Gutteridge Haskins and Davey Pty Limited v Coffs Harbour City Council

[1999] NSWLEC 112

Land and Environment Court

of New South Wales

CITATION:

Gutteridge Haskins & Davey Pty Limited v Coffs Harbour City Council [1999] NSWLEC 112

PARTIES

APPLICANT
Gutteridge Haskins & Davey Pty Limited

RESPONDENT
Coffs Harbour City Council

NUMBER:

10676 of 1998

CORAM:

Cowdroy AJ

KEY ISSUES:

Development :- s94 contributions plan - contribution levied in respect of upgrade of State Highway - cost of such works the sole responsibility of the RTA - no liability of council to contribute in respect thereof - works not being performed by council or on its behalf - contribution ultra vires the council

LEGISLATION CITED:

Environmental Planning and Assessment Act 1979, s94, s94AB
Environmental Planning and Assessment Regulation 1994, reg26(1)

DATES OF HEARING:

05/07/1999

DATE OF JUDGMENT DELIVERY:

05/18/1999

LEGAL REPRESENTATIVES:

APPLICANT
Mr W R Davison SC

SOLICITORS
Sparke Helmore

RESPONDENT
Mr A J J Thompson

SOLICITORS
Murray Backhouse Turner

JUDGMENT:

Facts

1. This is an appeal pursuant to s56A of the Land & Environment Court Act arising from a judgment delivered on 23 March 1999 wherein Senior Commissioner Jensen partly upheld an appeal against a contribution levied by the council pursuant to s94 of the Environmental Planning and Assessment Act 1979 (“the Act”). The applicant had applied to the respondent (“the council”) pursuant to the provisions of s96(1) of s96(2) of the Act, seeking modification of a contribution of $186,439.92 levied in respect of certain roadworks. By such judgment, the contribution was reduced to $125,000. The applicant contends that the council has no power to impose such contribution.

2. The development application for which such contribution was levied related to a proposed hardware store/complex at the northern end of the Coffs Harbour Metropolitan area. Such site is bounded on the east by the Pacific Highway (“the highway”) and is adjacent to an intersection of a proposed road, namely Mastrocolas Road and Arthur Street.

3. Following consideration by the council of provision of an at-grade intersection (one which does not involve any underpass) at the junction of the three roads, the Roads and Traffic Authority (“the RTA”) determined that such intersection should be the subject of a “grade separation” intersection. Pursuant to such proposal, an underpass would be constructed at the intersection to enable the highway traffic to flow beneath the east-west traffic of the local roads (hereafter referred to as “the interchange”).

4. By notice of motion filed on 29 March 1999 the applicant seeks an order that cl7 of the council’s consent of 7 May 1998 which required the contribution for the interchange be deleted. The applicant asserts that the Senior Commissioner erred in law in imposing a condition under s94 of the Act. The following question of law is posed to the court:-

Is it lawful for the Respondent to prepare a contribution plan pursuant to s.94AB of the Environmental Planning and Assessment Act, 1979 in respect of works not provided by it?

The parties agree that the words “nor at its cost” be added to the end of the question.

Senior Commissioner’s findings

5. From 1992 the council had conducted traffic studies concerning the future use of the highway, Arthur Street and Mastrocolas Road. A subsequent survey carried out by Arup Transportation Planning in July 1995 on behalf of the council suggested that an at-grade intersection would provide the best short-term solution for traffic management at the interchange. The report recognised that in the long term Arthur Street would need to be grade-separated at the junction of that road with the highway.

6. The council’s Pacific Highway/Arthur Street Interchange Contributions Plan (“the Contributions Plan”) was adopted in February 1998. It had been formulated during 1997 in consequence of a major development known as the Gateway Development proposed for a site in close proximity to the applicant’s development. On 11 September 1997 a Draft Contribution Plan noted that contributions would be required for the cost of the interchange. Whilst the need for a grade separation interchange had been foreshadowed in the above reports as a requirement for the future needs of the area, the proposal to proceed with the grade-separation interchange emanated from the decision of the RTA. In respect of this issue Senior Commissioner Jensen found as follows:-

Later, it became apparent that, not only had the RTA funded this consultant project but was also entirely responsible for design, construction and the funding of the works involved in creating the overpass and at-grade roundabout.

The at-grade roundabout referred to is located adjacent to the proposed overpass at the interchange. Senior Commissioner Jensen was obviously concerned at the contribution required by council as he observed in his judgment:-

The second issue that arose during the course of the proceedings is that the project the subject of the s 94 contribution is clearly one that is entirely derivative of the Roads and Traffic Authority and to that extent constitutes a State-initiated project. Evidently as the work is currently proceeding, it is fully funded by the Roads and Traffic Authority who also paid for the undertaking of the “review of environmental factors” and later the s 94 plan prepared by Connell Wagner. Now the works are proceeding and it is apparent that both design and construction are fully funded by the State.

With regard to this second issue, it appears that on the basis of some informal agreement as between the Council and the Roads and Traffic Authority, any funds deriving from the s 94 plan adopted by the Council would be transferred to the Roads and Traffic Authority. This approach seems only to be justifiable on the basis that the facility is predominantly for the benefit of regional, metropolitan and local Coffs Harbour traffic as was revealed by the evidence.

In a community newsletter published in August 1998 by the RTA the development of the interchange is referred to in the following statement:-

This project is fully funded by the NSW State government as part of the ten-year $2.2 billion Pacific Highway Upgrading Program.

It is accepted by the parties that the work to the highway at Coffs Harbour including the interchange would have been carried out as part of a programme of highway upgrading irrespective of the applicant’s development.

Basis for s94 contribution

7. Section 94(1) of the Act empowers a council to require a contribution in respect of a development. It provides:-

94 (1) Subject to subsection (2), if a consent authority is satisfied that a development, the subject of a development application or of an application for a complying development certificate, 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:

(a) the dedication of land free of cost, or

(b) the payment of a monetary contribution,

or both.

Section 94(2) of the Act requires the contribution imposed by council be reasonable. It provides:-

(2) A condition referred to in subsection (1) is to be imposed only to require a reasonable dedication or contribution for the provision, extension or augmentation of the public amenities and public services mentioned in that subsection.

Section 94(3) of the Act provides:-

(3) Subject to subsection (4), if:

(a) a consent authority has, at any time, whether before or after the date of commencement of this Part, provided public amenities or public services within the area in preparation for or to facilitate the carrying out of development in the area, and

(b) development, the subject of a development application or of an application for a complying development certificate, will, if carried out, benefit from the provision of those public amenities or public services,

the consent authority may grant consent to the application subject to a condition requiring the payment of a monetary contribution towards recoupment of the cost of providing the public amenities or public services.

Section 94(6) of the Act provides:-

94 (6) The consent authority is to hold any monetary contribution paid in accordance with the 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.”

8. Section 94(11) of the Act provides that a council may impose a condition requiring contribution only if it is of a kind allowed by, and is determined in accordance with a s94 contributions plan approved under s94B of the Act. Section 94B(1) provides:-

94B (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.

Part 4 of the Environmental Planning and Assessment Regulation 1994 (“the Regulations”) makes provisions for such plans. Significantly, reg26(1) relevantly provides:-

(1) A contributions plan must include particulars of the following:-

(a) - (f) not relevant

(g) 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.

9. In Allsands Pty Limited v Shoalhaven City Council (1992-93) 29 NSWLR 596; 78 LGERA 435 the New South Wales Court of Appeal considered s94 of the Act as the legislation then prevailed. It has now been altered but the concept was clearly established that the word “cost” and the term “recoupment of the cost” referred to in s94(2A) as it then existed (now embodied in s94(3)) meant the actual cost to council. Priestley JA at p608 said:-

Contribution towards recoupment of cost seems to me to be directed towards cost actually borne by the Council. Section 94 entitles the council as the provider of the amenity or service to impose conditions requiring contributions towards recoupment of the cost. In cases where, by arrangement with the government, the Council was never liable to anyone for payment of part of the cost of a work, the power to impose a condition requiring contribution towards recoupment of cost cannot be referrable to a cost not incurred by Council.

10. In Collin C Donges v Baulkham Hills Shire Council 67 LGRA 370 Stein J held that it was competent for a council to expend funds obtained from s94 contributions on roadworks carried out by the Department of Main Roads at council’s request. The decision was consistent with this Court’s earlier decision in Capital Quarries Pty Limited v Gunning Shire Council (NSWLEC No. 10544 of 1986) in which a council was held empowered to levy a s94 contribution in respect of repair, maintenance and construction of a main road, the responsibility for which was shared between a council and the Department of Main Roads as a consequence of the State Roads Act 1986.

Current legislative framework

11. The above decisions, whilst being of historical interest do not to my mind bear greatly on the circumstances of the present appeal in view of changes which have occurred to the Act and the Regulations. Allsands, Capital Quarries and Donges were determined before important amendments were made to s94. The Environmental Planning and Assessment (Contributions Plans) Amendment Act 1991 (Act No. 64 of 1991) commenced on 14 February 1992. It introduced new subsections, namely s94(7) and s94(8), and new sections namely 94AA, 94AB and 94AC. These provisions are reproduced in the current legislation (the Act) in similar terms and comprise sections 94(11), 94(12), 94A, 94B and 94C respectively. By virtue of such amendments a new concept was introduced namely the requirement of contributions plans. Subsequently the Environmental Planning and Assessment (Contributions Plans) Amendment Act 1992 (Act No. 89 of 1992) was enacted, and commenced on 16 December 1992. It amended s94(7) of the Act but it is not relevant to the present issue.

12. Section 94AB(5) of the amended Act (now contained in s94B of the Act) made provision for the regulations to be made in respect of the format, structure, subject matter and procedures for contributions plans to be the subject of regulations. Such regulations were initially contained in Part 4A of the Regulations, being inserted by Government Gazette 20 of 21 February 1992. Regulation 41F(g) was promulgated which is known as reg26(1)(g) in the current regulations.

Application of the current legislation

13. The findings of Senior Commissioner Jensen establish that the whole of the interchange construction is to be at the cost of the RTA. There is no evidence of any legal obligation whatsoever on part of council to reimburse the RTA for such works. The Contributions Plan does not incorporate the words which appear in the 1997 Draft plan suggesting that there would be repayment by council to the RTA in respect of any such works. Council is not providing amenities at its cost nor providing any amenities whatsoever.

14. The words contained in s94(3) of the Act which refer to the “ recoupment of the cost of providing the public amenities or services ” imply a cost to the council or the incurring of a liability. They are the same services “ provided by Council ” referred to in reg26(1)(g). In Bendixen v Coleman Scott and Croft (1943) 68 CLR 401, Latham CJ at p417 said of the word ‘cost’ in connection with liquor prices the subject of a National Security (Prices) Regulations:-

The only thing that has to be ascertained is what he has paid, or is liable to pay, for the liquor to the person from whom he buys it.

15. In Allsands the New South Wales Court of Appeal in its consideration of s94 emphasised that recoupment of cost envisaged by s94(2A) (now s94(3)) relates to the cost actually borne by the council as the provider of the amenity or service. The provisions of the current legislation reinforce such concept but in addition, provide for a strict regime to be followed by councils when acting in accordance with a contributions plan.

16. The Contributions Plan refers to the cost of the interchange but it is not a cost for which council is liable. If the position were as contended by council it would be entitled to levy contributions for services and amenities provided by third parties whether government or private, for which council would never be liable. Such result is obviously not envisaged by s94(3) of the Act nor reg26(1)(g) of the Regulations.

17. The council argues that the provisions of the Roads Act 1993 (Act No. 33 of 1993) which repealed the State Roads Act 1986 creates a joint liability between the council and the RTA for the highway. The council submits that there is an obligation on the part of council to maintain the highway including the interchange. The evidence however does not establish that the council will be liable for any cost, neither of construction nor of the maintenance of the subject works and there is no statutory provision imposing such liability.

18. In the absence of any evidence to suggest a legal liability on behalf of the council to pay for the relevant intersection or to share the costs thereof, the claim for s94 contribution does not comply with the requirements of s94(3) of the Act and of reg26(1)(g) of the Regulations and is accordingly invalid. The legislation does not entitle a council to levy any contribution pursuant to s94 in the circumstance that a council does not incur any liability for the provision of amenities or services.

Orders

19. The court orders:-

1. The appeal be upheld.

2. The question of law raised by the applicant and formulated as follows:-

“Is it lawful for the Respondent to prepare a contribution plan pursuant to section 94AB of the Environmental Planning and Assessment Act, 1979 in respect of work not provided by it?”
be answered in the negative .

3. Clause 7 of the Council consent of 7 May 1998 be deleted.

4. There be no order as to costs.

5. The exhibits be returned.