GPD Services Pty Ltd v Gold Coast City Council

[2009] QPEC 112

[2009] QPEC 112

PLANNING AND ENVIRONMENT COURT

JUDGE RACKEMANN

P & E Appeal No 1278 of 2007

GPD SERVICES PTY LTD
(CAN 010 318 742)  Appellant

v

GOLD COAST CITY COUNCIL  Respondent

BRISBANE

DATE 17/11/2009

Mr B G Cronin for the Appellant

Mr D R Gore QC for the Respondent

ENVIRONMENT AND PLANNING – Appeal against infrastructure charge notice – whether appeal is a merits review pursuant to s 4.1.52 – whether appellant entitled to a credit – whether use had been “established” – whether error in calculation of transport network infrastructure charge – meaning of equivalent full time enrolment – whether that is less than maximum enrolment permitted

JUDGMENT

HIS HONOUR:  This is an appeal against an infrastructure charge notice issued by the respondent at about the same time as it approved the appellant’s (GPD) application for a development permit for a material change of use for an educational establishment (Australian College of Natural Medicine) at Unit 16, 105 Scarborough Street, Southport and more particularly described as Lot 16 on SP182354.
The infrastructure charge notice calculated charges in the aggregate amount of $353,970.62.  Charges were calculated for recreational facilities network infrastructure ($6,564.86), local government transport network infrastructure ($231,777), and State transport network infrastructure ($115,628.76).

The appeal is brought pursuant to s 4.1.36(4) of the Integrated Planning Act 1997 (Qld) (the IPA). At the time the appeal was instituted that section provided:

“An appeal under this section may only be about:
(a) the methodology used to establish the charge; or
(b) an error in the calculation of the charge.”

GPD relies only on s 4.1.36(4)(b), that is, that there was an error in the calculation of the charges. The charges were calculated pursuant to a priority infrastructure charges plan, or PIP. Relevantly for present purposes the PIP:

“(i) provided for infrastructure credits to be recognised for the amount of actual or imputed infrastructure contributions arising from either a previous payment made under a policy or PIP or arising from existing lawful use rights; and
(ii) provided for transport infrastructure charges in relation to tertiary or further educational establishments (within which description the subject development falls) to be calculated by reference to the equivalent full time enrolment.”

GPD asserts that:

“(i) it was entitled to an infrastructure credit, not recognised in the infrastructure charge notice, arising from existing lawful use rights under section 13.2.2 of the relevant PIP, and
(ii) that the transport infrastructure charges were wrongly based on the maximum enrolment of the educational establishment rather than on the equivalent full time enrolment, as required by the PIP.”

Appeals to this Court are by way of hearing anew (s 4.1.52).  Since this appeal was instituted, s 4.1.36 has been amended.  The amendments replaced s 4.1.36(4)(a) with the following:

“Whether a charge in the notice is so unreasonable that no reasonable relevant local government or State infrastructure provider or coordinating agency could have imposed it.”

The introduction of a Wednesbury style test perhaps creates some tension with s 4.1.52.  However, GPD does not rely upon that provision.  The provision which it relies upon, relating to an error in the calculation of the charge, has been unchanged since the provision was first introduced.  That ground of appeal is not, in my view, inconsistent with s 4.1.52. 

It may be noted that the explanatory notes to the provision, as first enacted, referred to the intention to create a merits assessment.  In that regard it stated:

“However, a number of stakeholders were concerned that declaratory actions would be limited to procedural matters and subjected to a higher legal test by the Court rather than a merits assessment of the issue in question.  Section 4.1.36 is intended to clarify the scope of legal action in respect of infrastructure charges.”

More particularly, in relation to s 4.1.36(4)(b), the explanatory notes stated:

“Subsection (4)(b) allows appeals about errors in the calculation of the charge for the premises.  So, this might include matters such as (with examples given in brackets):

·Assessing the demand from the premises (what is the existing demand from the premises, what will the future demand be);

·Leveying a charge where a charge is not appropriate (imposing a charge where the development does not result in additional demand on the infrastructure networks);

·Application of any system of “credits” for previous infrastructure contributions (what was the previous contribution, is a full or only a partial credit available);

·Converting demand into the charging “units” used in the infrastructure charges schedule (if charges are based on developable area, calculate the chargeable area by subtracting the area of any areas which cannot be developed from the total site area, or for a trips based transport charge, calculate the number of trips generated by an industrial or commercial use); and

·Basic errors in the mathematical calculation of the charge for the premises.”

It may be noted that s 4.1.50, which is in the same division of the IPA as s 4.1.52, contains express reference to appeals under s 4.1.36.  There is nothing in s 4.1.52 or, indeed, s 4.1.54 of the IPA to indicate that appeal rights under s 4.1.36 are different from other appeals.

The parties correctly submitted that, whatever be the position in relation to appeals which rely on the Wednesbury test, under the new s 4.1.36(4)(a), the present appeal, which is based on subparagraph (b), should proceed as a de novo merits review, in accordance with s 4.1.52(1).

The issue as to whether GPD was entitled to an infrastructure credit depends upon the proper interpretation application of the relevant provisions of the PIP.  Clause 13.3.2 of the PIP provides:

“An infrastructure credit may be recognised for the amount of actual or imputed infrastructure contributions arising from:

·        previous payments made under a policy or PIP;  or

·        existing lawful use rights.

No imputed credit will be applied where existing lawful rights apply to a site but the use has not been established.”

Clause 14.2 of the PIP has the effect of slightly qualifying clause 13.3.2.  It relevantly provides:

“Transport network credits granted by Council may result from:

...

(ii)     Existing lawful rights:

(a)       Use established:  Non-Residential lots: based on   Evidence provided by the applicant;

(b)       Use not established:  nominal credit of 6.5 Trip Ends   per residential lot.

Recreational Facilities Network Credits granted by Council may result from:

(i)     Existing Lawful Use Rights (residential only)...”

For this appeal existing lawful use rights are potentially applicable only in respect of the transport network charge, because clause 14.2 does not recognise credits for existing lawful use rights for non-residential uses for the recreational facilities network. 

Infrastructure credit is defined in section 1.2 of the PIP as: 

“The credit which may be attributed for previous contributions or an existing lawful use or existing lawful right permitted under the current planning scheme, on the site at the time of lodging the application.  Infrastructure credits are determined for each network.”

An existing lawful use right must have been “established” at the time of lodging the relevant application.  The expression “established”, in this context, means that the use was “up and running” (see, in a different context, McDonald v Douglas Shire Council [2004] 1 QdR 134).

The premises, to which the development permit for the material change of use for an educational establishment was granted, is one tenancy in a larger development.  That larger development was the subject of its own development approval to facilitate the construction of two multi-storey residential unit buildings over a ground floor plaza incorporating a number of uses, including commercial premises and commercial services. The subject tenancy was shown as being for commercial use in the approved plans but was vacant at all material times prior to the making of the subsequent application for a development permit for a material change of use to facilitate the educational establishment.

The submissions on behalf of GDP focussed upon the development approval for the larger complex of which Lot 16 formed part and the fact that the complex had been developed and various parts of it were in use prior to the development application for lot 16, such that the approval for the larger complex had not lapsed.  It was submitted that the relevant lawful use rights are the rights which are applicable to the site to which the earlier development approval relates and that the use commenced on land, the subject of that approval, notwithstanding that “individual rooms of sections of buildings constructed and reconfigured subsequently may not have had a use commenced within them.”

It was submitted on behalf of the Council that the earlier approval permitted lot 16 to be used for either commercial premises or commercial services, neither of which had been established on Lot 16 prior to the subsequent application. 

Ultimately the issue is the identification of the site in respect of which the use must have been established in order for there to be an infrastructure credit in accordance with clause 13.2.2.  “Site” is defined in the Gold Coast Planning Scheme to mean:

“Any land on which development is carried out, or is proposed.  The land may include the whole or part of one allotment or lot, or more than one allotment, if there are contiguous to each other.”

The fact that Lot 16 is part of a larger development does not, of itself, mean that it cannot be regarded as the “site”.

Clause 13.3.2 of the PIP is concerned with the calculation of a credit in relation to an infrastructure charge.  The charge in this case is one that applies in respect of the material change of use for an educational establishment.  The site of that development is Lot 16.  Counsel for GPD conceded as much.  That is, in my view, the site in respect of which the use must have been established.  Whatever might be the case in relation to the broader complex, no use had been established within Lot 16 and no credit is to be applied with respect to an infrastructure charge raised by reference to that site.
The dispute in relation to the transport infrastructure charges comes down to whether the equivalent full-time enrolment of the educational establishment is less than 260.  260 is the figure that was used by the Council.  It is also the maximum permitted enrolment pursuant to the terms of the approval.

Clearly by using the word “equivalent”, the PIP contemplates that there might be circumstances in which the number which is used for the purposes of the calculation of this charge, will be less than the full-time enrolment.  The PIP contains no definition of the expression “equivalent full-time enrolment”.

GPD conducted a survey to determine the number of individual students who attend the college on each day.  It was submitted on behalf of GPD, that the equivalent full-time enrolment should be determined based on the average attendance at the college on a daily basis.

The relevance of daily attendance is reflected in Table 2.7 of the PIP, because the charge is calculated by multiplying the equivalent full-time enrolment by a figure of 1.8, said to represent the “net new trip ends per day”.  The expression “trip ends” is defined in the PIP as follows:  “Is a measure for daily travel demand for the transport network.  The journey from origin to destination generally counts as one trip end.”

I accept the relevance of looking at daily attendance but I do not accept that the equivalent full-time enrolment should be determined by reference to the six day average.  The survey suggests that no students attend on Sundays and relatively few attend on Fridays or Saturdays.  This suggests that the full-time student body does not generally attend on a six day per week basis.  Accordingly, the use of a six day average to calculate equivalent full-time enrolment would tend to underestimate the true figure. 

It was submitted on behalf of the Council that the equivalence, which should be looked at, is the equivalence in terms of the maximum trip ends.  Quite obviously, the general approach to transport infrastructure planning looks at the daily travel demand.  On the Council’s approach, in order to arrive at the equivalent full-time enrolment, one would have to carry out quite a detailed exercise of looking at not only the enrolment per se but the travel habits of those enrolled, including whether they attended the college on more than one occasion per day, whether they arrived by public transport together or by individual cars or the like.

I do not consider that the table requires that sort of determination.  It may be noted, for example, that primary and secondary educational establishments have their infrastructure charges calculated simply by multiplying the figure of 1.8 or 1.9 new trip ends per day by the total enrolment.  It does so irrespective of the fact that those enrolled at such establishments would usually have different travel habits.  Some would attend by bus or train or some by cars or the like.  Further, the students attending primary or secondary schools are not the only ones who generate traffic demand associated with the use.  There are teachers and other staff as well as those who attend such establishments to service them. 

Quite obviously, the table adopts a formula which is designed to provide a reasonable guide as to what the daily travel demand would be in relation to a range of different uses.  In relation to educational establishments, that is done by applying a certain rate to the enrolment or, in the case of a tertiary or further educational establishment an equivalent full-time enrolment. 

It is, of course, understandable that one would look at an equivalent full-time enrolment rather than simply the enrolment in the case of tertiary or further educational establishments.  It is, of course, quite common for primary or secondary schools to have a particular enrolment with that number of children attending on set days for set periods of time.  In the case of tertiary or further educational establishments it is, of course, common not only to have full-time students but also to have students who attend only on a part-time basis or perhaps not at all.

In my view, what the table calls for is an assessment of the enrolment and, in the case of tertiary educational establishment, what is the equivalent full-time enrolment.  That involves an assessment of the extent to which the enrolment comprises full-time students and then, in so far as it involves enrolment of students who do not attend full-time, what that part-time enrolment is equivalent to in terms of a full-time enrolment.  That is, ultimately, a question of fact and, indeed, of judgment.  It is one which is unlikely to produce a very precise assessment in each case, given the various arrangements which typically apply in relation to the various ways in which students can attend such establishments in this day and age.

It was submitted on behalf of the Council that the assessment should still be of the maximum, that is 260 enrolments, because there is nothing in the approval of the material change of use which would prevent the institution from having 260 full-time enrolments in the future.  It was said that whatever be the position now, the Council may be left out of pocket if, in future, the nature of the enrolment at the institution changed.  That is true, but equally the adoption of simply the maximum possible may well, in many instances, lead to an unfair overestimate of the contributions which would be reasonable in the circumstances.

Ultimately, it is a matter of making a judgment in the circumstances on the basis of the available evidence as to what is the existing and likely future demand.  In this case the Court is dealing with a use which has been an established use and, indeed, has moved to the current premises from other premises in Southport.

It has already been noted that the survey evidence suggests that the attendance at the college is primarily on the first four days of the week.  On each of those days something of the order of 150 students attend.
The co-ordinator of transport planning at the Gold Coast City Council deposed that, on the basis of the survey conducted, he would assess the maximum number of vehicle trips generated on a representative peak week day as in the order of 288, which equates to 160 equivalent full-time students times the ratio 1.8 for new trip ends per day.

As already noted, the focus of the table is on the equivalent full-time enrolment.  The affidavit of Mr McDonald, who is the Chief Financial Officer for GPD, establishes that the colleges ratio of full-time to part-time students is 45 per cent full-time to 55 per cent part-time.  Assuming a maximum enrolment of 260, which is about what the current enrolment is, that evidence establishes that the full-time enrolment is approximately 117 and the part-time enrolment, 143.  His affidavit goes on to explain that whilst full-time students have on average 15 hours of classes per week, part-time students only attend one day per week.

Mindful of the survey which suggested that the student body as a whole tends to attend on the first four days of the week and then in much smaller numbers on Friday and Saturday, it would seem not unreasonable to divide the part-time enrolment by four in order to estimate the equivalent full-time employment.  That would produce an equivalent full-time enrolment of about 153, which, as it happens, is very similar to the surveyed attendance at the college on the busier days, being Monday through to Thursday, and very similar to the maximum number of vehicle trips generated on a representative peak week day, in accordance with the evidence of the Council’s co-ordinator of transport planning at the Gold Coast City Council.

In the circumstances, and acknowledging that the exercise is not entirely precise, I am satisfied, on the balance of probabilities, that the equivalent full-time enrolment of the college is, and is likely to be, in the order of 160 and accordingly that the transport infrastructure charges should be calculated by reference to an equivalent full-time enrolment of 160.