H & H DEVELOPMENTS (WA) NO 2 PTY LTD and WESTERN AUSTRALIAN PLANNING COMMISSION

[2024] WASAT 117

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL

ACT: PLANNING AND DEVELOPMENT ACT 2005 (WA)

CITATION:   H & H DEVELOPMENTS (WA) NO 2 PTY LTD and WESTERN AUSTRALIAN PLANNING COMMISSION [2024] WASAT 117

MEMBER:   JUDGE H JACKSON, DEPUTY PRESIDENT

MS R LAVERY, MEMBER

HEARD:   22, 23 MAY AND 23 JULY 2024

DELIVERED          :   24 OCTOBER 2024

FILE NO/S:   DR 110 of 2023

BETWEEN:   H & H DEVELOPMENTS (WA) NO 2 PTY LTD

Applicant

AND

WESTERN AUSTRALIAN PLANNING COMMISSION

Respondent

Catchwords:

Planning and development - Review of conditional approval of subdivision - Validity of condition - Condition requiring financial contribution to purchase of land for primary school - Whether condition imposed for planning purpose - Whether condition reasonably and fairly related to subdivision - Calculation method for contribution - Whether contribution is a tax

Legislation:

Metropolitan Region Scheme
Planning and Development Act 2005 (WA), s 135(1)(a), s 138(1), s 143(1)(c), s 241(1)(a), Pt 14
Shire of Mundaring Local Planning Scheme No. 4

Result:

The application for review is dismissed
The decision of the respondent is affirmed

Category:    B

Representation:

Counsel:

Applicant	:	J Skinner and B Foley
Respondent	:	AJ Carr and J Berson

Solicitors:

Applicant	:	Thomson Geer - Perth
Respondent	:	State Solicitor's Office

Case(s) referred to in decision(s):

Air Caledonie International v Commonwealth (1988) 165 CLR 462

Air Caledonie International v The Commonwealth [1988] HCA 61; (1988) 165 CLR 462

Airservices Australia v Canadian International Airlines Ltd [1999] HCA 62; (1999) 74 ALJR 76

Anketell South Investment Pty Ltd and Western Australian Planning Commission [2018] WASAT 100

Attorney General (NSW) v Homebush Flour Mills Ltd [1937] HCA 3; (1937) 56 CLR 390

Attorney General v Wilts United Dairies Ltd (1922) 38 TLR 781

Baulkham Hills Shire Council v Group Development Services Pty Ltd [2005] NSWCA 315

Carbone Bros Pty Ltd v Shire of Harvey [2014] WASC 284

Citta Hobart Pty Ltd v Cawthorn [2022] HCA 16; (2022) 276 CLR 216

Clive Elliott Jennings & Co Pty Ltd v Western Australian Planning Commission [2002] WASCA 276; 122 LGERA 433

Doma Pty Ltd v City of Hobart (1983) 52 LGRA 339

Falc Pty Ltd v State Planning Commission (1991) 5 WAR 522

Fletcher v Maroondah City Council [2006] VCAT 2205

General Practitioners Society v The Commonwealth [1980] HCA 30; (1980) 145 CLR 532

Hall and Company Ltd v Shoreham-by-Sea Urban District Council (1964) 1 WLR 240

Lloyd v Robinson (1962) 107 CLR 142

Macri v Western Australian Planning Commission [2014] WASC 153

Maroondah City Council v Fletcher [2009] VSCA 250; (2009) 29 VR 160; (2009) 169 LGERA 407

Matthews v Chicory Marketing Board (Vic) [1938] HCA 38; (1938) 60 CLR 263

Meriton Apartments Pty Ltd v Minister for Urban Affairs & Planning [2000] NSWLEC 20; 107 LGERA 363

Mutual Pools & Staff Pty Ltd v Federal Commissioner of Taxation [1992] HCA 4; (1992) 173 CLR 450

Newbury District Council v Secretary of State for the Environment [1981] AC 578

Perrymead Investments Pty Ltd v Western Australian Planning Commission (1996) 16 SR (WA) 181

Prendiville Superannuation Pty Ltd and Shire Of Dundas [No 2] [2024] WASAT 84

Reid v Western Australian Planning Commission [2016] WASCA 181

Ridgecity Holdings Pty Ltd and City of Albany [2006] WASAT 187

Rockdale Municipal Council v Tandel Corporation Pty Ltd (1975) 34 LGRA 196

Sharon Property Pty Ltd v The Presiding Member of the Metro Inner North Joint Development Assessment Panel [2022] WASC 332

The Commonwealth v Colonial Combing, Spinning and Weaving Co. Ltd (1922) 31 CLR 421

Tillbrook and Western Australian Planning Commission [2011] WASAT 130

Vanderstock v Victoria [2023] HCA 30; (2023) 98 ALJR 208

Western Australian Planning Commission v Temwood Holdings Pty Ltd [2004] HCA 63; (2004) 221 CLR 30

REASONS FOR DECISION OF THE TRIBUNAL:

Introduction

1. On 6 June 2023 the respondent (WAPC) granted conditional approval for the subdivision of part of what was then Lot 252 Helena Valley Road, Helena Valley (subject land) to create 13 residential lots (WAPC Ref: 163375) (subdivision approval).

2. Condition 16 of the subdivision approval requires the landowner to make a 'pro-rata cash contribution to the Department of Education (DoE) towards the provision of land for a primary school site(s) to serve the area, in accordance with the contribution methodology outlined in the [WAPC's] Operational Policy 2.4' (OP 2.4).

3. The respondent (H&H) seeks review of that condition.  Its case is, essentially, that the condition is invalid in that it does not satisfy any of the three limbs of the well accepted test for validity of conditions imposed on development approvals, sometimes known as the Newbury test.[1]

   [1] NewburyDistrict Council v Secretary of State for the Environment [1981] AC 578.

4. For the following reasons, we disagree.  Condition 16 is a valid condition of the subdivision approval and we find that the imposition of Condition 16 is the correct and preferable decision.

Subject Land

1. The subject land is formally identified as Lot 9000 on Deposited Plan 421765 Koorla Drive, Helena Valley.  It comprises an area of 8903m², is generally rectangular in shape and is bounded by undeveloped residential land to the east, vacant residential lots to the north, existing rural land to the west and part of Bush Forever site 213 to the south.

2. Lot 9000 is the undeveloped balance of a former parent lot (Lot 252 Helena Valley Road, Helena Valley - Lot 252), which was the subject of a previous subdivision approval granted on 20 December 2021.  The previous subdivision created the vacant residential lots to the north of the subject land referred to in the immediately preceding paragraph.

3. Prior to that previous subdivision, Lot 252 was predominately zoned Urban under the Metropolitan Region Scheme (MRS) and Development under the Shire of Mundaring Local Planning Scheme No.4 (LPS 4).

4. A small portion of that part of Lot 252 which now comprises the subject land was included within the Urban zone, but the majority was zoned Rural and Rural Residential under the MRS and LPS 4 respectively.  As a result of this, the subject land was proposed as a separate balance lot (Lot 9000) under the previous subdivision.

5. On 23 December 2022, the Rural zoned portion of what is now the subject land was rezoned Urban under the MRS (Am 1379/57), and the subject land was also concurrently rezoned under LPS 4 from Rural Residential to Development.

6. On 2 June 2021, WAPC approved the Helena Valley Local Structure Plan 76 (LSP 76).  That date predates that of Am 1379/57 by which the subject land was rezoned Urban.  LSP 76 does not, therefore, apply to that portion of the subject land that was the subject of Am 1379/57.

7. LSP 76 makes no provision for a primary school and the conditions imposed on the previous subdivision approval were equally silent.  It may be no more than speculation, but the apparent inconsistency in the approach in this regard may have informed H&H's challenge to Condition 16.

The Issues for Determination

1. We agree with the WAPC that the issue for determination is whether the correct and preferable decision is that the subdivision approval should be subject to Condition 16.[2]

   [2] Respondent's Statement of Issues, Facts and Contentions 24 November 2023, (WAPC's SIFC) para 6.

2. In its SIFC[3] H&H was critical of framing the issue in that way, saying that it 'significantly oversimplifies the matters to be determined and provides no guidance on how [the Tribunal is] to consider whether it is the correct and preferable decision to delete Condition 16'.  H&H contends that the following (which amended H&H's originally framed Issues per Orders made 5 April 2024) 'provides a more complete and preferable framing of the issues'.

   [3] Applicant's Response to the Respondent's Statement of Issues, Facts and Contentions, 22 December 2023, paras 2 and 3.

   Issue 1:Is the contribution methodology outlined in the Respondent's Operational Policy 2.4 (Dec 2022) based on sound planning principles.

   Issue 2:        Is there currently a sufficient area of land set aside for Government primary schools in the locality to accommodate the demand for Government primary school land generated by the proposed subdivision.

   Issue 3:        If the answer to Issue 2 is no, has the Respondent or Department of Education (DoE) purchased or disposed of any land within the locality for the purpose of a Government primary school.

   Issue 4:        If the answer to Issue 2 is no, has the Respondent identified within the planning framework any land within the locality to be set aside for the purpose of a new primary school required to accommodate the demand for Government primary school generated by the proposed subdivision.

   Issue 5:        If the answer to Issue 3 or 4 is yes, what is or what will the cost be to the Respondent or DoE to acquire the land that has been purchased or identified in the planning framework as required to accommodate the demand for a new Government primary school generated by the proposed subdivision.

   Issue 6:        If the answer to Issue 5 can be provided, what is timing for the proposed acquisition if the land is not already acquired.

   Issue 7:        If the answer to Issues 5 and 6 can be provided, what is the proportionate demand created by the proposed subdivision for any new land required for a new Government primary school site in the locality.

   Issue 8:        Is the contribution methodology outlined in the Respondents OP 2.4 and sought to be imposed via the imposition of Condition 16 legally unreasonable.

   Issue 9:        In light of the answers to Issues 1 - 8, is it the correct and preferable decision to impose Condition 16.

3. As will become clear through our reasons below, the framing of Issues 2 ‑ 7 assumes, in a manner favourable to H&H, the answer to various questions which, in our view, are open and which must be considered and answered, rather than assumed.

The locality

1. The parties were at odds as to the nature of the relevant locality.

2. In short, H&H's case, through the evidence of Mr Cake (an expert planning consultant),[4] was that the locality corresponds to the 'Local Intake Area' (LIA)[5] for two local primary schools - the Helena Valley Primary School (HVPS), constituted by the suburbs of Helena Valley and Boya[6] and Clayton View Primary School (CVPS), constituted by the suburb of Koongamia.[7]  It is fair to say, however, that his evidence, and H&H's case, focused on HVPC, as the subject land is located within its LIA.

   [4] Witness Statement of Reegan John Cake (Cake Statement), para 15.

   [5] The Local Intake Area is the area within which students have a right to attend the relevant State primary school.

   [6] Annexure RJC2 to the Cake Statement.

   [7] Annexure RJC5 to the Cake Statement.

3. In WAPC's SIFC, it contended that the locality covers a much larger area, including land located within the suburbs of Helena Valley, Bellevue, Koongamia and Bushmead.[8]

   [8] Respondent's Statement of Issues, Facts and Contentions, 24 November 2023, paras 14 - 16.

4. However, in her evidence, Ms Chan (who was called by WAPC to give expert planning evidence) provided for a locality of a reduced area which excludes Koongamia and Bellevue.[9]

   [9] Statement of Sarah Xin-Ren Chan, dated and filed 29 February 2024 (Chan Statement), Attachment SC 4.

5. The real points of difference between the parties are Bushmead and Koongamia/Bellevue.  As we will describe in more detail below, Mr Turnbull (who holds the position of Manager Land and Planning within the DoE and who was called by WAPC to give evidence) said that DoE has identified a site for a future primary school within an area known as Lot 912, located to the south of the current suburban development in Bushmead.

6. Mr Cake says that Bushmead does not form part of the relevant locality.  He says that Bushmead is governed by a different local government (City of Swan) to Helena Valley (City of Mundaring), that it is separated from the subject land by 'a sizeable area' of dense 'Bush Forever' and a tributary of the Helena River, and that it is located within the LIA of Maida Vale Primary School.

7. By contrast, he says that the LIA of CVPS (Bellevue and Koongamia) forms part of the locality,[10] notwithstanding, as Ms Chan points out, that school is located on the other side of the Helena River from the subject land, accessible only via the Scott Street bridge (having passed HVPS) or by Military Road bridge (post Roe Highway).[11]  It is also located within another local government area (the City of Kalamunda).

   [10] Cake Statement, paras 15 and 62.

   [11] Chan Statement, para 24.

8. It is uncontroversial that 'locality' is that area which affects, and is affected by, the development in question.[12]  In that sense, locality can shift and change depending on the issue being considered.[13]

   [12] Ridgecity Holdings Pty Ltd and City of Albany [2006] WASAT 187, [42].

   [13] ts 37, 22 May 2024 and ts 133, 23 May 2024.

9. In this case, we are concerned with the impact of the subdivision on the demand for places at 'local' primary schools.

10. In that sense, the planning concept of locality is different to the concept of an LIA, which simply amounts to an administrative decision as to the geographical area from which residents are entitled to send their children to the relevant primary school.

11. In our view, there is no reason why the relevant 'locality' should be limited to the LIA within which the subject land is located in any particular case.

12. The present case is a good example.  The subject land falls within the LIA of HVPS but is located at the far western end of the suburb of Helena Valley while HVPS is at the other (eastern) end.  Access to HVPS from the subject land will require a drive along almost the full length of Helena Valley Road, a distance of approximately 3km.[14]

    [14] Cake Statement, para 21.

13. By comparison, access from the subject site to any future Bushmead primary school located in Lot 912 would likely be via Midland Road[15] for a distance that will, by our estimation, be materially shorter.

    [15] ts 108, 22 May 2024 (per Mr Cake).

14. The reality is that if (and when) a Bushmead Primary School is created, it will have its own LIA which will, necessarily, take in some of the former LIA's of neighbouring schools, which may have further, 'knock on', effects on the LIA's other schools.

15. Mr Turnbull's evidence was to that effect and Mr Skinner accepted as much in his closing submissions.[16]

    [16] Turnbull Statement, paras 19 - 21; ts 75 - 76, 22 May 2024; ts 150, 23 May 2024.

16. In those circumstances, in our view, there is no reason why 'locality' should equate to an LIA.

17. We are satisfied that Roe Highway, and probably Midland Road, provide a logical eastern boundary to any locality in the relevant sense.  To the west of that boundary, however, it is difficult to be precise in the identification of locality boundaries.

18. However, in our view it is not necessary to be precise in that regard because we are satisfied, and we find, that the site of a future Bushmead primary school located within Lot 912 will be in sufficient proximity to, and be sufficiently accessible from, the subject land such that its provision will be relevant to the demand for primary school places generated by the subdivision.

19. Put another way, we are satisfied and we find that the future site of any Bushmead primary school within Lot 912 Midland Road is located within the 'locality' of the subject site for the purposes of this proceeding.

20. We are also satisfied, and we find, that CVPS does not form part of the locality for the purposes of these proceedings. In our view, its distance from the subject land (4.5km),[17] and the physical barrier of the Helena River separating it from the subject land (and which requires the crossing of one of the two bridges, neither of which could be described as 'convenient'), means children living within lots created by the subdivision are unlikely to represent a demand (at least a direct demand) for places at that school.

    [17] Cake Statement, para 62.

Brief Overview of the Parties' Cases

1. H&H's case is evident from its preferred list of Issues, set out above.

2. It submits that it should not be required to provide a contribution to the purchase of land for any new primary school in the locality unless the existing school within which's LIA the subject land is located (i.e. HVPS) lacks capacity to take any (additional) students who will live on the lots created by the approved subdivision.  That is, in effect, Issue 2.

3. It further submits that it is only if HVPS lacks sufficient capacity and a site has been identified in the planning regime within the locality for a new primary school that we should look to subdividers of land within the locality for a financial contribution towards such a site:  Issues 3 and 4.

4. Finally, it submits that the land identified in the planning scheme must have been valued and the timing for its acquisition known (Issues 5 and 6) and that it, as the subdivider, should only then be required to pay a contribution for the purchase of the new site proportionate to the demand contributed by the subdivision:  Issue 7.

5. By contrast, WAPC says that H&H's case errs by focusing on the situation at a particular school at a particular point in time.

6. Its case, in effect, is that:

   (a)all new lots will, at some stage, create a demand for one or more places in local primary schools;

   (b)experience in this State shows that appropriate educational outcomes require one (4ha) school per 1500 lots; and

   (c)the formula provided by Appendix 2 of OP 2.4 (the Formula) reflects those matters, whilst also providing for relevant exceptions, and there is no sound planning reason to depart from the provisions of the policy.

Planning Framework

1. The planning framework relevant to this matter includes:

   •Planning and Development Act 2005 (WA) (PD Act) - s 135(1)(a), s 138(1) and s 143(1)(c);

   •Metropolitan Region Scheme;

   •State Planning Policy 1.1 State Planning Framework (SPP 1.1);

   •State Planning Policy 3.6:  Infrastructure Contributions (SPP 3.6);

   •Operational Policy 1.1:  Subdivision of Land (OP 1.1);

   •Operational Policy 2.4:  Planning for school sites (OP 2.4);

   •Liveable Neighbourhoods;

   •Shire of Mundaring Local Planning Scheme No. 4 (LPS 4);

   •Helena Valley Local Structure Plan 76 (LSP 76); and

   •North-East Sub-regional Planning Framework (NESRPF, 2018).

2. It is useful to note the following in particular, which are relevant to the issues in dispute in this case.

3. The relevant provisions of the PD Act provide that it is an offence to subdivide a lot without the WAPC's approval, and that such approval may be subject to conditions.

4. It was uncontroversial that the power to impose conditions is not unfettered but, rather, is subject to the three-limb Newbury test so that, to be valid, a condition must be:

   (a)for a planning purpose and not for any ulterior purpose where a planning purpose is one that implements a planning policy whose scope is ascertained by reference to the relevant planning regime and not some pre-conceived notion of planning;[18]

   (b)one that reasonably and fairly relates to the development (in this case, subdivision) permitted; and

   (c)one that is not so unreasonable that no reasonable planning authority could have imposed it.[19]

   [18] Rockdale Municipal Council v Tandel Corporation Pty Ltd (1975) 34 LGRA 196, 204; approved by Bathurst City Council v PWC Properties Pty Ltd (1998) 195 CLR 566, [15].

   [19] Western Australian Planning Commission v Temwood Holdings Pty Ltd [2004] HCA 63; (2004) 221 CLR 30 (Temwood), [57]; Reid v Western Australian Planning Commission [2016] WASCA 181 (Reid) [27] - [35].

5. In this case the policy framework includes the following:

   (a)SPP 3.6 which provides:

   (i)At cl 3:

   … [t]he key principle in the application of infrastructure contributions is that the "beneficiary pays" …  Costs are apportioned proportional to the need for the infrastructure and facilities, and the demand generated by the development.

   (ii)At cl 6.3:

   … contributions can be sought from subdividers for "development infrastructure" (as opposed to "community infrastructure") without the need for a developer contribution plan;

   (iii)At cl 6.5:

   … such contributions may be satisfied by one or more of several methods including the ceding of land for, amongst other things, "primary school sites", and monetary contributions;

   (iv)At cl 6.8:

   Schedule 1 details the standard requirements for infrastructure contributions levied through the subdivision and development process, which includes 'land contributions for public open space, foreshore reserves, primary schools and roads'; and

   (v)Within Schedule 1:  Item 6 ('Primary Schools') describes 'Land for government primary schools' as the 'Standard Requirement' with the 'Delivery Method' being described as:

   As per the relevant Operational Policy for school site planning:

   -land (ceded free of cost to the State) or

   -pro-rata contribution by landowners via condition of subdivision.  Collection of contributions are coordinated through the Department of Education via the subdivision and development process and are not included in a DCP.

   (b)Clause 3.6.1 of OP 1.1 is headed 'Development contributions' and provides that 'WAPC may impose conditions requiring development contributions (including the ceding of land) for the provision of infrastructure and services which are necessary and relevant to the subdivision'.  It goes on to say that such contributions may take various forms, including the 'ceding of land for roads, public open space, primary school sites …' and 'monetary contributions to acquire land or undertake works …'.

   (c)OP 2.4 is the 'relevant Operational Policy for school site planning' referred to in Sch 1 of SPP 3.6.  It was approved by the WAPC in December 2022.  Amongst other things, it states that:

   (i)'All subdivisions and intensification of residential density create demand for, or on, a primary school, with this demand potentially extending beyond the boundaries of a structure plan or subdivision area':  cl 3.2.1 and 3.9.2;

   (ii)In general, one primary school (of 4ha size) should be provided for every 1500 dwellings: cll 3.2.1, 3.3.2 and 3.9.2;[20]

   [20] At cl 3.9.1 'dwelling' is said to be equivalent to a 'lot', for 'the purposes of this section'.

   (iii)The cost associated with the acquisition of land for a primary school will be 'apportioned equitably in accordance with the pro-rata contribution requirements outlined in Appendix 2' unless an exemption applies: cl 3.9.2 and cl 3.9.5;[21] and

   [21] There are three exemptions: subdivisions of less than 5 lots, balance lots and lots identified for aged/dependent persons developments.

   (iv)The Formula identified in Appendix 2 is as follows:

   (v)Exemptions to the general principle are provided, so that contributions are not required:

   i.for subdivisions that are not located within the Metropolitan, Peel or Greater Bunbury Region Schemes or an 'approved structure plan area';

   ii.for subdivisions which propose less than an additional five lots;

   iii.in relation to any 'balance' lots or lots which are identified for aged/dependent persons:

   cll 3.9.4 and 3.9.5.

   (vi)The subdivider is required to have the parent lot/s valued in accordance with the terms of Appendix 2 which will be 'used to generate the value of a notional [4ha] primary school site':  cl 3.9.6;

   (d)Liveable Neighbourhoods, most recently approved January 2009, also provides (Element 8 - Schools) that one primary school should be provided for every 1500 lots.  In doing so, it notes that in 1998 the WAPC 'amended its policy' from one school for 1200 - 1500 lots to one school for 1500 - 1800 lots.  That is a reference to DC 2.4, to which we refer below.  It continues by saying that:

   … [m]ore recently, this has resulted in larger than anticipated student populations on sites.  There is therefore, the need to reduce the ratio to an average of one primary school per 1500 lots.

   (e)Policy DC 2.4 (1998) provided (at cl 3.1.2) that one primary school site should be provided 'for between 1,500 and 1,800 housing units for government schools'.  At cl 3.3.7 it provided:

   In broadacre subdivision where the particular subdivision generates the need for a primary school the subdivider should provide for the ceding of the government primary school site free of cost.  Where land is in multiple ownership the subdividing landowners should provide a pro-rata contribution for the acquisition of the primary school site.

   The subdivision of Lot 252 occurred at a time when DC 2.4 was in force, rather than OP2.4.  For reasons not made clear to us, no contribution was required in relation to that subdivision.[22]

   [22] Chan Statement, para 32.

First Newbury test

1. In Tillbrook,[23] President Chaney referred to SPP 3.6 as well as DC 1.1 and DC 2.4 (the latter two of which have since been replaced by OP 1.1 and 2.4 respectively) and Liveable Neighbourhoods and said:

   Against the background of the PD Act and the planning policies set out above, a condition which requires a pro-rata contribution towards the costs of acquisition of a primary school site, where the lots created by the subdivision create a need for a primary school, is a condition imposed for a planning purpose.

   …

   There is a logical and obvious connection between the creation of residential lots in a greenfield site and a need for a primary school to service the locality created by the new subdivisions.  The fact that some of the eventual owners of lots may not choose to utilise the public primary school does not destroy that nexus.  The various policies outlined above reflect that connection and seek to address the planning issues which arise as a consequence.  As McHugh J noted in Temwood, a planning purpose is one that implements a planning policy whose scope is ascertained by reference to the legislation that confers planning functions on the authority. The PD Act contemplates the imposition of conditions requiring ceding of land for a public purpose. New subdivisions create a requirement for primary schooling in the locality. The policies adopted by the [WAPC] which seek to address a system of provision of necessary and appropriate school sites are, in my view, consistent with the scope of the PD Act.

   [23] Tillbrook and Western Australian Planning Commission [2011] WASAT 130, [32] – [34].

2. In Anketell,[24] delivered seven years later, the Tribunal held:

   … there has long been a policy framework that supports a requirement that residential subdivisions should contribute to the cost of a primary school site in proportion to the numbers of residential lots created: … The Tribunal has long held that this planning framework supports the imposition of a condition such as Condition 36 is a condition imposed for a proper planning purpose[.]

   [24] Anketell South Investment Pty Ltd and Western Australian Planning Commission [2018] WASAT 100, [92].

3. In the first quote, Chaney J held that a condition precedent to the finding that a subdivisional condition imposing a contribution to a primary school site is for a proper planning purpose is a factual finding that the subdivision will create a need for a primary school.

4. However, we do not understand him to require that the subdivision in and of itself will create the need for a primary school.  Rather, the passage suggests a finding is required that the subdivision will contribute to such a need.  So much follows, in our view, from his finding that the 'fact that some of the eventual owners of lots may not choose to utilise the public primary school does not destroy that nexus'.

5. To the same effect is the following from Redlich JA in Fletcher:

   In most cases, subdivisions create additional lots and thereby the potential for more intensive development and a need for additional public space.  It is the capacity for more intensive development that engages the requirement for more [Public Open Space - POS].  The fact that in some instances the capacity may not be utilised is not something that can necessarily be assessed at the time a subdivision is approved.  Critically, once a subdivision is approved, it is generally beyond the capacity of the responsible authority to obtain a POS contribution.[25]

   [25] Maroondah City Council v Fletcher [2009] VSCA 250; (2009) 29 VR 160; (2009) 169 LGERA 407 [222].

6. Consistent with those views, both Ms Chan and Mr Turnbull spoke, in their evidence, of the demographic changes that a locality will cycle through as a population ages, moves out and is replaced with new families so that, at some stage, it is likely that a family with school age children will inhabit the dwelling, even if that is not the case immediately or at all times.[26]  So much is consistent with everyday human experience.

   [26] Turnbull Statement, para 19; Chan Statement, para 62.

7. Consistent with such views OP 2.4, in effect, proceeds on the basis that all new lots created by a subdivision will increase the demand for places at local government primary schools, save for balance lots and lots identified for aged/dependent persons.

8. We are satisfied, and we find, that the evidence of Ms Chan and Mr Turnbull, consistent with human experience, provides a proper basis for that position.[27]

   [27] Mr Skinner said, in closing submissions, that he did not 'quibble' with the proposition:  ts 128, 23 May 2024.

9. We also find, specifically, that the particular subdivision at the heart of this proceeding will give rise to an increase in demand for places at local government primary schools.

10. Indeed, Mr Cake's evidence did not suggest otherwise.  His evidence was not that the proposed subdivision would not generate a demand for places at government primary schools.

11. Rather, he sought to minimise the extent of the demand (by using census data to create ratios between the number of dwellings and the number of primary school students)[28] and to suggest that the existing primary schools have sufficient capacity to absorb any demand created.

    [28] Cake Statement, paras 47 - 51, 58.

12. We will address the latter contention below.  We reject his evidence as to the former contention.  That is not to say that we reject the use of ratio's wholesale.  Mr Turnbull's evidence was that certain ratios were used in school planning.  But Mr Cake sought to use the ratio at a particular point in time whereas, consistent with the summary of evidence from Ms Chan and Mr Turnbull, and the passages from Tillbrook and Fletcher, we find that one should consider the demand generated more generally - to use Redlich JA's words, one should consider the 'capacity' created by the subdivision.

13. In light of our finding that the subdivision of the subject land increases demand for government primary school places, and given the extensive and coordinated policy support for the provision of development contributions from subdividers towards the purchase of land for local primary schools, we are satisfied and we find that Condition 16 was (and will be) imposed for a proper planning purpose.

14. Mr Cake's written evidence states that he accepts that:

    … there is a proper planning purpose behind the broad policy of imposing, as a condition on subdivision of residential land, a true pro‑rata contribution towards the actual cost of providing land for government primary school sites in any locality where the need actually arises.[29]

    [29] Cake Statement, para 111.

15. However, he goes on to raise certain concerns which are to the effect that Condition 16 has not been imposed for a proper planning purpose.  Those concerns are implicit in the above quote.  He says, in broad scope, that:

    (a)the subdivision will not give rise to the need for a new primary school;

    (b)the contribution calculus in OP 2.4 is flawed; and

    (c)OP 2.4 does not satisfy various aspects of SPP 3.6.

16. Mr Cake's concerns cut across each of the three limbs of the Newbury test.  We have already addressed the question of whether this particular subdivision will give rise to the need for a new primary school.  We will also deal with the two following concerns at this point:

    (a)his criticism that the Formula in OP 2.4 amounts to a tax because it is calculated on the value of the land being subdivided rather than the land value of the new school;[30]

    (b)his criticism of OP 2.4 to the effect that it is not based on sound planning principles.

The formula does not amount to a tax

[30] Cake Statement, para 139 ff.

1. Plainly, if the condition amounts to a tax, it cannot be said to be imposed for a planning purpose. It is on that basis that we address Mr Cake's contention at this stage.  We address H&H's legal submissions that Condition 16 imposes a tax below at Issue 8.

2. Mr Cake repeated his criticism several times that the contribution calculated by the Formula was a tax because it was calculated by reference to the value of the subdivided land, not the school site.

3. However, he does acknowledge (at para 140) that the same approach is adopted in relation to public open space, which appears to escape his criticism.

4. The difference, he says, is that in 'an existing or built-up area', the open space to be acquired or upgraded is 'already identified by the planning framework'.

5. He also says that in such areas 'either no POS contribution or a significantly reduced contribution is required to be paid'.

6. In our view, in this way, Mr Cake confuses and conflates two separate issues; the method of calculation and the identification of the land to be acquired.

7. For the following reasons, we are satisfied and we find that it is acceptable to calculate a contribution based on the value of the subdivided land.  Mr Cake's evidence, when analysed as we have done above, appears to support that view.

8. The issue whether the land to be acquired must be identified in the planning framework, and whether alternative arrangements should apply in established areas (as opposed to greenfields sites) are different questions.

9. We do not agree with Mr Cake's criticism of OP 2.4 for calculating contributions on the basis of the value of the subdivided land, rather than the land purchased, for the following reasons.

10. First, we note that OP 2.4, at cl 3.4.8 provides that a government primary school 'should be located centrally to the neighbourhood it is intended to serve'.

11. Accordingly, the land value of the school site should not be materially different ($/ha vacant land) to the land that it serves.  To the extent that there is a difference, OP 2.4 protects the subdividers of lower value land from paying at a higher rate.[31]

    [31] In this regard we agree with the observation to this effect of Ms Chan in her statement, at para [63].

12. Secondly, the Formula protects against dramatic changes in market value that occur between the time of subdivision and the time of valuing the school site, particularly where market changes are not reflected by the Consumer Price Index (CPI).[32]

    [32] As to the role of CPI in DC 2.4, see Tillbrook [40] - [41].

13. The reality is that there will always be a difference in time, with the potential for an associated difference in land values, between the acquisition of a school site and the subdivision of land which will generate demand for places at that school.

14. Thirdly, there will always be an associated danger that a subdivider will pay more or less than their 'true' share.

15. The situation that accrued in Tillbrook, where a site had been acquired at a known value, and subsequent subdividers were required to contribute to that known value is, perhaps, the easiest situation in which to ensure proportionality and equity.  But even there, difficulties can arise.

16. Significantly, in our view, Tillbrook should not be taken as requiring, in all cases, a degree of precision in the proportional relationship between the value of the school site and the contributions made by subdividers.

17. In Anketell, the Tribunal expressly held that that there was not a need for 'exactitude' before the condition can be said to 'reasonably and fairly relate' to the subdivision.[33]  We will return to this issue in our discussion of the second limb of the Newbury test, but in our view, the same principle applies here.

    [33] Anketell [95].

18. Fourthly, there is, inevitably, a tension in a policy that requires different subdividers to contribute to the purchase of a parcel of land over a period of time, between certainty and equity.  As noted above, the Formula provides certainty by calculating the contribution on the value of the subdivided land as at the time of subdivision.  The alternative, to place a value on the site and then ask subdividers to contribute towards it at different times, inevitably raises issues of equity due to changes over time in the value of land and the value of money.[34]  OP 2.4 favours certainty over equity.  That does not invalidate the policy.

    [34] Chan Statement, para 87.

19. While Redlich J in the following passage from Fletcher was concerned with the terms of a scheme rather than a policy, the passage is, in our view, equally apposite:[35]

    It is the very nature of a planning scheme that policy decisions be made and that these decisions be of general application.  The principle behind cl 52.01 was to adopt a policy of general effect.  The tribunal helpfully referred to the policy underlying the mandatory POS requirement in planning scheme expressed in these terms in Tucker v Mornington Peninsula Shire Council:[36]

    I think it is true that greater flexibility and more discretion enables what might be described as a more fine grained degree of equity than if the relevant statutory provisions allow less flexibility.  Of course, the ultimate in mathematical equity, or a descent to the finest distinctions, may lose reasonableness under layers of complication.  It is not for me to decide that the law is wrong in the balance it strikes between flexibility on the one hand and clarity and certainty on the other.

    [35] Fletcher, [219].

    [36] [2006] VCAT 1780, [68].

20. For these reasons we disagree with Mr Cake that the Formula creates a tax because it applies the value of the subdivided land, rather than the value of the school site.

Does OP 2.4 effect a proper planning purpose and is it based on sound planning principles

1. Mr Cake's evidence was to the effect that the Formula is inconsistent with the principles articulated in SPP 3.6 which, that policy says, should apply to policy provisions concerning infrastructure contributions and, therefore, the Formula is not imposed in pursuit of a proper planning purpose nor based on sound planning principles.[37]

   [37] Cake Statement, para 141.  We note that, in that way, Mr Cake's criticisms cut across both the first and second limbs of the Newbury test.

2. Before turning to the SPP 3.6 principles, it is worth noting that, while not explicit, the Formula appears to respond to the Tribunal's criticism of DC 4.2 in Tillbrook and Anketell.

3. In Tillbrook, a contribution rate ($/lot) had been established for an area of land where a major developer had ceded land for the purposes of a school.  The value of that land had, in that way, been established and it was then divided by the number of lots expected within the relevant area to generate the relevant $/lot contribution.  However, a later upzoning had effectively doubled the number of lots in certain parts of the relevant area with the result that, amongst other things, DoE would recover considerably more money than it had 'paid' for the school site.  The Tribunal struck down the condition and provided for its recalculation in respect of the subdivision in question.

4. In Anketell, the Tribunal held that the condition (which was not reproduced in the published reasons) was 'unascertainable in its current form'.  It held that DoE had been 'on notice' since 2011 that:

   … it is necessary for a condition requiring a contribution towards a school site to specifically identify the contribution required and/or the standard or formula from which the calculation will be arrived at, and to require a contribution that properly relates to the proposed subdivision.  Yet it appears nothing has been done to address those issues.  There is no public document or policy which identifies clearly how contributions to school sites will be calculated, nor is there any publication of the amount paid for a school site, or where it is not yet purchased, the valuation of the land identified for a school site. …  It would not have been necessary, and the Tribunal should not be taken as requiring, to identify the exact yield of lots within the relevant catchment area.  There is some room for estimation, as we are of the view that for the condition to reasonably and fairly relate will not require an unreasonable level of exactitude.  However, in this case, there was simply no attempt to make any assessment of the potential lot yield of a not insignificant area of land within the catchment area or, alternatively, identify some other basis for fairly and reasonably linking the proportionate cost of the schools site to the demand created by the proposed subdivision.[38]

   [38] Anketell [95]. Underlining added.

5. In our view, the Formula seeks to answer or address each of those criticisms.  The Formula clearly identifies how contributions will be calculated; the issue of the valuation of the school site is addressed, indirectly, by using the value of the subdivided land as a proxy and, equally, the question of lot yield is addressed by applying the ratio of 1 x 4ha school per 1500 lots.

6. We will now address, in turn, the principles expressed in cl 6.1 of SPP 3.6.

Need and the nexus:  The need for the infrastructure must be clearly demonstrated (need) and the connection between the development and the demand created should be clearly established (nexus)

1. Mr Cake's evidence is that OP 2.4 fails to ensure that there is a nexus between the proposed subdivision and the contribution required because, essentially, the Formula applies to all subdivisions.  He says that, before the Formula should apply, the Department should first ask:

   (a)can the demand generated by the proposed subdivision be accommodated within the existing primary schools; and

   (b)if not, has land been already acquired or identified and, either way, the value ascertained.

2. He says that only if those steps are taken can a true pro-rata understanding be reached between the proposed subdivision, the existing demand, and future demand generated by others.

3. The criticism made by Mr Cake in this regard concerns nexus - the requirement for a reasonable and fair relationship between the subdivision and the condition.

4. As such, the criticism of the general policy position enunciated in OP 2.4 somewhat misses the mark, in that its application must always be considered appropriate for the subdivision in question.

5. We accept, consistent with the principle in Falc[39] and Clive Elliott Jennings,[40] that the policy must not be inflexibly applied and, in relation to each application of the policy by way of subdivisional condition, there must be a reasonable and fair relationship between that condition and the subdivision in question.

   [39] Falc Pty Ltd v State Planning Commission (1991) 5 WAR 522.

   [40] Clive Elliott Jennings & Co Pty Ltd v Western Australian Planning Commission [2002] WASCA 276; 122 LGERA 433.

6. We will address that issue in relation to this subdivision below, under the heading 'Issue 2'.

7. But the requirement for such a relationship - a nexus - does not render the general principles enunciated in OP 2.4 or the Formula itself inappropriate or inapplicable.

8. As we have previously found, the policy adopted in OP 2.4 is that all new lots will, over their lifetime, contribute to demand for places in a primary school, which policy has both a proper experiential basis and is supported by authority.

9. Accordingly, we agree that, at least as a general proposition, it is inappropriate to look at the particular circumstances of demand for places at local primary schools at the time of subdivision.  To do so would mean that whether a subdivider pays a contribution will depend on the particular stage of the relevant demographic cycle.  Rather, there is a proper case to find that the creation of new lots, whenever created, will increase demand for places at the local primary schools.

10. Further, we are satisfied and we find that the ratio of one 4ha school per 1500 lots is based on sound empirical experience.

11. As noted in Liveable Neighbourhoods, the former policy DC 2.4 (in effect from 1998) applied a ratio of 1500 - 1800 lots per school.  Liveable Neighbourhoods notes that the application of that ratio led to school overcrowding.  The evidence of Ms Chan was to the same effect.[41]  Liveable Neighbourhoods provide for a new formula; 1500 lots per school, which is the same ratio as applied by the Formula.

    [41] Chan Statement, para 61.  See also paras 48 and 49 as to other inadequacies of DC 2.4 disclosed by the review which led to the development of OP 2.4.

1. As to the policy that contributions should be based on each new school being located on a site of 4ha in area, that policy has not changed since (at least) DC 2.4 was approved in 1998.[42]  We do not give any weight to Mr Cake's evidence that NSW provides for smaller sized schools.[43]  Amongst other things, he gave no evidence as to how the relevant document he attached to his statement 'fits in' with the NSW regime.[44]  Further, that policy provides for a built form of up to four storeys, which appears to be quite different to the experience of primary schools in this State.

   [42] DC 2.4, cl 3.3.1 - 3.3.2.

   [43] Cake Statement, para 132.

   [44] ts 113, 22 May 2024.

2. For these reasons, we are satisfied and we find that OP 2.4 is consistent with cl 6.1 of SPP 3.6's first principle:  as a general proposition it demonstrates a need for a new 4ha primary school for each 1500 lots.  The question of nexus must be determined at the time of subdivision by reference to the particular subdivision in question.

Transparency:  Both the method for calculating the infrastructure contribution and the manner in which it is applied should be clear, transparent, and simple to understand and administer

1. Mr Cake's evidence is that OP 2.4 does not explicitly state that, if paid, the financial contribution paid toward the cost of acquiring a primary school will be used to acquire land for that purpose within the locality.  He is also critical of the absence of provisions for the reporting of the total money raised, who has and has not paid and a mechanism to deal with disputes, refunds etc., if money is raised but not used to acquire land within the locality.[45]

   [45] Cake Statement, para 141, page 25.

2. Mr Cake is correct in this regard; OP 2.4 is silent as to those matters.

3. Mr Turnbull's evidence was to the effect that the DoE holds four accounts 'that correlate to each region scheme area and structure plan areas' and that funds are held in those accounts until they can be used and 'only for the purchase of primary school land' within the relevant area.[46]

   [46] Turnbull Statement, para 14.

4. We accept that the arrangement so described does not, of itself, prevent the cross-subsidisation which was the subject of criticism in Tillbrook.[47]

   [47] Tillbrook [50] - [51].

5. But that is not to say that there is any evidence before us that that is what will, or is likely to, occur in this case or otherwise.  The concerns raised by H&H and Mr Cake in this regard do not rise any higher than the theoretical, and, indeed, Mr Turnbull gave evidence at the hearing, which was not in his witness statement, to the effect that there were further, internal arrangements that isolate monies raised for particular schools identified by DoE.[48]

   [48] ts 43 - 44, 22 May 2024.

6. Furthermore, and of considerable significance, our role is to assess the validity of Condition 16.  It is the condition's validity which is in issue, not that of the policy.  We address Mr Cake's criticisms as to the SPP 3.6 principles in order to ensure that Condition 16 satisfies the three limbs of the Newbury test.

7. There was no suggestion that the 'method for calculating the infrastructure contribution' (i.e. the Formula) is not clear, transparent, and simple to understand and administer; we are satisfied and we find that it requires the subdivider to pay to the DoE an amount calculated by reference to clear, transparent and simple to understand formula.

8. In contrast, we accept that the terms of OP 2.4 do not clearly and transparently record how the Department is to administer the funds.

9. But that does not provide a basis for a finding that the condition is invalid.  In Lloyd v Robinson, the High Court (constituted by Kitto, Menzies and Owen JJ) upheld a condition requiring the ceding of land for public open space despite there being merely a 'moral obligation' but no 'legally enforceable obligation' to ensure that the land was so used.[49]  In Doma, Green CJ, having quoted at length from Lloyd v Robinson held that:

   But the actual use to which the money paid by the appellant was put cannot retroactively affect the validity of the condition under which it was paid.  The validity of the condition is to be resolved by an examination of the purpose for which the condition was imposed and, as … Lloyd v Robinson shows, the fact that the moneys were not thereafter impressed with a trust which had the effect of casting a legally enforceable obligation upon the respondent to effectuate that purpose does not necessarily invalidate the condition.[50]

   [49] Lloyd v Robinson (1962) 107 CLR 142, 155.

   [50] Doma Pty Ltd v City of Hobart (1983) 52 LGRA 339 (344).

10. We also acknowledge that, as a general proposition, that leaves open the potential for over- or under-subscribing for a particular school.

11. However, we repeat and endorse what was said in Anketell in a slightly different context:  'there is some room for estimation, as we are of the view that for the condition to reasonably and fairly relate will not require an unreasonable level of exactitude'.[51]

    [51] Anketell [95].

12. To be clear, we find that there can be no legitimate criticism of a policy that estimates, in effect, the cost of a future school site on a $/ha basis by reference to the $/ha value of land in the neighbourhood which the school will service and, in the absence of any evidence that such a process is likely to result in an over-contribution by subdividers in this particular case the theoretical possibility that that may occur does not persuade us that the condition has not been imposed for a planning purpose or, for that matter, that there is a lack of nexus between the condition and the subdivision.

Equity:  Infrastructure contributions should be levied equitably from identified stakeholders within a contribution area, based on the relative contribution to need

1. Mr Cake's criticism in this regard is that OP 2.4's contribution methodology is not based on 'contribution to need' which he says is the value of the land acquired for the school but, rather, on the undeveloped land value of the land to be subdivided.

2. For the reasons previously given, we disagree.

Certainty:  The scope, timing, and priority for delivering infrastructure items, and the cost of infrastructure contributions and methods of accounting for escalation, should be clearly identified

1. Mr Cake says that OP 2.4 makes no provision for any of these matters.

2. We agree that there is no provision in OP 2.4 as to the timing and priority for the delivery of relevant government primary schools but do not find that troubling.  In a document of such breadth, it would be very difficult to cover the various scenarios addressed by it.

3. We do not, however, agree that OP 2.4 lacks certainty as to the cost of infrastructure contributions and methods of accounting for escalation.  We are satisfied, and we find, that OP 2.4 is sufficiently clear as to how an infrastructure contribution for a particular subdivision is to be calculated and that it does so in a way that avoids the need for escalation (assuming that is a reference to rising costs) because the contribution is calculated on the value of the subdivided land at the time of subdivision.  The policy sets out in clear terms how the subdivided land is to be valued, and the Formula then applies that value in terms which are clear and simple.

4. Again, while the lack of certainty as to the timing and priority for the delivery of government primary schools leads to the theoretical possibility that contributions collected pursuant to OP 2.4 will not be used for a local primary school, there is no evidence before us that raises that risk above that of a theoretical possibility and, consistent with the authority of Lloyd v Robinson and Doma, that risk does not undermine the validity of Condition 16.

Efficiency:  Contribution should be justified on a whole-of-life capital cost basis consistent with maintaining financial discipline on service providers by precluding the over-recovery of costs

1. The concept of a 'whole of life capital costs' has limited application to the purchase of land.  To the extent that there is a concern with the over‑recovery of costs, we have addressed the issue above.

Consistency:  The system for infrastructure contributions for apportioning, collecting and spending contributions should be consistent, efficient and transparent

1. Again, Mr Cake's criticism of OP 2.4 is that it provides for contributions to be calculated on the basis of the value of the land to be subdivided.  For the reasons we have already discussed, we disagree with the criticism.

2. In our view, the Formula is clear, simple and easy to understand, it applies to all subdividers equally and it is efficient in that it applies to each subdivision as it arises with the subdivider providing a valuation of their own land.  We have already noted the limitations of the policy as to its provision for the spending of contributions, and our view that it does not impact on the validity of Condition 16, which we will not repeat.

Accountable:  That there is accountability in the manner in which infrastructure contributions are determined, collected and expended

1. Mr Cake contends that there is no provision or consideration of any of these matters in OP 2.4.  We disagree. OP 2.4 is clear as to the determination and collection of contributions.

2. We have previously acknowledged the limitations as to the expenditure of contributions, which we will not repeat.

Right of consultation and review:  Land owners and developers have the right to be consulted on the manner in which development contributions are determined, and the opportunity to seek a review by an independent third party regarding the calculation of costs, and return of funds

1. As Mr Cake acknowledges, the industry was consulted during the development of OP 2.4.  We have been provided with a copy of the submission made by the Urban Development Institute of Australia.[52]  Of course, consultation by Government does not require that it accept and implement the submissions received by it from various stakeholders.

   [52] Applicant's Bundle of Documents, 22 December 2023, page 1.

2. He also acknowledges that subdividers have the opportunity for review by an independent third party, which opportunity H&H has taken up by seeking review by the Tribunal of Condition 16 in these proceedings.

3. We note also that Appendix 2 to OP 2.4 provides a process for the resolution of disputes as to the valuation of the subdivided land.

4. Mr Cake notes that there is no opportunity to seek the return of funds should, for example, the school site not be purchased or there is an over‑contribution, which is a matter we have previously addressed.  We will not repeat ourselves in that regard.

Conclusions regarding OP 2.4

1. As we have previously noted, the general premise that subdividers should contribute to government primary schools on a pro-rata basis has been operable since at least 1998 when DC 2.4 was published.  That premise has been continued since December 2022 under OP 2.4.

2. It is true that DC 2.4 was subject to criticism, including in Tillbrook and Anketell.  It is also true that under DC 2.4 some subdivisions, including the 2021 subdivision of Lot 252, were not subject to the requirement to make financial contribution.

3. In our view, OP 2.4 addresses the criticisms made of DC 2.4 in Tillbrook and Anketell.  The policy proceeds on the basis, which in or view is grounded in common experience, that all residential subdivisions contribute towards demand for government primary schools, while excluding very small subdivisions (five lots and less) and those identified for aged/dependent persons from the requirement to contribute.

4. It also proceeds on the basis, grounded in long experience, that one 4ha school should ideally service 1500 lots/dwellings.  Both Liveable Neighbourhoods and Ms Chan's evidence support that number.

5. It also applies those principles in a simple, easy to understand and use formula.  On its face, there is some strength to the criticism of Mr Cake that the Formula applies the value of the land being subdivided, rather than the value of the school land but, as we have already noted, where the school site should be local to the community it serves, there ought not to be much difference on a vacant $/ha basis.  In that regard, we repeat that there is no requirement for precision.

6. Most significantly, and in answer to the criticisms of Tillbrook and Anketell, there is now no doubt as to when the policy applies and how contributions are calculated, and, to the extent that certainty is favoured over equity, that is a legitimate choice.

7. Finally, to the extent that OP 2.4 does not provide for when and how the money is to be spent, there is authority of the highest order to the effect that that does not undermine the validity of the condition.

8. For these reasons, we find that OP 2.4 effects a proper planning purpose and has its basis in sound planning principles.  It should therefore be accorded due weight.

Second limb of the Newbury test

1. The second Newbury test is whether the condition reasonably and fairly relates to the permitted subdivision.

2. The position taken by Mr Cake, and through him H&H, is reflected in Issues 2-7 detailed above.  In short, Mr Cake[53] says:

   (a)there is sufficient capacity in HVPC and CVPS to accommodate the demand for places generated by the subdivision of the subject land – Issue 2;

   (b)DoE previously disposed of land in the region set aside for a government primary school – Issue 3;

   (c)there is no land identified within the planning framework for the locality to be set aside for a new primary school – Issue 4;

   (d)[as a result], there is no certainty as to the cost or timing of acquiring the land necessary to accommodate the demand for a new primary school – Issues 5 and 6; and

   (e)therefore, the proportionate demand created by the proposed subdivision for any new land required for a new Government primary school site in the locality cannot be calculated – Issue 7.

   [53] Mr Cake's numbering is thrown out by his enumerating Issue 1 as both Issue 1 and 2.  Nothing turns on this save for some confusion in the headings.

3. We will deal with the issues in turn, first with Issue 2 and Issue 3 alone and, then, with Issues 4 - 7 together.

Issue 2

1. The starting point for H&H is its contention that HVPS (and, less relevantly, CVPS), as the primary school within which's LIA the subject site/subdivision is located, 'has more than sufficient capacity to accommodate the potential increase in demand over even a relatively long term'.[54]

   [54] ts 23, 22 May 2024.

2. Mr Cake undertook an analysis of the current capacity of both HVPS and CVPS.[55]

   [55] Given our finding that CVPS does not form part of the subject land's 'locality' because it will not (at least directly) absorb demand for primary school places generated by the subdivision, we do not consider it necessary to consider the issue of its capacity.  In any event, the focus of the evidence at the hearing was the capacity of HVPS given H&H's case that the real question must be the capacity of the school within the LIA of which the subdivided land is located.

3. There are many difficulties with his approach.

4. First, Mr Cake has qualifications in urban and regional planning.  He acknowledged in cross examination that he lacked any qualifications or experience in the field of education.[56]

   [56] ts 94, 22 May 2024.

5. Secondly, as we have already indicated, we do not accept that an assessment of a school's capacity at a point in time is valid.  Demographic change within the region served by a school will result in demand for places at that school rising and falling over time.  To assess demand at a particular point in time, which was the approach taken by Mr Cake, fallaciously fails to acknowledge that reality.

6. As we have already held, we accept as sound the approach taken by OP 2.4, which is that all new lots will, over time, generate demand for places at the local school and that each school (ideally 4ha in size) should service 1500 lots/dwellings.

7. Thirdly, there are aspects of Mr Cake's assessment with which we have considerable difficulty.  We will address only two concerning HVPS which, as we have said, was the focus of evidence at the hearing.

8. The first is his contention that the HVPS classroom occupied by the kindergarten class can (and presumably should) be vacated and made available for school children as: (1) 'Kindy' is not part of the compulsory education period; (2) it is not 'necessary' to provide Kindy at a government primary school; and (3) Kindy can be provided elsewhere at a child care centre subsidised by the Commonwealth government.[57]

   [57] Cake Statement, para 29 - 31.

9. The suggestion that the DoE should not provide a kindergarten class at HVPS and should require the families of 39 Kindy children[58] to make other (commercial) arrangements, so as to free up space in order to allow a commercial developer avoid making a contribution to critical community infrastructure is, in our view, remarkable and we reject it.  Amongst other things, as Mr Turnbull made clear in cross-examination, kindergarten does form part of the 'formal primary school intake'.[59]  In any event, regardless of the Kindy class, for reasons which follow, we find that HVPS is currently well in excess of its permanent built capacity.

   [58] There are 20 places taken by 39 children because kindergarten is also for half the week: ts 56, 22 May 2024.

   [59] ts 57 - 58, 22 May 2024. See s 77(a) of the School Education Act 1999 (WA).

10. The second aspect of Mr Cake's analysis with which we take issue is his approach to transportable/demountable classrooms.  He proceeds on the basis that it is acceptable to count the space provided at HVPS by existing transportable/demountable classrooms as 'capacity' and proposes that existing open space within the HVPS site be used for more such classrooms, thereby creating further 'capacity'.[60]

    [60] Cake Statement, paras 37 - 45.

11. The long-term use of transportable/demountable classrooms on the HVPS site[61] should not, in our view, be seen to artificially increase the capacity of the HVPS.

    [61] Cake Statement, para 39(a).

12. Rather, we are satisfied and we find that it highlights an existing shortfall in permanent built capacity at HVPS that has continued over a number of years.

13. Far from justifying H&H's position that the additional demand generated by the subdivision can be accommodated within HVPs' existing site (perhaps with additional temporary classrooms), in our view the use of transportable/demountable classrooms demonstrates overcrowding of an existing primary school which is, of itself, generating demand for additional permanent built capacity by the creation of a new primary school within the locality.

14. In our view it is a courageous proposition, and one with which we strongly disagree, that an existing primary school which is already over enrolled and relying on transportable/demountable classrooms to make up the additional accommodation required, should be further burdened by the additional demand generated by this subdivision.

15. In that regard we accept Mr Turnbull's evidence that overcrowding is likely to result in a sub-optimal education environment.[62]

    [62] Turnbull Statement, para 35.  Also, ts 48 - 49, 51, 22 May 2024.

16. Far from providing a basis upon which to find that H&H might avoid making a development contribution, in our view the extensive and long‑term use of demountable classrooms at HVPS provides a compelling basis for the opposite.

17. In the case of HVPS that situation is exacerbated by its relatively small size (2.9ha)[63] and otherwise constrained site.[64]

    [63] ts 72, 22 May 2024.

    [64] ts 51, 22 May 2024.

18. We accept Mr Turnbull's evidence that the built capacity of HVPS is 270 students, but it currently carries an enrolment of 317 students with the ability to do so the result of transportable/demountable classrooms.

19. But more relevant than the current enrolment, given the terms of OP 2.4 that there should be one 4ha school for every 1500 lots/dwellings, is Mr Turnbull's evidence that HVPS's LIA currently contains 1722 dwellings.[65]  Mr Cake, using the 2021 Census, calculated that there were 1917 dwellings in the HVPS's LIA.[66]

    [65] Turnbull Statement, para 15.

    [66] Cake Statement, para 48; ts 29, 22 May 2024.

1. For these reasons, we do not accept Mr Cake's evidence that HVPS has capacity to absorb the additional demand that will be generated by the subdivision the subject of these proceedings.  In our view, HVPS is already in excess of its capacity.

2. In addition, we find that there is considerable scope for further subdivisions that will place further pressure on the capacity of local primary schools.

3. Both Mr Cake and Ms Chan carried out an analysis of future development.  Mr Cake carried out separate analyses within each of the LIA's of HVPS, CVPS and Maida Vale Primary School, while Ms Chan undertook a global analysis for her, broader, 'locality'.

4. Given our previous views as to the locality, we prefer the approach taken by Ms Chan.  But in any event, Mr Cake's analysis of the HVPS's LIA was that that area contains a potential for an additional 172 lots without accounting for the land to the north and west of the LSP76 land, which he did not count.[67]  Ms Chan suggests that that land will yield a further 54 lots. Including those 54 lots will, without more, lead to a total of 1948 lots within the HVPS LIA, ~30% more than the 1500 lots per school anticipated by OP 2.4.

   [67] In cross-examination, Mr Cake agreed that it was reasonable to include the 'yield' from these lots; ts 102 - 103, 22 April 2024.

5. For all these reasons we do not accept H&H's position that HVPS currently has sufficient capacity to absorb the additional demand that will be generated by the subdivision of the subject land.  Rather, we are satisfied and we find that HVPS is already at excess capacity.

6. To the extent, therefore, that H&H submits that such existing capacity undermines any 'nexus' between the subdivision and Condition 16, we disagree.

Issue 3

1. Issue 3 is concerned with whether WAPC or DoE has purchased or disposed of any land within the locality for the purpose of a government primary school.  However, in our view the purpose or otherwise of any land is better addressed together with the question whether any land has been identified as a site for a new school ‑ Issue 4.  What follows under this heading is therefore limited to DoE's prior disposal of land.

2. In Mr Cake's written evidence he noted the closure and sale of the former Bellevue Primary School, located 2.8km to the north of the subject land, in the corner of Roe Highway, and the amalgamation of its catchment with the then Koongamia Primary School, which has since been renamed CVPS.

3. Mr Turnbull's unchallenged evidence was that the sale of Bellevue Primary School occurred in 2004, was facilitated by the conversion of a Crown Land title to Freehold title and was independent of any developer contribution provisions under the then applicable DC 2.4.

4. Significantly in our view, Mr Turnbull's evidence was also that as the school was located on a Crown Reserve, DoE was not the landowner and, as a result, the sale proceeds were not retained by DoE but, rather, were paid to Treasury's consolidated account in May 2004.

5. Although the argument was not really put, we accept that if DoE had retained funds from the sale of Bellevue Primary School there may have been an argument that such funds could and should have been put toward the acquisition of land for another primary school in the same general region, such that development contributions from subdividers could and perhaps should be reduced or avoided altogether.

6. We should not be taken by the preceding paragraph as expressing a matter of general principle.  Further, it should go without saying that each case must be decided on the basis of its own facts and circumstances, which in this case includes that the sale occurred more than 20 years ago.  But in this case, as DoE was not the owner of the site and did not retain the funds, we need not address the argument.

7. In our view, the issue does no more than illustrate how the demographics of an area will change over time with a resulting need for DoE to monitor the same.  We are satisfied and we find that the previous sale of Bellevue Primary School does not assist either way in our resolution of the question whether there is, or is not, a 'nexus' between the subdivision and Condition 16.[68]

Issues 4 - 7

[68] In cross-examination, Mr Cake, in effect, accepted that this was so: ts 117, 22 May 2024.

1. Issue 4 is whether WAPC has identified within the planning framework any land within the locality to be set aside for the purpose of a new primary school to accommodate the demand generated by the subdivision.  Issues 5 and 6 concern the cost and timing of the acquisition of a site, should it be identified.  Issue 7 is concerned with the proportionate demand created by the proposed subdivision so that, as we understand H&H's case, the subdivider pays only for the pro rata'd proportion of the acquisition cost.

2. It is uncontroversial that the relevant planning framework, including structure plans, does not identify any site to be set aside for the purpose of a new primary school that might service the demand generated by the subdivision.

3. Mr Cake's evidence is that no land has been purchased 'for which any contribution paid would be allocated toward'.[69]  Again, that evidence is uncontroversial.

   [69] Cake Statement, para 149.

4. However, Mr Turnbull's unchallenged evidence was that a site for a future primary school has been identified and allocated by the DoE in negotiations with DevelopmentWA within the Bushmead structure plan area, although the draft structure plan for this area has not yet been released.[70]

   [70] Turnbull Statement, para 29.

5. Ms Chan's evidence was that she understood DoE had 'preliminarily identified a site … near the Bushmead development at Lot 912 Midland Road'.  But the site 'has not been acquired or finalised'.[71]

   [71] Chan Statement, para 74.

6. Mr Turnbull said that 'given DevelopmentWA is the State Government's key developer and has acquired Lot 912 there is certainty as to the development proceeding'.[72]  He also said that:

   (a)the future site will be ceded to DoE as a condition of subdivisional approval and that DevelopmentWA's contribution will be based on the number of lots to be created, applying the Formula which applies to all subdividers; and[73]

   (b)the timing of the site's acquisition will be influenced by a number of factors including the extent of future development and the resulting pressures on neighbouring primary schools.[74]

   [72] Turnbull Statement, para 30.

   [73] Turnbull Statement, para 32.

   [74] Turnbull Statement, para 33.

7. Mr Turnbull's evidence was that what has occurred in this case is not unusual.  He said that it was normal for DoE to consider the issue of primary school sites at the pre-referral stage when draft or concept plans are being prepared by a developer and recommend/request that a future primary school site is allocated in the future structure plan.[75]

   [75] ts 45, 22 May 2024.  Also, Chan Statement, paras 76 - 77.

8. We have previously found both that the proposed subdivision will generate demand for places in local primary schools and that the site identified by DoE the subject of evidence from Mr Turnbull and Ms Chan is sufficiently proximate to play a role in absorbing at least some of that demand.

9. We have also previously found that:

   (a)the relevant policy framework provides for the imposition of conditions on subdivisional approval by which the subdivider is obliged to contribute to the cost of buying land for government primary schools; and

   (b)there is a proper factual basis for the Formula by which OP 2.4 provides for the calculation of such contributions.

10. In such circumstances, we are satisfied that there is a reasonable and fair relationship between the subdivision and Condition 16, which requires a financial contribution to be made to the provision of a local primary school (one to 'serve the area') as calculated in accordance with OP 2.4.

11. For the reasons that follow we are satisfied, and we find, that that conclusion is not undermined by:

    (a)the fact that the site for a future primary school has not yet been acquired;

    (b)the fact that the site is not yet indicated in the planning framework; and

    (c)the timeframe for its inclusion in the planning framework, or for its acquisition, is not known with any precision.

12. There is nothing in any of the policy documents, nor anything in the way of principle or prior authority, which requires either the prior purchase of a piece of land or its identification in the planning framework for the purposes of a primary school as a condition precedent to either:

    (a)the imposition of a subdivisional condition requiring the payment of a financial contribution towards the cost of such land; or

    (b)a finding that there is a nexus – a reasonable and fair relationship – between the subdivision and a condition requiring a financial contribution toward the purchase of a site.[76]

    [76] Mr Cake agreed with this proposition in cross-examination: ts 88, 22 May 2024.  In Closing Submissions, Mr Skinner submitted that it was not H&H's case that it was 'essential' that a new school site be identified in the planning framework before a contribution may be required:  ts 126, 23 May 2024.

13. The real substance of Mr Cake's evidence and H&H's case is that, in the absence of a definitive site for a new school, which has been valued, and an understanding of the extent to which the subdivision will generate actual, rather than theoretical, demand for places at the new school, we can have no comfort that the amount calculated under the Formula will be 'proportionate'.

14. We have already made relevant findings as to the factual bases for each of the relevant elements of the Formula – a site of 4ha, one school per 1500 lots, the contribution calculated based on the value of the subdivided land.

15. It is worth repeating that the second limb of the Newbury test requires only that there be a reasonable and fair relationship between the planning purpose for which the condition of subdivision is imposed and the likely or possible consequences of the proposed subdivision.[77]

    [77] Temwood [57]; Reid [28].

16. In that regard, we are satisfied, and we find, that it is not necessary that the relevant consequences, which in this case is the demand generated by the subdivision, are immediate or that that demand is able to be precisely identified.

17. As to precision, we repeat a portion of the reasons of the Tribunal in Anketell quoted above[78] that there is no need:

    … to identify the exact yield of lots within the relevant catchment areas.  There is some room for estimation, as we are of the view that for the condition to reasonably and fairly relate will not require an unreasonable level of exactitude.[79]

    [78] Anketell [93] - [95].

    [79] See, also, Prendiville Superannuation Pty Ltd and Shire Of Dundas [No 2] [2024] WASAT 84 (Prendiville) [57] - [58].

18. In Perrymead, the Tribunal held that the nexus between a condition and a subdivision will be established if the condition:

    … fairly and reasonably relates to the subdivision not that it springs directly from the needs produced by the development … It is sufficient if the condition can be said to reasonably arise from the fact of the subdivision.[80]

    [80] Perrymead Investments Pty Ltd v Western Australian Planning Commission (1996) 16 SR (WA) 181, 186, cited with approval in Carbone Bros Pty Ltd v Shire of Harvey [2014] WASC 284 (Carbone) [43].

19. It is also worthwhile noting the comments of Solomon J in Sharon Property[81] albeit in a different context.  His Honour criticised the appellant in that case for taking an 'overly legalistic' approach, saying:

    The approach lacks the pragmatic and common-sense approach urged by the authorities in a review of the decision of a specialist tribunal.  Such an approach risks inspiring the attendance at all such reviews of statisticians and actuarial consultants, laden with logarithms and layered spreadsheets to ensure that the degree of impact is quantified by some means.  It invites the triumph of high-tech sophistry over sensible human evaluation.

    [81] Sharon Property Pty Ltd v The Presiding Member of the Metro Inner North Joint Development Assessment Panel [2022] WASC 332 [216].

20. As to immediacy, we have already upheld the policy position adopted by OP 2.4 that all new residential lots will increase demand for places in local primary schools, notwithstanding that that demand may not arise for some time.

21. As such, the policy position that there should be one (4ha) school per 1500 lots acknowledges and works with the demographic change that will inevitably occur within a locality over time.

22. In our view it is entirely appropriate for the WAPC and DoE to take a long-term view and not be limited in their planning to the immediate consequences of a subdivision.  In Macri Kenneth Martin J held that it is inherent in the nature of a planning body that it must undertake a 'prospective consideration of matters that may arise in the future'.[82]

Conclusion as to second limb of the Newbury test

[82] Macri v Western Australian Planning Commission [2014] WASC 153, [43].

1. For these reasons, we are satisfied and we find that Condition 16 reasonably and fairly relates to the proposed subdivision and the second limb of the Newbury test is therefore satisfied.

Third limb of the Newbury test – Issue 8

1. It is H&H's case that Condition 16 is invalid as it is 'legally unreasonable' in the sense of that term used in the third limb of the Newbury test.

2. For the reasons set out in Prendiville,[83] a claim of legal unreasonableness in that sense:

   … requires a careful evaluation of the evidence within the particular factual context of the proposed development.  If, having carried out such an examination, the conclusion is that the condition could not have been imposed 'if proper reasoning had been applied', then the condition is invalid as being unreasonable.[84]

   [83] Prendiville [72] - [77].

   [84] H&H's Submissions (29 April 2024 at para 8), rather curiously, assert that because our role is one of merits review, the relevant question must be whether the condition 'should' be imposed not whether it 'could'.  That is, ultimately, the question posed by merits review, which is why we have framed the primary issue in this case as whether it is the correct and preferable decision to impose Condition 16.  But the merits review context does not change the nature of the third limb of the Newbury test.  That remains one of legal unreasonableness, which is whether it is permissible to impose the condition - 'could' rather than 'should'.

3. H&H's case in this regard is twofold.  First, it effectively uses this ground to reiterate its concerns with the methodology of OP 2.4, arguing that it amounts to an arbitrary policy because there is no 'justification for the school site size, or the catchment population'.[85]  That is, it uses the third limb of Newbury test to reiterate issues that we have already addressed in the preceding reasons.[86]  It is not necessary that we do so again.[87]

   [85] Applicant's Outline of Submissions and List of Authorities in Respect of Issue 8 of the Applicant's Statement of Issues, Facts and Contentions as Amended on 5 April 2024, 29 April 2024, para 28.

   [86] See, also Applicant's Response to the Respondent's Outline of Submissions and List of Authorities in Respect of Issue 8 dated and filed 13 May 2024, 31 May 2024, para 40.

   [87] In that regard we note the query of Callinan J in Temwood as to whether the third limb adds much of the first and second limbs at [155].

4. The second basis on which H&H asserts that Condition 16 is legally unreasonable is because, it is submitted, the contribution amounts to a tax.

5. Such an assertion falls outside the conception of legal unreasonableness as described in Prendiville referred to above.  Nonetheless, as WAPC rightly conceded, if the contribution is a tax, it is invalid as the PD Act makes no provision for the raising of a tax, contrary to the principle in WiltsDairies.[88]

   [88] Attorney General v Wilts United Dairies Ltd (1922) 38 TLR 781, 782 (Wilts Dairies); applied in The Commonwealth v Colonial Combing, Spinning and Weaving Co. Ltd (1922) 31 CLR 421.

6. It is necessary to note that H&H's case in this regard was, initially, that the imposition of the condition in question amounts to the imposition of a duty of excise.[89]

   [89] Applicant's Outline of Submissions and List of Authorities in Respect of Issue 8 of the Applicant's Statement of Issues, Facts and Contentions as Amended on 5 April 2024, 29 April 2024, paras 13 - 23.

7. However, following the adjournment of the hearing after the second day, and the filing of further written submissions on this point from both parties,[90] the third day of hearing proceeded on the narrower question as to whether the contribution amounted to a tax.

   [90] Applicant's Response to the Respondent's Outline of Submissions and List of Authorities in Respect of Issue 8 of the Applicant's Statement of Issues, Facts and Contentions as Amended on 5 April 2024, 31 May 2024; Respondent's Supplementary Outline of Submissions and List of Authorities in Respect of Issue 8, dated and filed 14 June 2024.

8. As a result, it is unnecessary to address the excise question.[91]  Nonetheless, given the resources which were put to that issue, we will give our answer:  we are satisfied and we find that the contribution required by Condition 16 does not amount to an excise because an excise is a tax on goods[92] and Condition 16 is imposed on an approval for the subdivision of land, which is not goods.[93]

   [91] The question whether the condition imposes an excise raises questions going to federal jurisdiction because s 90 of the Commonwealth Constitution provides the Federal Parliament with exclusive power to impose duties of excise. To the extent that we have expressed a view in this regard, we have done so only for the purpose of ensuring that we have jurisdiction to determine (by the exercise of administrative power) the substantive matter before us: Citta Hobart Pty Ltd v Cawthorn [2022] HCA 16; (2022) 276 CLR 216, [24]. The same issue does not appear to arise in the determination of the issue as to whether the condition imposes a tax, as that question has an even more fundamental basis per Wilts Dairies. But to the extent that we are wrong, and the issue does arise under the Constitution, our decision is similarly limited.

   [92] Vanderstock v Victoria [2023] HCA 30; (2023) 98 ALJR 208 Vanderstock), [127] (Kiefel CJ, Gageler and Gleeson JJ); see, also, [201] (Gordon J).

   [93] Mutual Pools & Staff Pty Ltd v Federal Commissioner of Taxation [1992] HCA 4; (1992) 173 CLR 450, 467 (Dawson, Toohey and Gaudron JJ) and 454 (Mason CJ, Brennan and McHugh JJ). See, also, Vanderstock, [141] in which goods are described as 'tangible personal property'. In that regard the obvious contrast is with real property; i.e. land.

9. As to whether the condition amounts to a 'tax', it is useful to commence with the seminal definition of a tax by Latham CJ in Matthews[94] as 'a compulsory exaction of money by a public authority for public purposes, enforceable by law, and is not a payment for services rendered'.

   [94] Matthews v Chicory Marketing Board (Vic) [1938] HCA 38; (1938) 60 CLR 263, 276.

10. A subsequent full bench of seven High Court justices in Air Caledonie described that statement as non-exhaustive.[95]  But nothing in that case, or anything since then, has suggested that a payment may be a tax if it is not a 'compulsory exaction of money by a public authority'.

    [95] Air Caledonie International v The Commonwealth [1988] HCA 61; (1988) 165 CLR 462, 467.

11. That is, there may be instances where a 'compulsory exaction of money by a public authority' may not be a tax, but it has not been suggested that a non-compulsory exaction of money by a public authority might be a tax.

12. So much was agreed by the parties, with Mr Foley, who appeared for H&H in this regard, expressly accepting the proposition during the hearing.[96]

    [96] ts 7, 23 July 2024.

13. Both parties also agreed that the relevant compulsion may be 'practical', as opposed to 'legal', but they disagreed as to whether or not there was any practical compulsion in this case.

1. We accept that practical compulsion may be sufficient to satisfy that element of the 'definition' of a tax.[97]

   [97] General Practitioners Society v The Commonwealth [1980] HCA 30; (1980) 145 CLR 532, 561 and 568.

2. We also accept the WAPC's submissions that the authorities make clear that what amounts to 'practical compulsion' must be such that there is 'no real choice' but to make the payment in question.[98]  In Homebush, Latham CJ described the relevant statutory regime, which did not provide for legal compulsion but the effect of which was practical compulsion, as providing a choice that was 'quite illusory'.[99]

   [98] Respondent's Supplementary Outline of Submissions and List of Authorities in Respect of Issue 8, dated and filed 14 June 2024, para [18].

   [99] Attorney General (NSW) v Homebush Flour Mills Ltd [1937] HCA 3; (1937) 56 CLR 390, 399 - 400.

3. Consistent with that description is Gaudron J's statement in Airservices[100] that if money was to be exacted by a public sector monopoly, 'the charge inevitably involved practical if not legal compulsion'.

   [100] Airservices Australia v Canadian International AirlinesLtd [1999] HCA 62; (1999) 74 ALJR 76, 99 [132].

4. There have been several attempts by litigants to persuade various Australian courts and tribunals that conditions imposed on subdivisional or development approval which require the ceding of land or the payment of money amount to a tax.[101]

   [101] We agree with the reasons of Green CJ (at 344) and Cosgrove J (at 357) in Doma that there can be no relevant distinction between a condition which requires the ceding of land and one which requires the payment of money.

5. But H&H did not cite to us a single case in which the landowner has succeeded in such an argument and we are not aware of any other that has done so.

6. The reasons courts and tribunals have given for refusing to find that such contributions amount to a tax usually include that the contribution was not compulsory.  What follows is a brief review of cases.  It is not intended to be exhaustive and focuses on decisions of courts of intermediate appeal and the High Court.

7. In Lloyd v Robinson,[102] an appeal from the WA Supreme Court, a challenge was made to a condition imposed on subdivisional approval requiring the ceding of land for public open space.  In a passage often since repeated, the High Court held:

   Given the necessary relevance of the conditions to the particular step which the Board is asked to approve, there is no foothold for any argument based on the general principle against construing statutes as enabling private property to be expropriated without compensation.  The Act at its commencement took away the proprietary right to subdivide without approval, and it gave no compensation for the loss.  But it enabled landowners to obtain approval by complying with any conditions which might be imposed, that is to say which might be imposed bona fide within limits which, though not specified in the Act, were indicated by the nature of the purposes for which the Board was entrusted with the relevant discretion: [citations omitted]  If approval is obtained for the subdivision of one area of land by complying with a condition which requires the giving up of another area of land for purposes relevant to the subdivision of the first, it is a misuse of terms to say that there has been a confiscation of the second.  For the giving up of the second a quid pro quo is received, namely the restored right to subdivide the first.  It may be that the quid pro quo is inadequate, and that the landowner, though under no legal compulsion to give up the second area of land if he chooses to forego the idea of subdividing the first, is nevertheless under some real compulsion, in a practical sense, to submit to the loss of it because of the importance to him of obtaining the approval.  But there is no room for reading the Act down in some fashion by appealing to a principle of construction that has to do with confiscation.  If the Board has performed its statutory duty by giving approval to the subdivision subject only to conditions imposed in good faith and not with a view of achieving ends or objects extraneous to the purposes for which the discretion exists, the inescapable effect of the Act is that the landowner must decide for himself whether the right to subdivide will be bought too dearly at the price of complying with the conditions.[103]

   [102] Lloyd v Robinson (1962) 107 CLR 142, 154.

   [103] Underlining added.

8. While that passage raises the possibility that the landowner may be under a 'real compulsion, in a practical sense', the final words of the quoted passage clearly enunciate the Court's view that, at all times, the landowner retains a choice whether or not to proceed with subdivision including once approval is obtained.

9. Mr Foley submitted that the decision in Lloyd v Robinson is limited to the issue whether the ceding of land amounted to a compulsory acquisition without compensation.[104]

   [104] ts 12, 23 July 2024.

10. The authorised report notes that in argument the respondents (the landowners) submitted that the conditions 'impose a form of taxation' contrary to the principle in Wilts Dairies.  The appellants conceded that, if the condition amounted to a tax, the conditions were ultra vires but submitted that 'there is a difference between a condition which imposes a price but which is in no way related to the purpose of the power and a condition which involves a burden being placed upon a person which permits him then to do an act which would otherwise be prohibited, the burden being related to the purpose for which the prohibition is raised'.[105]

    [105] Lloyd v Robinson (1962) 107 CLR 142, 145 - 146.

11. In our view, the above quoted passage from the decision (at para 213) was clearly addressing that issue.  Consistent with that view, Jenkins J in Carbone held, relying on much of the above quoted passage, that in Lloyd v Robinson the High Court held that the condition 'was valid (and, incidentally, was not a form of taxation)'.[106]  And, as is evident from what follows, other courts have applied the above passage in their reasons for finding that such conditions do not amount to a tax both because such a condition lacks compulsion and because such a condition amounts to the price paid for the right to subdivide.

    [106] Carbone Bros Pty Ltd v Shire of Harvey [2014] WASC 284, [40] (Carbone).

12. The Tasmanian Full Court's decision in Doma[107] concerned a condition on a building approval which required the payment of cash in lieu of the provision of parking spaces.  Doma Pty Ltd argued that the condition amounted to a tax.  Cosgrove J summarised its first ground of appeal as follows:[108]

    [Doma] contends that those powers do not permit the imposition of a fiscal condition or monetary levy.  The [City, Doma] argues, could only acquire such a power by virtue of an expressed statutory grant.

    [107] Doma (343) - (344).

    [108] Doma (351). See, also (342) (Green CJ).

13. Both Cosgrove J and Green CJ held the condition valid.  Cosgrove J held:

    The nature of the condition here reviewed effected no fundamental alteration in the general law.  It was not a tax.  It did not require payment.  The appellant had no right to develop without consent.  It need not develop in the particular (apparently unsatisfactory) way in which it proposed.  To quote Willmer L.J.[109] again (at 248):

    "the statute in question here does to my mind clearly and unambiguously authorize the imposition of conditions which will necessarily interfere with an owner's right of property".

    The condition effectuated less interference with those rights than a prohibition which was clearly within power.[110]

    [109] Hall and Company Ltd v Shoreham-by-Sea Urban District Council (1964) 1 WLR 240.

    [110] Doma (354) - (355).  Underlining added.

14. Mr Foley submitted that the above quoted passage from Cosgrove J was 'incorrect'.[111]  In doing so, he appears to have assumed that his Honour failed to appreciate the difference between legal and practical compulsion.

    [111] Applicant's Response to the Respondent's Outline of Submissions and List of Authorities in Respect of Issue 8 dated and filed 13 May 2024, 31 May 2024, para [17(f)].

15. There does not appear to be any basis for that assumption.  Rather, the underlined sections of the passage quoted above make very clear that Cosgrove J was following the approach taken by the Court in Lloyd v Robinson - there is no obligation to subdivide the land and it is for the landowner to decide (i.e. there is a choice) whether the contribution required is a 'price' too high to pay.  In our view, his Honour's quoting of Willmer LJ in Hall also references the principle that a contribution will not be a tax if there is a discernable relationship with the right thereby obtained (i.e. the right to subdivide).

16. Green CJ  put it this way:

    I do not accept the appellant's submission that any condition imposed by the respondent under s 734 which require the payment of money would necessarily be ultra vires.[112] … It may be the case that as Else Mitchell J observed in Jumal Developments Pty Ltd v Parramatta City Council (1969) 17 LGRA 111 at 113:

    "The levy of money as a condition of the exercise of a statutory discretion has always been regarded as suspect because it need not necessarily be related to the lawful exercise of the power conferred so that it assumes the character of an exaction of tax."

    But that is not to say that such a condition is necessarily invalid and in the end the same principles are applicable to the determination of the validity of conditions involving the payment of money as are applicable to the determination of the validity of any other conditions.[113]

    [112] Mr Foley's submissions included that '[H&H] is not running an argument that because the condition requires the payment of money, it is ultra vires':  Applicant's Response to the Respondent's Outline of Submissions and List of Authorities in Respect of Issue 8 dated and filed 13 May 2024, 31 May 2024, para [17(b)].  In the quoted passage, Green CJ is clearly answering Doma's first ground that a 'fiscal condition or monetary levy' is impermissible without express statutory authority, i.e. it is a tax which cannot be imposed without express Parliamentary authority.

    [113] See, also, Nettlefold J at 350 who accepted that 'it is not possible to state a priori that all conditions involving a money payment lack validity. In each case questions of degree, and hence of fact, and characterisation inevitably arise'.

17. In Meriton[114] Cowdroy J addressed the claim that development contributions aimed at the provision of 'affordable housing', and required by condition on subdivisional approval pursuant to a Local Environmental Plan for an area (Green Square) which included the subject land, amounted to a tax.

    [114] Meriton Apartments Pty Ltd v Minister for Urban Affairs & Planning [2000] NSWLEC 20; 107 LGERA 363, 377 - 379.

18. As to the question of compulsion, Cowdroy J referred to the passage quoted above from Gaudron J in Airservices[115] and held that the 'affordable housing provisions do not necessarily involve compulsion since the challenged provisions may only apply if application is made for development in Green Square.'

    [115] Airservices Australia v Canadian International Airlines Ltd [1999] HCA 62; (1999) 74 ALJR 76, 99 [132].

19. That is, Cowdroy J held that there was no compulsion as the landowner retained a choice whether to subdivide at all and, if so, whether to pay the 'price' for doing so.

20. In an equally bold submission as that concerning Cosgrove J's decision in Doma, Mr Foley urged us to regard the Meriton decision with 'extreme caution'.[116]  We reject that suggestion.  Cowdroy J's collection of the relevant authorities and summary of the associated principles was expressly adopted by the NSW Court of Appeal in Group Development which, on that basis, held that the contributions in question in that case were not a tax.[117]

    [116] Applicant's Response to the Respondent's Outline of Submissions and List of Authorities in Respect of Issue 8 dated and filed 13 May 2024, 31 May 2024, para [25(a)].

    [117] Baulkham Hills Shire Council v Group Development Services Pty Ltd [2005] NSWCA 315, [16].

21. Cowdroy J's collection of the relevant authorities and summary of the associated principles in Meriton were also expressly approved by Redlich JA in Fletcher.[118]

    [118] Fletcher [232].

22. In that case, the Victorian Civil and Administrative Tribunal (VCAT) had struck down a condition requiring a cash contribution towards the cost of providing public open space (POS) saying, amongst other things, that for a requirement to contribute POS to be valid, the subdivision 'needs to be of a character that is likely to generate a need for more open space: otherwise, the requirement would be a mere tax'.[119]

    [119] Fletcher v Maroondah City Council [2006] VCAT 2205, [31], cited in (Fletcher) [7].

23. The challenge to the VCAT's decision was not limited to the question as to whether the requirement amounted to a tax, and the joint reasons of Warren CJ and Osborne AJA do not deal with the issue in any depth.  Rather, their Honours simply noted that the 'relevant test' was whether the subdivision generated a need for open space and then said:

    The relevant test is not a general rule derived by implication from principles of interpretation concerning the power to impose taxes and it is unnecessary to consider those principles.  We would wish to state, however, that we accept the threshold submission of the minister and the council that these principles are not of easy application to conditions imposed incidentally to permission to subdivide.

    As the High Court stated in Lloyd v Robinson: …[120]

    [120] Fletcher [95]-[96]. The quote which follows forms part of the quote set out above at para 213.

24. As we read that passage, their Honours held it unlikely that a condition requiring a POS contribution, imposed on a subdivision which generates a need for open space, will constitute a tax for the reasons set out in Lloyd v Robinson.

25. Redlich JA agreed with much of what Warren CJ and Osborne AJA held[121] but, relevantly, dealt more fulsomely with the question as to whether the condition constituted a tax.[122]

    [121] Fletcher [125].

    [122] Fletcher [209] - [239].

26. His Honour appears to have proceeded on the basis that the requirement for a contribution was compulsory.  That may have been because cl 52.01 of the planning scheme required the imposition of a condition requiring the subdivider to pay at least 5% of the value of the land by way of a POS contribution.  That is, the obligation arose from a provision of the scheme which mandated the payment.

27. He held:

    It is not in issue that as a matter of principle the requirement to pay a 5% POS contribution in accordance with cl 52.01 could constitute an unenforceable tax, if that amount was disproportionate to the value of what is being acquired.[123]  But the contribution specified in the schedule to cl 52.01 does have a relationship to the value of the right acquired, namely to subdivide the land.

    The value of the right was discussed in Lloyd v Robinson where the High Court said: …[124]

    [123] Citing Air Caledonie International v Commonwealth (1988) 165 CLR 462.

    [124] Fletcher [228] - [229]. Again, the quote which follows forms part of the quote set out above at para 213. See, also [233].

28. He then went on to hold valid the requirement to pay the contribution (i.e. the contribution was not a tax) because there was a 'discernible relationship' between the contribution and the value of the right obtained thereby, being the right to subdivide.[125]

    [125] Fletcher [233]. See, also, Meriton [48].

29. Referring to the High Court's approach in Airservices, he held that the test for whether there was a 'discernible relationship' between the contribution and the right or privilege acquired by the 'charge' is not to be determined on the basis of the facts and circumstances specific to the particular transaction, but at a 'broader level of generality'. [126]

    [126] Fletcher [236].

30. He also held that the determination of such a question will turn on the evidence of which there was none before the Court, the issue not having been argued before the Tribunal below.[127]

    [127] Fletcher [236].

31. Similarly, there was no evidence put before us by H&H that might be relied upon to prove a submission that there is no discernible relationship between the contribution required by Condition 16 and the right to subdivide acquired by H&H.

32. Nonetheless, H&H's submissions sought to persuade us that there was no discernible relationship because no right had been obtained.  That, it submitted, was because 'the charge in this case is not expressed as payment for the right to subdivide …'.[128]

    [128] Applicant's Response to the Respondent's Outline of Submissions and List of Authorities in Respect of Issue 8 dated and filed 13 May 2024, 31 May 2024, para 22.

33. There is nothing in any of the authorities to which we have referred that requires the condition in question to be expressed in such a way as a prerequisite to validity.  Rather, it is implicit in the imposition of conditions on a permission to do that which the statute otherwise prohibits; i.e. to subdivide.

34. As has been acknowledged repeatedly since Lloyd v Robinson, the right to subdivide is a valuable one.  As Redlich JA puts it, the right 'may provide for more intensive and lucrative use of land'.[129]  There can be no suggestion otherwise in this case.

    [129] Fletcher [230].

35. In the present case, for reasons that we have already identified, we are satisfied that there is a proper basis for the Formula as provided by OP 2.4 in that there is a proper policy basis for the provision of a 4ha school per 1500 lots and, therefore, a proper basis for a subdivider to contribute 1/1500^th of the value of the subdivided land.

36. H&H adduced no evidence that the contribution so calculated was disproportionate to the value of its right to subdivide.

37. In those circumstances, we are not satisfied that the charge imposed by Condition 16 should be characterised as disproportionate.

38. For the above reasons, we are not satisfied that H&H was under a compulsion in the relevant sense to pay the contribution in that, at all times H&H retained a real choice as to whether to proceed with the subdivision.  While submissions were made to the contrary, no evidence was put forward in that regard.

39. But even if we are wrong, we are satisfied and we find that there is a discernible relationship between the obligation imposed by Condition 16 to provide a contribution towards the cost of providing a local government primary school and the right to subdivide.

40. Accordingly, we find that the requirement in Condition 16 to provide a contribution to the cost of a primary school site in the locality is not a tax.

Conclusion

1. For the above reasons, we are satisfied that Condition 16 is valid in that it was imposed for a planning purpose, it has a reasonable and fair relationship to the subdivision of the subject land and it is not legally unreasonable.  Nor does it amount to a tax.

2. It has not otherwise been suggested by H&H that there is a sound planning reason to depart from the terms of OP 2.4.

3. Accordingly, in our view the correct and preferable decision is to affirm the decision of the WAPC.  That is, Condition 16 should be imposed as a condition of the subdivisional approval.

4. Orders will be made to that effect.

Orders

The Tribunal orders:

1.The application for review is dismissed.

2.The decision of the respondent is affirmed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.

PN

Associate to Deputy President Judge Jackson

24 OCTOBER 2024