GHD Pty Ltd v Pristine Waters Council
[2001] NSWLEC 186
•07/27/2001
Land and Environment Court
of New South Wales
CITATION: GHD Pty Ltd v Pristine Waters Council [2001] NSWLEC 186 PARTIES: APPLICANT
RESPONDENT
GHD Pty Ltd
Pristine Waters CouncilFILE NUMBER(S): 10109 of 2001 CORAM: McEwen AJ KEY ISSUES: Development Consent :- contributions condition (s 94) - reasonableness LEGISLATION CITED: Environmental Planning and Assessment Act 1979, s 94 CASES CITED: Parramatta City Council v Peterson (1987) 61 LGRA 286 DATES OF HEARING: 18/07/2001, 19/07/2001 DATE OF JUDGMENT:
07/27/2001LEGAL REPRESENTATIVES:
APPLICANT
Mr John Webster (Barrister)SOLICITORS
Stacks - The Law FirmRESPONDENT
SOLICITORS
Mr John Whitehouse (Solicitor)
Minter Ellison
JUDGMENT:
IN THE LAND AND 10109 of 2001
ENVIRONMENT COURT McEwen AJ
OF NEW SOUTH WALES 27 July 2001
- Applicant
- Respondent
1. The sole issue in this matter is the reasonableness of condition 32 of a consent granted by the respondent Council on 11 February 2000. That was a consent for a subdivision of 41 residential lots at Corindi Beach, a small beachside location some 20 or so kilometres north of Coffs Harbour. The subdivision is located at the south of the main development in Corindi. The challenge relates to a s 94 contribution condition, which I will refer to in some detail shortly.
2. The population of Corindi, at the relevant time, when 1995 Contributions Plan Number 4 was adopted by the Council, was estimated to be some 600 persons. The projected increase in population between 1995 and 2001 was nominated in the Plan at 821, that is an expected total population of 1421. In 1995 a large subdivision in Corindi Beach by the same applicant provided evidence that individual lots were selling for $25,000 to $30,000, and that if the development costs contribution to Council were the estimated $7,300 then the total development costs to the developer would be some $28,400 per lot, suggesting that development of residential lots in a subdivision in this area were uneconomic and probably would not proceed.
3. Although in this matter total development cost contribution to the Council for the subdivision the subject of the consent which included condition 32, amount to $10,728 per lot, of that the amount in challenge is $3,970 per lot. Contribution Plan Number 4/1995 was introduced to deal solely with the Corindi area in the then Ulmarra Council. Ulmarra Council and Nymboida Council amalgamated to form the present respondent.
4. Prior to Contribution Plan Number 4/1995, a draft contribution plan for the whole of the Ulmarra Shire was prepared by John Allen and Associates in March 1993. The genesis of items in the 1995 Contribution Plan Number 4, in particular in Schedule 1 thereof, can be found in the schedules and tables of the John Allen and Associates’ 1993 draft plan. It provided an analysis of the population then existing, and of demand for these various items, which appear on their face to be reasonable.
5. Relevant to the challenge in these proceedings the contribution per additional lot for land in Corindi Beach was, in the John Allen and Associates 1993 draft, $4,000 for the upgrading of arterial roads as a discrete item, and for community facilities a further item of $500 per lot. The 1995 Contribution Plan Number 4 seems to have been collated from one or more sources, and unfortunately has internal inconsistencies.
6. Schedule 1 to the 1995 Plan No 4 is headed “Works Program” and is divided into three categories, open space, community amenities, and roads. Costs are allocated against these items in these categories, and the percentage responsibility for each being stated as 100 per cent; the year for the completion of the works given as 2001.
CONTRIBUTION COST % RESPONSIBILITY YEAR
TYPE
Open Space $60,000 100% 2001
Embellishment
COMMUNITY AMENITIES
Addition to toilet
block $70,000 100% 2001
Multipurpose Centre $27,000 100% 2001
Upgrading of sports $64,000 100% 2001
field
Corindi foreshores $20,000 100% 2001
Corindi tennis $18,000 100% 2001
Corindi cycleway $45,000 100% 2001
ROADS
Upgrading of
Coral Street $275,000 100% 2001
7. Contribution Plan Number 4/1995 states, in Part B, Clause 7, that the contribution rates under the plan are as stated in Schedule 1:-
…and have been determined in accordance with part C of this plan.
However, it is then acknowledged in the plan that where the existing population will benefit from the works the costs will be apportioned between s 94 funds collected and other Council monies representing the proportion of existing residents would benefit by the expenditure.
8. Whilst no calculation of apportionment is set out against open space in the body of the document, it is set out as a formula for both community amenities and for roads.
9. Condition 32, as it appears in the consent, comprises five items. It is only the first three items to which a challenge is raised. They are arterial and major roads upgrading $56,006, public open space $8,988 and community amenities $97,801.
10. There were two other items concerning the water scheme and the sewerage scheme, but these were not challenged in the present proceedings.
11. The three items under challenge total some $162,796, which is a contribution of $3,970 per separate lot.
12. The source of power for Council imposing a monetary contribution is the Plan itself, per s 94(7) of the Environmental Planning and Assessment Act 1979. The opinion or conclusion of the Council that the development in question will result in an increased demand for services or amenities in the relevant area gives foundation to the impost (per s 94(1)).
13. Whilst the Council has no power to vary the contribution under the Contribution Plan, otherwise than by adopting a new plan, this Court has power to disallow or amend a condition, imposing a monetary contribution if it is of the view that the contribution as fixed is unreasonable (per s 94(8)). The essential question here is whether or not the impost, individually or collectively, was unreasonable.
14. For the appellant, evidence was adduced from Mr Des Brady, a planner with extensive experience in the preparation of s 94 plans and road construction costs. For the Council, Mr Kenneth Exley, the Divisional Manager of Environmental Services Planning and Development Control of the Council, gave evidence. Mr Timothy Jenkins, the Divisional Manager of Technical Services gave evidence in relation to the roads component as a discrete item.
15. Notwithstanding the difficulty initially presented in understanding the basis of challenge, ultimately there seems in my view to have been three main complaints.
16. Mr Brady in his statement of evidence, exhibit 1, identified six heads of challenge. However, throughout the hearing these seem to be narrowed to the following: firstly, whether there was sufficient nexus between some of the items in the Plan and the location of the subject land to warrant their inclusion in the contribution; secondly, the question of apportionment, namely was there to be any apportionment for one or more components in condition 32, that is between the existing (read 1995) residents, and the projected residents for the life of the Plan, namely a projected increased population of 821 residents. The third issue was the occupation rate of the new lots, namely whether an occupancy rate of 3.0 persons per dwelling, or 2.2 persons per dwelling was to be adopted.
17. Some challenges by the applicant were conceded by the respondent Council. Firstly, in Schedule 1 the total for community amenities is shown as $480,000. The mathematics are wrong in that regard and the total should have been $244,000.
18. Secondly, and ultimately this does not bear upon the final outcome, the apportionment factor calculated in the plan appears to have been wrong. The multiplier used in the existing plan is 1.36. The way that was arrived at was erroneous insofar as it did not take account of the percentage to be discovered by adding the projected population to the existing population. That 1.36 of course resulted in a contribution 36 percent greater than the total amount nominated. The correct apportionment is ascertained by finding the percentage that the increase in population bears to the ultimate total, i.e. 821 as a percentage of 1421, which is 58 per cent, or 0.58.
19. The parties contended for a series of calculations.
CONTRIBUTION TYPE ORIGINAL COUNCIL’S GHD’S
CONDITION POSITION POSITION
Arterial and major $56,006.00 $55,342.62 $11,783.14
Roads upgrading
Public open space $8,988.84 $8.988.84 $3,823.25
Embellishment
Community $97,801.81 $36,555.42 $15,548.84
Amenities
TOTAL $162,796.65 $100,886.88 $29,778.45
TOTAL $3,970.65 $2,460.65 $736.30
Nexus
20. For a valid impost to be raised under s 94 there needs to be, inter alia, a reasonably demonstrable nexus between the identified expenditure and the additional demand for amenities and services generated by the implementation of the proposed development. Section 94 talks in terms of that increase in demand being within the area. Area is not defined, but it must be the overall area within which the increased demand will be experienced, and within which it will relate or impact upon, or otherwise have effect upon the amenities and services provided by the Council. There needs to be both temporal and physical nexus between the increased demand generated by extra population, and the expenditure identified to meet it.
Open Space
21. A contribution of $60,000 is nominated in Schedule 1 for open space. It is not for the purpose of purchasing land, of which there seems to be an ample amount in the area, but rather for the embellishment of open space already available to residents of Corindi Beach.
22. The applicant, through Mr Brady, said that the Contribution Plan failed to identify the type, quality or location of the open space to be embellished and says that to be relevant those embellishments must occur within 500 metres of the subject site. He says there is no demonstrable, temporal, or causal nexus between the increase in demand which will be generated by the increase in population, and the expenditure of any of these monies. However, I am fortified in my view that it is a proper impost by the decision of Stein J, as he then was, in Parramatta City Council v Peterson (1987) 61 LGRA 286. There the requirement for contribution for car parking related to a carpark some 800 metres from the subject development. Here, like the parking station in the Peterson decision, the embellishment will, in my view, benefit the whole of the area and in particular be of benefit to new residents in the area.
23. In evidence Mr Exley identified the areas of public open space for recreation, some of which have facilities of playground equipment nature, and some do not. The equipment is not new and was on his assessment, fully utilised by the existing population. Increased population will require these facilities to be augmented or embellished to provide for that increased demand. Hence the challenge, in my view, to open space on the basis of nexus fails and it is an item which should be included.
Community Amenities
24. The appellant maintains that the contribution plan provides insufficient demonstrable nexus for the six items under this heading. It is said that no analysis is provided that gives a basis to conclude that the existing facilities are not adequate and sufficient to cope with the demand generated by the increase in population.
25. As with open space embellishment, I do not accept the appellant’s submissions in this regard. The population at 1995 was less than half the expected population in 2001. Taking the items that comprise community amenities individually it can be seen that the increase in population will generate additional demand over and above that which exists, and which additional demand will need to be met with additional expenditure.
26. Dealing with the individual items under community amenities:-
(i) The toilet block. With an increased use of the sports field, the multi-purpose centre (the hall), and the area generally, there will be an increase in demand that will need to be satisfied by either a new toilet block, or some augmentation of the existing block. This should be allowed.
(ii) The multi-purpose centre next, which is the hall. This is a community hall erected predominantly from funds collected from the local community and the Community Area Assistance Scheme. There was a small Council contribution to the cost of its erection. The hall could be better utilised by the installation of demountable partitions. Its present use is curtailed due to an inability to divide the hall into smaller areas for different use at the one time. Partitions will allow this to occur. Given the existing use of the hall, and the increase in demand for its use, this is a reasonably related extra expenditure linked to the increase in population.
(iii) The sports field. Mr Exley says that the figure of $64,000 for this item was for works to assist in accommodating extra and new activities. This was what was forecast in 1994 and history has proved it was a correct forecast. New activities since then, namely baseball and a pony club, have commenced and works are required to improve these facilities for them.
(iv) Corindi foreshore. This expenditure, $20,000, is said to be for the carpark, improved access to the beach and erosion control measures in the sand dunes. It is obvious that more than double the population will create activity which needs to be provided for and this should be allowed.
(v) The tennis courts. There were two tennis courts erected, one of which, some two years ago, was converted to a skate park for the local children. The evidence is that the existing tennis court is fully utilised, hence any increase in population and a doubling of the population warrants a new tennis court and this should be allowed.
(vi) The cycleway. The proposed cycleway is to run alongside the road between the school and the beach where the shop, tennis court, and skate park are located. It terminates some 800 metres from the nearest lot in the proposed subdivision. The reason for it is conflict between vehicular traffic and cyclists along the road. In my view it would be of major benefit to residents in this subdivision.
Roads
27. The 1995 Contribution Plan identifies a need for upgrading of Coral Street flowing from increased residential development. Mr Jenkins, Council’s Divisional Manager of Technical Services, explained that Coral Street is the main access road for the entire Corindi urban area. He cited a 1994 traffic study by the present applicant, which concluded that upgrading Coral Street would be required by an increase in population in Corindi Beach, (see p 16 of exhibit C).
28. In the face of that evidence I reject the submission by Mr Webster that there was no evidence of the relationship of the demand generated by the increase in lots in this subdivision with the proposed works in Coral Street. A matter of some concern, however, was the inability of Council to identify how the roads figure of $275,000 for the upgrading of Coral Street was calculated. No data was available to show how it was arrived at, or sourced.
29. Mr Jenkins analysed the cost of the upgrade of Coral Street using 1995 estimates as being then, in 1995, some $947,177. The nominated and, in my view, already apportioned figure for roads, namely the $275,000, does not readily appear as an appropriate allocation or calculation out of a figure like $950,000. If the new population of Corindi Beach of 821 was to bear its rateable portion of this sum the amount would be some $549,362. However Coral Street also services Red Rock, another small beach side community about five kilometres to the north of Corindi.
30. The 1994 GHD Traffic Study, annexure B to Mr Jenkins’ statement of evidence, exhibit C, shows that in 1992 both locations, that is Corindi Beach and Red Rock had populations of a similar size, and similar dwelling numbers, (see exhibit E to Mr Brady’s statement of evidence, exhibit 1). If one makes a general assumption that the rate of population increase would be approximately the same in each area and that the use of the improved Coral Street would benefit both Corindi and Red Rock, then in percentage terms one can arrive at a figure approximate to $275,000 when the total cost is split between these areas and there is apportionment between the old and projected or new population.
31. Both Mr Brady and Mr Jenkins used traffic counts to try and prognosticate the impost that should be arrived at for the contribution for roads. Traffic counts of course reflect the use of vehicles by residents in houses. If one makes the reasonable assumption of average traffic counts per vehicle per lot, then one can use a percentage analysis of past and future lots approximating to, and for my purposes sufficiently close to, the use of traffic counts, and that is what I propose to do.
32. Mr Webster submitted that the absence of nexus of the need to upgrade Coral Street with increase in population was demonstrated by Council’s own records. These showed little or no expenditure on the components of the works program in Schedule 1, and no existing or planned intent to carry out the nominated works. In Mr Brady’s statement of evidence there is an annexure of Council’s records relating to what has been collected under s 94, and what has been spent since 1995 for roads under Contribution Plan Number 4; $32,120 has been collected, but none of it spent. For community facilities and open space, $55,213 had been collected, of which $13,982 had been spent.
33. The Council’s Draft Plan of Management for 2001 to 2004, adopted by Council on 20 June 2001, which is annexure R to exhibit B, was highlighted by Mr Webster as allegedly showing no forward planning for the implementation of the works in Schedule 1 to the 1995 Contribution Plan Number 4, nor the allocation either of monies collected under s 94 for those works, nor the collection of further s 94 funds to carry them out.
34. He submitted there was a single reference to s 94 monies for Corindi Beach, namely $15,000 for footpath reconstruction at Corindi Beach which is found on p 18 of that document. Whilst that is so, the plan does identify $407,765 coming from s 94 contributions to be utilised for road projects and a much smaller sum of $7,100 for community facilities. That is to be found on pp 20 and 23 of that document, albeit those amounts are not allocated to Corindi Beach, but appear as general figures.
35. Mr Webster submitted that s 94(6) required the expenditure of funds within a reasonable time and that these records demonstrated this had not happened and was, in his submission, not likely to happen. To reach that conclusion would, in my view, require more accurate analysis of what has happened over the last six years. The information I have referred to does not allow any reliable conclusion to be drawn as to what has been collected and applied. Further, what is a reasonable time for the application of contribution monies collected under s 94 for this council at Corindi Beach may be starkly different from what would be a reasonable time for a Sydney metropolitan council. No evidence was called as to the timeframe for the collection of monies and the implementation of works, albeit estimates are given in the Schedule to the Plan, but in my view it would be highly speculative to infer what may or may not be a reasonable timeframe given the state of the evidence as it was left at the conclusion of the hearing.
36. The records to which I have referred and the inability to conclude what may or may not be a reasonable timeframe lead to the conclusion that this head of challenge fails.
Apportionment
37. Mr Webster contended that all of the figures in Schedule 1 to Contribution Plan Number 4 ought be apportioned. In particular he points to the provisions in the plan following a scheme set out in Pt 4 to the Regulations to the EP&A Act which acknowledge and provide formulae for apportionment of contribution between existing and new population. He referred in particular to par 8 of the Plan, and in relation to community amenities par 17, and for roads par 20.
38. However, Mr Whitehouse submitted that the figures in Schedule 1 were already apportioned and had been arrived at after the formula had been applied to base figures. This was to be found, he said, from two sources. Firstly, from each of the items in Schedule 1 the heading “Percentage Responsibility” was shown as a hundred percent. This could only mean, he submitted, that the figures shown were not to be the subject of further apportionment, but rather were the actual figures arrived at when apportionment had been applied for the new population.
39. Secondly, Mr Whitehouse submitted that Contribution Plan Number 4 states plainly in its introductory section on p 5 that the contribution rates “are contained in Schedule 1 and have been determined in accordance with part C of this plan”. As part C contains the apportionment formula (albeit their inputs and mathematics are erroneous), then the Schedule 1 figures are what have been deduced after apportionment. In my opinion, Mr Whitehouse’s approach is correct.
40. The final figures shown in Schedule 1 without any additional apportionment as contended for by Mr Webster, and when one applies correct mathematics to the application of contributions for the lots in this consent, are in my view reasonable in the context of the estimates of expenditure otherwise set out in the myriad of records and documents tendered.
Occupation Rate
41. The s 94 Contributions Plan uses an assumed occupation rate of 3.0 persons per allotment. The applicant says that the evidence points rather to an appropriate rate of 2.2 persons per allotment. The Council’s rate of 3.0 persons per allotment was sought to be supported on two bases. Firstly, Mr Jenkins analysed aerial photographs and counted the number of lots built upon, something one would expect Council to have had records of in any event. Against the total number he applied known population figures to arrive at a figure of 2.8 persons per lot.
42. Secondly, there was in evidence a study by Sinclair Knight in 1997, which was to provide estimates for augmentation of sewer works. This was based on occupation rates obtained in 1986 and 1991 of 2.80 and 2.84 respectively. For their purposes Sinclair Knight concluded that 3.1 should be used for the purpose of their calculations, (see annexure J to Mr Jenkins’ statement of evidence exhibit C).
43. For the appellant Mr Brady analysed the historical information contained in the 1993 Allen draft plan, to arrive at the rate of 2.2 per allotment. Prior to 1992 the rate was 2.2, but in that year it fell to 1.85 per allotment. He said, and I accept, that it was reasonable to apply an eight per cent per annum increase in dwellings such that in 1995 when there was a known population of 600 there would be 276 dwellings. I note that Mr Jenkins used the number of 274 dwellings as at 1995. Hence Mr Brady concluded an occupancy rate per lot of 2.2.
44. This approach by Mr Brady is more likely, in my view, to arrive at an accurate estimate of the correct occupancy rate. Mr Jenkins, counting from aerial photos, in my view would have a margin of error, and Sinclair Knight’s sewer study estimates were for engineering purposes for which it is prudent from an engineering point of view to over design. Hence I adopt the occupation rate of 2.2.
Calculations
45. What should be the appropriate calculation then for condition 32 of consent? It is obvious that as it stands it is unreasonable, if only for mathematical inaccuracy. The three items of challenge total $162,796, that is $3,970 per lot. The total items in Schedule 1 amount to a gross figure of $579,000.
46. The projected population increase of 821, with an occupancy rate of 2.2 persons per lot, yields 373 lots. That is $1,551 per lot (in lieu of $3,970) per lot. This is a total for the 41 lots of $63,611 in lieu of the previous total of $162,796.
47. If one applies this approach to each of the three contribution types in Schedule 1, first by dividing each by 821 to give a rate per additional resident, then by multiplying by 2.2 to give a rate per new lot, and then for this subdivision of 41 lots by multiplying by 41, one arrives at the correct impost for each component. Individually those components then are to be altered as follows. For arterial and major road upgrade the new figure ought to be $30,213, for public open space $6,591 and for community amenities $26,807, giving a total, as I have said, of $63,611. I so order. Formally:
1. The appeal will be upheld.
2. Condition 32 will be varied in the manner I have indicated.
3. The exhibits are to remain with the papers for 28 days and then be returned to the parties.
4. I reserve the question of costs.
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