloyd J with whose remarks I disagree), indicated the basis upon which they considered that a refund was available. Neither s.94 nor the regulations expressly provide for it. By the same token, the legislation does not expressly prohibit a refund. In the absence of any express permission or prohibition, the question arises as to whether there is anything in the legislative scheme that makes a refund permissible, or alternatively, prohibits the making of a refund.

103 The following matters tend to a construction that there is no power to refund contributions. First, I have already expressed the view that the power to amend a Contributions Plan involves the ability to use funds (initially required for a particular amenity or service) for the amenity or service substituted, changed or varied in the amended Plan. In such a case there would be no right to a refund.

104 A Council is also entitled to repeal a Contributions Plan. It might be expected that the clearest case where there might (and ought to) be an entitlement to a refund is where a Plan is repealed after s.94 contributions have been received and no new Contributions Plan is made. However, in that case, as there is no breach of the Act there is no entitlement to relief under s.124, which is the jurisdictional basis upon which the appellants base their claim for a refund. Further, although s.94 contributions are held for a public purpose, in the case of a repeal of a Contributions Plan there is no longer any public purpose for which the funds are held. The authorities are clear that the statutory trust is not the same as, nor do persons have the rights that flow from moneys being impressed with, a private trust. The same is true of moneys held for a public purpose. There is no correlative private right. A contributor in such a case therefore has no rights of or equivalent to those of a beneficiary. It may be that a contributor would have a general law right to recover the s.94 contribution on a restitutionary basis, for example as money had and received. Such a right, however, is different in nature and concept to the relief that an individual may seek under s 124 of the EP&A Act.

105 The accounting regulations are also relevant. If there is more than one contributor to the fund for the provision of a particular amenity or service then all s.94 contributions made in respect of that amenity or service, become part of a combined fund. It would seem unlikely that the legislature would have envisaged a right to a refund in circumstances where funds were to be mixed. Although a council is required to record the details of individual s.94 contributions and the particular public service or amenity to which it relates, its accounting obligation relates to the expenditure in respect of the amenity, not to an accounting in respect of the expenditure of the particular s.94 contribution.

106 If there was a right to a refund, the further question arises as to the basis upon which the right is to be determined. Is it to be based upon the principle that first payments in are to be taken as first payments out? Is it to be on a proportional basis? If so, is any account to be taken of accumulations of interest on the fund. In my opinion, the absence of any enabling provision dealing with these issues would tend to a conclusion that the legislature did not intend there to be an entitlement to a refund.

107 If there is no right to a refund, it may be that the only right, if there is a breach of the Act, is a right to compel a council to use the funds for the public purposes for which they were paid: see Levadetes. This would be a logical result flowing from the nature of such funds being held for a public purpose. I acknowledge, however, that that does not satisfactorily explain how a Council is to treat any surplus should that position ever eventuate.

108 Even if there is a right to a refund, there remains a question whether the appellants are entitled to a proportionate share of any surplus, in circumstances where the particular funds they contributed have been fully expended. The trial judge at [111] adopted the reasoning in Denham Pty. Limited v. Manly Council to the effect that to be entitled to a refund, a contributor had to prove its own funds had not been expended. In Denham, (at p.115) Talbot J said:

In the absence of a capacity to isolate any unspent part of the applicant’s contribution from the balance in the fund at the relevant date, no refund can be made.

109 Pain J at [112] made a specific finding that Council had spent “well in excess” of the appellants’ s.94 contributions under the post-1 July 1993 consents. She also referred, without making a specific finding, to the Council’s evidence that it had spent well in excess of all contributions. Her Honour then concluded that the appellants had failed to discharge their evidentiary burden of proof of demonstrating moneys remained unexpended. It followed, on her Honour’s reasoning, that they had failed to demonstrate a breach of s.94.

110 On the appeal, the appellants conceded that the funds they had contributed had been expended. They contended, however, that that was irrelevant to their right to claim a refund and that if there remained any funds surplus to the actual expenditure on the amenities for which a s.94 contribution had been received, a contributor was entitled to a refund proportionate to the contribution that had been made.

111 Again, it is necessary to return to the legislation to ascertain the nature of any right that might be available.

112 Section 94(3) and the regulations govern how the moneys of an individual contributor are to be held and expended. A s.94 contribution is made because a council requires it as a condition of a particular development consent. A council must hold a s.94 contribution for the purpose for which it was required and apply it towards providing the public amenities or public services specified in the Contributions Plan to which the contribution relates.

113 If an individual contributor’s funds have been expended, the council has fulfilled its statutory duty in respect of those funds. Once a contributor’s funds have been expended, and a council’s duty satisfied in respect of those specific finds, it is difficult to see any basis upon which that contributor would be entitled to a share of surplus funds contributed by other persons, who logically must have contributed moneys at a later point of time.

114 It follows, but for different reasons, that I consider that her Honour’s determination in relation to the right to a refund was correct and the appeal must fail.

Was there a surplus of s.94 contributions

115 The appellants claim for relief was, in any event, predicated upon there being a surplus. The trial judge did not make a specific finding on this. The only reference she made to a surplus was a reference to the amount of $605,539.00, that had been the subject of a book-keeping entry from the s.94 fund to the general fund. (The appellants argued before her Honour that there was in fact an excess of $871,767.00). Her Honour stated (at [114]) that it was “unnecessary [to] resolve this … dispute” because of her conclusion that the appellants had failed to prove that their moneys remained unspent.

116 The sum of $605,539 derived from a spreadsheet prepared by Mr Brearley, the Council’s Design and Projects Manager, which in turn was based upon Council’s records. Council’s records revealed that that amount is the mathematical difference between a sum of approximately $1.5 million, being the cost of roadworks that should have been funded by s.94 contributions, and a sum of $952,960.00 that was actually accounted for by way of s.94 contributions.

117 Mr Neville, the Council’s Financial Services Manager explained (his affidavit sworn 5 December 2002) that the amount of $605,539 had been advanced from Council’s General Fund to the s.94 fund for the purpose of funding the East Bowral roadworks for which s.94 contributions had been received. This amount was repaid from the East Bowral s.94 Fund for Roads to Council’s General Fund on 17 September 2002. Mr Neville further explained that Council’s records indicated there would be a shortfall of s.94 contributions compared to expenditure on roadworks for which the contributions had been imposed.

118 Mr Neville was not cross examined on either of these matters. On his explanation there was no surplus of funds. Rather, the Council had received s.94 contributions into its General Fund, (as it was entitled to do) and then had undertaken the appropriate bookkeeping entries in relation to the actual expenditure of s.94 contributions.

119 The alternate amount of $871,767.00 that the appellants alleged comprised the surplus was derived from a spreadsheet (Exh W) prepared by Mr Price, the appellants’ consultant, as at November 2002. The spreadsheet set out the total of s.94 contributions received by Council since 1988 as well as total expenditure (made both from s.94 contributions and from general funds) on roads in East Bowral until the end of the financial year 2003. The calculation necessarily involved a forecast of income and expenditure for the financial year 2003. It also included an amount of approximately $200,000 in interest. Mr Price was not cross-examined on this document. Neither Mr Price’s table nor his evidence met the evidence of the Council explaining the transfer of the $605,000 from the s.94 fund to the general fund. Nor could his calculation of $871,767.00 be accepted as accurate given the predictive aspect of the 2003 figures.

120 It is not apparent therefore that there was a surplus. If the appellants had otherwise been successful on their appeal, the Court would have required a greater explanation and analysis of the financial situation in order to determine whether the matter should be remitted to the Land and Environment Court for a proper determination on that question. However, neither course is necessary given that the appellants, in my view, have failed on all other issues in the case.

Discretionary consideration in the grant of relief.

121 The nature and extent of the discretion to grant relief under s.124 was considered by Kirby P in Warringah Shire Council v. Sedevcic (1987) 10 NSWLR 335. Although in this case the availability of a refund by way of relief was assumed, Kirby P’s observations in respect of discretion are pertinent to whether a refund ought to be ordered. His Honour said at 339:

Attorney-General v. BP (Australia) Ltd.

Attorney-General v. Harris

Trimboli v. Penrith City Council

Lizzio v. Ryde Municipal Council

122 The trial judge held that she would not have granted relief in this case even if the appellants had established that there had been a breach of the Act, that their funds had not been expended, and that there was a surplus. She said at [128] that it was undesirable for a developer to seek a refund from a Council after the sale of lots in a subdivision in circumstances when it had the benefit of the development consent. She considered the position was compounded when the claim was brought many years after the development consents were granted.

123 I agree with her Honour that these matters were relevant discretionary factors to take into account. I see no error in her Honour’s remarks as to how she would have exercised the discretion.

124 The appellants made another complaint on this issue, namely that the occasion for the exercise of the court’s discretion had not arisen because the proceedings before her Honour had been structured so that her Honour was required to answer only the questions of principle involved. They submitted that they had not been heard on the question of the exercise of the discretion.

125 Although the matter proceeded before her Honour on a limited basis, the question whether the appellants were entitled to relief was integral to her Honour’s determination. The Council had also raised the question of discretion in its submissions. I am not satisfied, therefore, that the appellants’ contention on this point reflects the course of proceedings at first instance.

Costs

126 The appellants also challenged the order for costs that had been made in the court below and rely upon their written submissions made to the Court. I have read those submissions. The only matter upon which I make any comment relates to the appellants’ reference in those submissions to the “s.94 Manual” which is a document prepared on behalf of local councils. The manual makes specific reference to the entitlement to a refund. The appellants contended that that was one of the matters to which they turned in assessing their entitlement to relief. Contrary to what is stated in the manual, I have expressed a tentative view that a refund is not relief to which a person is entitled under s.124. I do not consider, however, that that is a sufficient basis upon which to make other than the usual order as to costs. The appellants ran a complex case involving a history of dealing with and conduct by Council for a period in excess of a decade. In doing so, they were undoubtedly aware of the vagaries of litigation and the possibility that they may not be successful. In the end result, the question whether a refund is, as a matter of law, an available remedy under s.124 is not the matter upon which they failed. In my opinion, there are no discretionary reasons as to why costs should not follow the event, both at first instance and on appeal.

Comment

127 Unfortunately, notwithstanding the amendments, made to the Act in 1993 that were directed to ensuring that councils more closely observed the link between the purpose for which contributions were made and actual expenditure, no attention was given to the possibility that s.94 contributions might not be expended, in part, or at all. Although the need for a council to prepare a Contributions Plan to which the s.94 contributions are linked makes it less likely that funds will not be fully utilised, it cannot be assumed that the possibility will never arise. The uncertainty that surrounds the question whether there is an entitlement to a refund, whether or not there has been a breach of the Act, is highly unsatisfactory and legislative attention is needed to clarify the rights and entitlements of both councils and those who are required to contribute funds pursuant to s.94.

Order

128 I propose that the appeal be dismissed with costs.

129 IPP JA: I agree with Beazley JA.

130 McCOLL JA: I agree with Beazley JA.

******

Citations

FREVCOURT PTY. LIMITED (ACN 003 601 787) . & ANOR.v. WINGECARRIBEE SHIRE COUNCIL [2005] NSWCA 107

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CITATION:	FREVCOURT PTY. LIMITED (ACN 003 601 787) . & ANOR.v. WINGECARRIBEE SHIRE COUNCIL [2005] NSWCA 107
HEARING DATE(S):	08/02/05, 09/02/05
JUDGMENT DATE:	6 April 2005
JUDGMENT OF:	Beazley JA at 1; Ipp JA at 129; McColl JA at 130
DECISION:	Appeal dismissed with costs.

CATCHWORDS:	LOCAL GOVERNMENT - development consents - s.94 Environmental Planning and Assessment Act - financial contributions paid by developers to council - whether moneys paid held in trust by council - whether developers entitled to refund of financial contributions not expended by council - LOCAL GOVERNMENT - Development Control Plan - whether schedule of works incorporated into terms of development consent - question of construction whether schedule incorporated - LOCAL GOVERNMENT - Contributions Plan - whether council entitled to abandon works contained in Contributions Plan - discretion of council as to expenditure of financial contributions - money paid under s.94 to be assessed in accordance with Contributions Plan in respect of which payment is required
LEGISLATION CITED:	Environmental Planning and Assessment Act 1979 (NSW) Environmental Planning and Assessment (Contributions Plans) Amendment Act 1991 (NSW) Environmental Planning and Assessment Regulation 2000 (NSW) Local Government Act 1919 (NSW) Local Government Act 1993 (NSW)
CASES CITED:	Bathurst City Council v PWC Properties Pty Limited [1998] HCA 59; (1998) 195 CLR 566 Denham Pty Limited v Manly Council (1995) 89 LGERA 108 Engadine Area Traffic Action Group Inc v Sutherland Shire Council [2004] NSWLEC 264; (2004) 134 LGERA 75 Frevcourt Pty Ltd v Wingecarribee Shire Council (1993) 80 LGERA 75; [1993] NSWLEC 65 Levadetes & Anor v Hawkesbury Shire Council (1988) 67 LGRA 190 Mirvac Homes (NSW) Pty Limited v Baulkham Hills Shire Council [2000] NSWLEC 199 Parramatta City Council v Peterson (1987) 61 LGRA 286 Rodmac Investments Pty Ltd v Great Lakes Shire Council (NSWLEC, 2 August 1991, unreported, Bignold J) Toadolla & Co v Dumaresq Shire Council (1992) 78 LGERA 261 Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335 Zhang v Canterbury City Council (2001) 115 LGERA 373
PARTIES:	Frevcourt Pty. Limited (ACN 003 601 787) (First Appellant) Lynton Kettle Constructions Pty. Ltd (ACN 002 518 569) (Second Appellant) Wingecarribee Shire Council (Respondent)
FILE NUMBER(S):	CA 40019/04
COUNSEL:	M.G. Craig QC/Dr. S. Berveling (Appellants) J.A. Ayling SC/Ms. J. Jagot (Respondent)
SOLICITORS:	Hunt & Hunt Lawyers (Appellants) B. Bilinsky & Co. (Respondent)

LOWER COURT JURISDICTION:	Land & Environment Court
LOWER COURT FILE NUMBER(S):	Pain J
LOWER COURT JUDICIAL OFFICER:	LEC 40176/00