HERO PTY LTD and CITY OF KALAMUNDA - [2021] WASAT 31

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL
ACT: PLANNING AND DEVELOPMENT ACT 2005 (WA)
CITATION:   HERO PTY LTD and CITY OF KALAMUNDA [2021] WASAT 31
MEMBER:   DR S WILLEY, SENIOR MEMBER
HEARD:   10 DECEMBER 2020
DELIVERED          :   11 MARCH 2021
FILE NO/S:   DR 68 of 2020
BETWEEN:   HERO PTY LTD
First Applicant
OVEST PTY LTD
Second Applicant
AND
CITY OF KALAMUNDA
Respondent

Catchwords:

Town planning - Development application - Development contribution plan - Extrinsic materials - Whether planning condition inconsistent with planning scheme - Planning conditions - Newbury principles - Legal unreasonableness - Weight to be given to draft planning scheme amendment

Legislation:

City of Kalamunda Local Planning Scheme No 3, Pt 4, Pt 5, Pt 6, Pt 7, Pt 8, Pt 9, Sch 12, cl 6.5
Commercial Arbitration Act 2012 (WA)
Interpretation Act 1984 (WA), s 5, s 19(1)(b)(i), s 56(1)
Metropolitan Region Scheme
Planning and Development (Local Planning Schemes) Regulations 2015 (WA), reg 8(1)(c), reg 10(4), Pt 5, Sch 2, cl 67(2)(b), cl 68(2)
Planning and Development Act 2005 (WA), s 3(1)(b), s 77(1)(a), s 87(4), s 242, s 257B(2), Pt 3, Pt 4, Pt 10
State Administrative Tribunal Act 2004 (WA), s 27, s 27(2), s 29(3)(b), s 91

Result:

Decision under review varied

Category: B

Representation:

Counsel:

First Applicant	:	H Jackson SC
Second Applicant	:	H Jackson SC
Respondent	:	DW McLeod

Solicitors:

First Applicant	:	Jackson McDonald
Second Applicant	:	Jackson McDonald
Respondent	:	McLeods

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

Allsure Pty Ltd and Western Australian Planning Commission [2006] WASAT 145
Anthony Hordern & Sons Ltd v Amalgamated Clothing & Allied Trades Union of Australia (1932) 47 CLR 1
App Corporation Pty Ltd v City of Perth [2011] WASAT 132; (2011) 77 SR (WA) 198
Associated Provincial Picture Houses Ltd v Wednesbury Corp [1948] 1 KB 223
Australian Community Party v Commonwealth [1951] HCA 5; (1951) 83 CLR 1
Australian Unity Property Limited as responsible entity for the Australian Unity Diversified Property Fund v City of Busselton [2018] WASCA 38; (2018) 237 LGERA 333
Barwell Nominees Pty Ltd and City of Wanneroo [2007] WASAT 156
City of Kwinana v Lamont [2014] WASCA 112; (2014) 201 LGERA 334
City of Swan v LWP Property Group Pty Ltd [2013] WASCA 90
Empire Securities Pty Ltd & Ors and Western Australian Planning Commission [2005] WASAT 98
Fitch v Shoalhaven City Council (1987) 67 LGRA 165
Humich Nominees Pty Ltd v Metro East Joint Development Assessment Panel [2019] WASC 200
Humich Nominees Pty Ltd v Metro East Joint Development Assessment Panel [2019] WASC 200
Kakulas and City of Stirling [2013] WASAT 168
LWP Property Group Pty Ltd and City of Swan [No 2] [2012] WASAT 129
Minister for Immigration and Border Protection v Eden [2016] FCAFC 28; (2016) 240 FCR 158
Minister for Immigration and Citizenship v Li [2013] HCA 8; (2013) 249 CLR 332
Newbury District Council v Secretary of State for the Environment [1981] AC 578
Nicholls and Western Australian Planning Commission [2005] WASAT 40
Parks & Playground Movement Inc v Newcastle City Council [2010] NSWLEC 231
Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355
Re Commercial Bank of Australia (1893) 19 VLR 333
Re Shire of Mundaring; Ex Parte Solomon & Ors [2007] WASCA 132
Rpoint Land Pty Ltd and Western Australian Planning Commission [2020] WASAT 92
Sanders v City of South Perth [2019] WASC 226
Scutti v City of Wanneroo [2018] WASCA 175; (2018) 53 WAR 417; (2018) 232 LGERA 395
Shire of Serpentine-Jarrahdale and Western Australian Planning Commission [2013] WASAT 71
Sin-Aus-Bel Pty Ltd and Western Australian Planning Commission [2006] WASAT 266; (2006) 45 SR (WA) 67
Stream Focus Pty Ltd v City of Armadale [2018] WASC 13
Stream Focus Pty Ltd v City of Armadale [2018] WASCA 196; (2018) 233 LGERA 299
Terra Spei Pty Ltd and Shire of Kalamunda [2015] WASAT 134 at [206]
The Match Group v Metropolitan South West Joint Development Assessment Panel [2014] WASCA 50; (2014) 200 LGERA 227
WA Developments Pty Ltd and Western Australian Planning Commission [2008] WASAT 260
Western Australian Planning Commission v Temwood Holdings Pty Ltd [2004] HCA 63; (2004) 221 CLR 30

REASONS FOR DECISION OF THE TRIBUNAL:

Introduction

In this proceeding, the first applicant, Hero Pty Ltd (applicant) seeks review of a condition imposed by the City of Kalamunda (City or respondent).
The review relates to a condition imposed on a development approval (Development Approval) on lots 220-221 Nardine Close, High Wycombe (Land). A development contribution plan (DCP) applies to the Land.
The substantive dispute relates to whether condition 2, which requires the payment of a development contribution, is a lawful planning condition and should be imposed.
The matter was heard on 10 December 2020, largely on the basis of agreed facts.
For the following reasons, I find that condition 2 is, in this instance, beyond power and should not be imposed. I have amended condition 2 in a manner that is consistent with the City of Kalamunda Local Planning Scheme No 3 (LPS 3 or Scheme).

Background and applicable planning framework

The Development Approval was issued on 12 March 2020 and related to the construction of an 'Office' and a 'Warehouse'. The applicant sought review of condition 2 on 8 April 2020.
Mediation was not successful and the proceeding was programmed to a final hearing.
Condition 2, the focus of the proceeding, is in the following terms:
Prior to the issue of an occupancy permit, the owner of the subject land is to:
a)Pay to the City a cost contribution based on the Final Contribution Rate if determined (all infrastructure and Administrative Costs under DCP 1 in the City's LPS3, having been paid or ascertained with certainty); or if the Final Contribution Rate has not been determined;
b)Pay to the City an Interim Cost Contribution based on the latest Interim Cost Contribution Rate and in that event the owner is to enter into an agreement with the City, prepared by solicitors appointed by the City, which agreement shall include provision for a charge over the whole or part of the subject land or other security acceptable to the City, secured by a caveat.
The Land is zoned 'Industrial Development' in LPS 3. The Land is within Development Contribution Area 1 (DCA 1). The requirements of DCA 1 are set out in Sch 12 to LPS 3.
The Land is also zoned 'Urban' in the Metropolitan Region Scheme.
Clause 6.5 of LPS 3 is the focus of this proceeding. For ease of reference, I set out cl 6.5 in its entirety as Appendix A to these reasons. Schedule 12 to LPS 3 is Appendix B.
State Planning Policy 3.6 - Infrastructure Contributions (SPP 3.6) sets out the basic principles for a DCP and includes, within Appendix 2, a set of draft model provisions for DCAs and DCPs for inclusion in local planning schemes. Clause 6.5 of LPS 3 adopts the model provisions contained in Appendix 2 of SPP 3.6.
On 10 May 2013 Amendment 48 to LPS 3 was published in the Government Gazette and, pursuant to s 87(4) of the Planning and Development Act 2005 (WA) (PD Act), has full force and effect. Amendment 48 to LPS 3:
a)inserted cl 6.5;
b)established DCA 1 – the Forrestfield Light Industrial Area - Stage 1 (being the area bounded by Berkshire Road, Milner Road, Sultana Road West and Roe Highway) as identified on the Scheme Map for LPS 3; and
c)incorporated DCP 1 into Sch 12.

Nature of the review

This matter arises in the Tribunal's review jurisdiction.
My role is to hear the matter de novo and to make the correct and preferable decision: s 27(2) State Administrative Tribunal Act 2004 (WA) (SAT Act).

Evidence

At the final hearing of this matter, brief evidence was provided by Peter Varelis who is the Director of Development Services at the City.
Mr Varelis' evidence can largely be accepted in terms of setting out the background to the DCP and the City's administration thereof of DCA 1.
However, there are aspects of his evidence that I do not agree with, which relate primarily as to how LPS 3 should be interpreted. While I am always interested as to how statutory planners read and apply planning scheme provisions, the issues before me are largely questions of statutory construction.
I turn now to set out the background to the dispute.

Background

DCA 1 commenced on 10 May 2013 via an amendment to LPS 3. Those landowners who developed in December 2013 paid a Cost Contribution of $28.49 per square metre (four developers made contributions at this rate).
In 2015 the contribution rate rose to $31.23 per square metre which was reduced to $29.66 per square metre (eight developers made Cost Contributions at this rate).
Following further revision of the utility cost estimates, the contribution rate dropped to $17.01 per square metre in December 2018 (six developers made Cost Contributions at this rate).
In February 2020 the City then adopted what it termed an 'interim rate' of $23 per square metre which was subsequently revised down to $20.97 in July 2020.
Following review of the anticipated infrastructure costs, including revisions to the anticipated costs of relocating Western Power infrastructure (originally estimated to be more than $5,000,000) and further planning reviews of the infrastructure upgrades, it became apparent that the initial cost estimates were not accurate. They were far too high. As a consequence, as set out above, the Cost Contribution reduced to $17.01 per square metre in December 2018.
The City undertook further reviews. It then became apparent that the City's method of calculating the Cost Contributions was inaccurate. This is because the estimates were based on only the remaining works, not the total works for the DCA. This meant that from December 2018 developers paid significantly less than those who contributed earlier. Those who had made their Cost Contributions at the higher rate, or at least some of them, complained to the City.
To attempt to remedy this, the City adopted what it now terms an 'interim rate'. The City has imposed condition 2 which requires the payment of:
a)a contribution being made on the final contribution rate; or
b)if that has not yet been determined, an interim cost contribution plus an agreement that will lead to a caveat being lodged on the Land until the final contribution rate is known and paid.
It is against that background that the applicant seeks review of condition 2. Before I turn to set out the parties' submissions, I pause to consider the issues that arise for determination.

Respondent's issues

In its Statement of Issues Facts and Contentions (Exhibit 1) at paras 1.1 to 1.10, the City set out the following issues which, it submits, arise for consideration:
1.1Whether the cost contribution of an Owner under DCP 1 is fixed at the time liability to contribute arises under cl.6.5.13.2 of LPS 3.
1.2Alternatively to 1.1, whether the cost contribution of an Owner under DCP 1 is open to review:
(a)until all infrastructure costs have been paid or otherwise ascertained with certainty, so as no longer to depend on estimates; or
(b)until the City of Kalamunda (City) has accepted a cost contribution based upon estimated costs as a final cost contribution and the City has either:
(i)entered into an agreement with the Owner accordingly (cl.6.5.11.4(b)); or
(ii)accepted the Cost Contribution based on estimated costs as a final Contribution and has certified or is prepared to certify the same pursuant to cl.6.5.14.3 of LPS 3.
1.3Where an Owner proposes to make a Cost Contribution based on estimates, whether it is reasonable for the City to require the Owner to enter into an agreement for the purpose of ensuring that the Owner will ultimately make a final Contribution that is consistent with the principle of uniformity or consistency of contributions across DCA 1.
1.4Whether the calculation of a Cost Contribution based on the methodology provided in DCP 1 should reasonably extend beyond the application of the formula Contribution rate = cost of infrastructure items + cost of administrative items divided by the net lot area of DCA 1 (m2), the Owner's Contribution being the product of the contribution rate and the net lot area of the Owner's land.
1.5Whether, having regard to cl.6.5.9, it is appropriate in ascertaining the meaning of the term 'net lot area' in the DCP 1 method for calculating contributions, to treat the net lot area as the contribution area minus the land excluded under cl.6.5.9 and any land developed prior to the coming into operation of DCP 1.
1.6Whether in the interpretation of the method for calculating contributions under DCP 1, and in particular having regard to the note 'cost of infrastructure items = remaining infrastructure costs - funds held as money', calculations of cost contributions using that definition of 'cost of infrastructure items' produces a result that is absurd or unreasonable, and is manifestly inconsistent with the principles of equity and consistency, and inconsistent with the definitions of 'infrastructure' and 'infrastructure costs' in cl.6.5.1 of LPS 3.
1.7Whether condition 2 of the Applicants' Development Application (DA) is invalid or otherwise inappropriate as being inconsistent with the provisions of LPS 3 on their proper interpretation.
1.8Whether condition 2 is invalid on the basis that:
(a)the condition is not for a planning purpose and is for an ulterior motive; and/or
(b)the condition does not reasonably and fairly relate to the development permitted; and/or
(c)the condition is unreasonable; and/or
(d)the condition is not certain and final, as asserted by the Applicants.
1.9Whether condition 2 is unreasonable and/or inappropriate for any other reason having regard to the circumstances of the case.
1.10Whether any other and if so what condition might be substituted for condition 2 so as to ensure that the cost contribution by the Applicants under DCP 1 is fair, equitable, and consistent with the contributions of other Owners required to contribute under DCP 1.

The limits to my jurisdiction

As will be seen from the list of issues set out above, the respondent has identified a number of questions which, in general terms, relate to how the cl 6.5 of LPS 3 should be read and applied. As I explained at a number of points throughout the proceedings, including at the final hearing, my jurisdiction is limited to the decision under review.
The operation of the DCP, and the construction of the provisions in a general sense, are simply not issues that are before me in any substantive sense. In this regard see The Match Group v Metropolitan South West Joint Development Assessment Panel [2014] WASCA 50; (2014) 200 LGERA 227 (Pullin JA, Newnes JA and Murphy JA) (The Match Group).
The Tribunal is a creature of statute and, as a result, in general terms my jurisdiction begins, and ends, with condition 2: Empire Securities Pty Ltd & Ors and Western Australian Planning Commission [2005] WASAT 98 at [10]; but cf Allsure Pty Ltd and Western Australian Planning Commission [2006] WASAT 145 at [15].
For this reason, I agree with Mr Jackson SC, counsel for the applicant, that I have no jurisdiction to directly engage with questions such as those posed in issues 1.4 1.6 (set out at [28] above).

Issues for determination

It follows that I do not agree that I have jurisdiction to determine all of the issues that have been raised by the City. Indeed, I broadly agree with the applicant's submissions on the issues that I must determine (ts 21, 10 December 2021). Those issues, and my summary answer to those issues, are as follows:
1)Whether a condition relating to a DCP contribution can be imposed on a development approval having regard to cl 6.5 of LPS 3.
Answer: Yes.
2)Whether cl 6.5 of LPS 3 provide for 'interim' and 'final payments'.
Answer: No.
3)Whether condition 2 is valid having regard to LPS 3.
Answer: No.
4)Whether condition 2 is legally unreasonable.
Answer: Yes.
5)Whether condition 2 should be varied to be consistent with LPS 3.
Answer: Yes.

Relevant principles of interpretation

The focus of this case is whether condition 2 is a lawful condition in the context of the applicable planning framework, in particular LPS 3. Having regard to the issues in contest, the question of whether condition 2 is lawful is, ultimately, a question of statutory construction.
LPS 3 is a local planning scheme made pursuant to Pt 4 of the PD Act. LPS 3 is also a 'written law' for the purposes of s 5 of the Interpretation Act 1984 (WA) (Interpretation Act). LPS 3 is to be read and applied in accordance with the orthodox canons of construction.
As a matter of legislative context, it is relevant that planning schemes are not ordinarily drafted by Parliamentary Counsel: Sanders v City of South Perth [2019] WASC 226 at [98]-[99]. As a result, planning schemes should be construed broadly and sensibly, not pedantically: Australian Unity Property Limited as responsible entity for the Australian Unity Diversified Property Fund v City of Busselton [2018] WASCA 38; (2018) 237 LGERA 333 at [84] (Buss P, Murphy and Mitchell JJA) (Australian Unity); Re Shire of Mundaring; Ex Parte Solomon & Ors [2007] WASCA 132 at [25] (McLure JA, Steytler P and Pullin JA agreeing).
In accordance with the orthodox principles of construction, LPS 3 is to be read as a whole: City of Kwinana v Lamont [2014] WASCA 112; (2014) 201 LGERA 334 at [48] (Murphy JA, Mazza JA and Edelman J) (Lamont); Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 at [69] (Brennan CJ, McHugh J, Gummow J, Kirby J and Hayne J) (Project Blue Sky).
LPS 3, like all local planning schemes in Western Australia, include the provisions contained in Sch 2 to the Planning and Development (Local Planning Schemes) Regulations 2015 (WA) (LPS Regulations). By reason of s 257B(2) of the PD Act (together with reg 8(1)(c) and reg 10(4) of the LPS Regulations), the Sch 2 provisions (known as the 'deemed provisions') are to be read and applied as part of LPS 3.
Given the nature of the issues in contest, it is appropriate to identify that the provisions of LPS 3, including cl 6.5, have effect as if enacted by the PD Act: s 87(4) PD Act; see also Scutti v City of Wanneroo [2018] WASCA 175; (2018) 53 WAR 417; (2018) 232 LGERA 395 at [125(9)] (Buss P, Murphy JA and Allanson J) (Scutti).
Tests for the imposition of planning conditions
The principles that inform the imposition of planning conditions also arise for consideration. These principles are commonly referred to as the Newbury principles following the decision of the House of Lords in Newbury District Council v Secretary of State for the Environment [1981] AC 578 (Newbury) at 599, 607-608, 618 and 628.
In Western Australian Planning Commission v Temwood Holdings Pty Ltd [2004] HCA 63; (2004) 221 CLR 30 McHugh J, by reference to Newbury, set out the followings 'tests' which inform the validity of planning conditions. McHugh J, at [57], set out that the for a planning condition to be valid, the condition:
a)must be for a planning purpose and not for any ulterior purpose;
b)reasonably and fairly relates to the development permitted; and
c)must not be so unreasonable that no reasonable planning authority could have imposed it.
The Newbury principles have been applied many times in the Tribunal: for example in Sin-Aus-Bel Pty Ltd and Western Australian Planning Commission [2006] WASAT 266; (2006) 45 SR (WA) 67 (Sin-Aus-Bel) at [19]; WA Developments Pty Ltd and Western Australian Planning Commission [2008] WASAT 260; App Corporation Pty Ltd v City of Perth [2011] WASAT 132; (2011) 77 SR (WA) 198 at [176].

I will return to discuss these principles later in this decision.

Applicant's submissions

Condition 2 is invalid because cl 6.5 of LPS 3 is an exhaustive code

One of the central planks of the applicant's case is that, having regard to LPS 3, read as a whole, there is no power for the City to have imposed condition 2. This is because cl 6.5 of LPS 3 provides 'a comprehensive regime by which development contributions are to be ascertained, calculated, imposed and paid in relation to land located within a DCA': applicant's submissions at para 6.
Because cl 6.5 provides for a 'comprehensive regime' relating to development contributions, there is consequently no room for development contributions to be included as conditions attached to development approvals.
In this way, the general power to impose conditions contained in cl 68(2) of the deemed provisions must be read down in the context of land that is included within a DCA: Fitch v Shoalhaven City Council (1987) 67 LGRA 165 at 170 (Stein J).
The applicant submits that this conclusion follows from the comprehensive nature of the scheme for development contributions established by cl 6.5 of LPS 3 and the principle set out in Anthony Hordern & Sons Ltd v Amalgamated Clothing & Allied Trades Union of Australia (1932) 47 CLR 1 at 7 (Anthony Hordern) where Gavan Duffy CJ and Dixon J stated:
… When the Legislature explicitly gives a power by a particular provision which prescribes the mode in which it shall be exercised and the conditions and restrictions which must be observed, it excludes the operation of general expressions in the same instrument which might otherwise have been relied upon for the same power[.]
In this instance, because LPS 3 includes a comprehensive regime for the imposition of development contributions in relation to land that is within a DCA, there must be a corresponding narrowing of other powers which might, but for that comprehensive regime, allow the imposition of a development contribution.
The applicant submits that previous Tribunal decisions support this principle, in that they proceed on the basis that a local government must choose between leveraging development contributions by way of conditions or scheme provisions: LWP Property Group Pty Ltd and City of Swan [No 2] [2012]WASAT129 at [96] (LWP Property Group).

Condition 2 is invalid because it is legally unreasonable

The applicant further submits that condition 2 is legally unreasonable and is therefore invalid.
The applicant notes that legal unreasonableness is contextual and is to be assessed by reference to the relevant facts and circumstances, including the applicable statutory framework: Minister for Immigration and Border Protection v Eden [2016] FCAFC 28; (2016) 240 FCR 158 at [63] (Allsop CJ, Griffiths and Wigney JJ).
In this instance the relevant facts include:
a)the DCP only has effect to 12 May 2023;
b)as at March 2020, less than 60% of lots within DCA 1 have been developed;
c)landowners are not obliged to develop at any particular time and the date at which the lots will be developed is unknown; and
d)the time at which all landowners will be required to pay a contribution under the DCP is unknown.
Condition 2 is legally unreasonable because it is 'most unlikely' that a 'final contribution rate' will be determined by the time that the applicant is ready to seek an occupancy permit (the granting of an occupancy permit being the trigger for payment of the development contribution under condition 2) and therefore, pursuant to condition 2, will be subject to a charge on its land, secured by a caveat:
a)in relation to an amount of money that is not known; and
b)for an unknowable period of time.

Condition 2 is invalid because it is inconsistent with cl 6.5 of LPS 3

In Barwell Nominees Pty Ltd and City of Wanneroo [2007] WASAT 156 (Barwell) the Tribunal stated (at [100]) that:
… it is not possible for a condition of planning approval to modify the provisions of Pt 10, and it is undesirable to attempt through a condition to restate the method of calculation detailed in Pt 10 of the Scheme[.]
The Tribunal's finding in Barwell that it is 'not possible' for a condition to purport to modify scheme provisions is tantamount to a finding that such a condition would be invalid.

Respondent's submissions

The respondent's submissions emphasise that one of the key principles is that a DCP is to be equitable between the affected landowners.
The respondent also identifies a number of clauses within cl 6.5 of LPS 3 which refer to the payment of contributions being made with the 'agreement' of or in a 'manner acceptable to' the city. Examples include cl 6.5.14.2 and cl 6.5.14.3.
In the circumstances of this case, it would be unacceptable for the City to accept a cost contribution unless there is a mechanism to ensure that any payment can be revised at a later point when the actual cost of delivering the infrastructure the subject of the DCP is actually known.
It is only after that the infrastructure costings are certain would the City provide the certification in writing for the purposes of cl 6.5.14.3 of LPS 3.
Clause 6.5.14.3 makes reference to a cost contribution being paid in full. That phrase recognises that a Cost Contribution may be paid in part and subsequently paid in full. It is only upon the payment of the contribution in full that the charge pursuant to cl 6.5.15 of LPS 3 is discharged, and any caveat withdrawn.
Clause 6.5.11.5 contemplates that where a Cost Contribution is based on estimated costs, that Cost Contribution may be adjusted or clarified upon the actual costs being determined.
While the liability to pay a Cost Contribution arises on the earliest of the events set out in cl 6.5.13.2 of LPS 3, that liability is only discharged once the final cost contribution acceptable to the City is paid.
Pursuant to cl 6.5, the Cost Contribution of a landowner under DCA 1 is not fixed at the time the liability to contribute arises, but is satisfied only upon:
a)payment at a time when all the infrastructure costs have been paid or otherwise ascertained with certainty; or
b)the City accepts a cost contribution based upon estimated costs as a final cost contribution by either:
i)entering into an agreement with a landowner pursuant to cl 6.5.11.4(b); or
ii)accepting the cost contribution based on estimated costs as a final contribution and has certified or is prepared to certify the same pursuant to cl 6.5.14.3.
If the City does not secure a full cost contribution from the applicant by way of a condition of approval, it would lose the opportunity to obtain security for payment of outstanding monies which would be contrary to the interests of other landowners in DCA 1, and contrary to the interests of the City's ratepayers.
It is not consistent with the guiding principles for DCPs under LPS 3 and SPP 3.6 for the final Cost Contributions to be set at $17.01 per square metre when other landowners have contributed at significantly higher rates, as high as $31 square metre. Such an outcome would be contrary to the principles of equity and consistency which underpin a DCP and would jeopardise the effective implementation of DCP 1.
The applicant, and others who wish to pay a contribution rate at $17.01 per square metre, are seeking an outcome that is neither equitable nor consistent and may result in any liabilities falling on the City's ratepayers, not those who benefit from the DCP.
On the question of invalidity, the respondent submits (Exhibit 1 at para 3.9):
(a)The condition being aimed at ensuring the implementation of DCP 1 effectively, and ensuring the equitable distribution of cost burdens over all landowners in DCA 1, it is a condition imposed for a planning purpose, and does not have an ulterior motive.
(b)As the development the subject of condition 2 is dependent upon the provision of the infrastructure proposed under DCP 1, and as the fair distribution and payment of the costs of that infrastructure and related administrative costs is essential for the continuation and success of the DCP, the condition does fairly and reasonably relate to the development permitted.
(c)As the condition has the purpose of ensuring that the applicant makes an equitable contribution to the costs of DCP 1, and a contribution which is consistent with contributions made and to be made by other landowners of land in DCA 1, the condition is reasonable.
(d)The terms of the condition are designed to provide certainty and finality in regard to the determination of the applicant's share in the burden of the costs of DCP 1, and on that basis it satisfies the test of certainty and finality.

Clause 6.5 of LPS 3

This case turns of the proper construction of cl 6.5. I commence my analysis of cl 6.5 by noting that cl 6.5.3 requires that a DCP be prepared for each DCA. A DCP is incorporated in Sch 12 and forms part of LPS 3: cl 6.5.4. Schedule 12 to LPS 3 is Appendix 2 to these reasons.
Clause 6.5.5 provides that the City shall not withhold support for a subdivision or strata subdivision or refuse a development solely for the reason that:
a)a DCP in not in effect;
b)there is no approval to advertise a DCP; or
c)that there is no other arrangement with respect to a landowner's contribution towards the provision of community infrastructure (being infrastructure such as recreational facilities; community centres; child care and after school centres as set out in the definition of 'infrastructure' in cl 6.5.1).
DCPs are prepared pursuant to cl 6.5.6. A DPC is to be prepared based on the following principles. Because these principles are in focus in the proceeding, I will set them out in full:
a)Need and the nexus
The need for the Infrastructure included in the plan must be clearly demonstrated (need) and the connection between the development and the demand created should be clearly established (nexus).
b)Transparency
Both the method for calculating the development contribution and the manner in which it is applied should be clear, transparent and simple to understand and administer.
c)Equity
Development contributions should be levied from all developments within a Development Contribution Area, based on their relative contribution to need.
d)Certainty
All development contributions should be clearly identified and methods accounting for cost adjustments determined at the commencement of a development.
e)Efficiency
Development contribution should be justified on a whole of life capital cost basis consistent with maintaining financial discipline on service providers by precluding over recovery of costs.
f)Consistency
Development contributions should be applied uniformly across a development contribution area and the methodology for applying contributions should be consistent.
g)Right of consultation and review
Owners have the right to be consulted on the manner in which development contributions are determined. They also have the opportunity to seek a review by an independent third party if they believe the calculation of the costs forming part of the contributions is not reasonable.
h)Accountable
There must be accountability in the manner in which development contributions are determined and expended.
I pause to observe here that these principles inform the preparation of a DCP. These principles do not have a role to play in how the provisions of the DCP are otherwise interpreted. Indeed, as the provisions of DCA 1 form part of LPS 3, they are to be construed in accordance with the relevant principles of interpretation.
To the extent that the respondent's submissions imply that I should consider questions of equity and consistency in construing the relevant provisions of the LPS 3, I therefore disagree.
However, I do acknowledge that the relevant principles of construction include the need to take proper account of the town planning purpose of the scheme. The principles which underpin a DCP may be relevant as part of that exercise.
Clause 6.5.8 provides that a DCP is to have a definite life span. In this instance, the DCA 1 will have effect for a period of 10 years.
Clause 6.5.10 provides for the preparation of a DCP report and a Cost Apportionment Schedule (CAS) both of which must 'set out in detail the calculation of the Cost Contribution for each owner in the [DCP] based on the methodology provided in the [DCP]'. The DCP report and the CAS do not form part of LPS 3 but are subject to review pursuant to cl 6.5.11.
Determinations of 'infrastructure costs' and 'administrative costs' are to be determined based on amounts expended. However, where expenditure is yet to occur, costs are to be based on the best and latest estimated costs available (adjusted as necessary): cl 6.5.11.1.
Where a CAS includes 'infrastructure costs' and 'administrative costs' which are based on estimated costs, these estimates are to be reviewed at least annually until the relevant infrastructure or administrative cost has occurred: cl 6.5.11.2.
Clause 6.5.11.4 provides that where any 'Cost Contribution' is on the basis of an estimated cost, the local government
(a)is to adjust the Cost Contribution of any Owner in accordance with the revised estimated costs; and
(b)may accept a Cost Contribution, based on estimated costs, as a final Cost Contribution and enter into an agreement with the Owner accordingly.
The meaning of cl 6.5.11.4 is very much in contest. The applicant submits that, on its true construction, cl 6.5.11.4 allows a local government to reach agreement with a landowner as to that landowner's Cost Contribution ahead of the time upon which liability would have otherwise arisen. The applicant says the benefits for landowners in such an arrangement is 'immediately apparent'.
Conversely, the respondent submits that cl 6.5.11.4(b) demonstrates the capacity of the local government to require interim payments under cl 6.5 of LPS 3. This is on account of the use of the word 'may': s 56(1), Interpretation Act.
That is, a local government 'may' accept a Cost Contribution, based on estimates, as a 'final Cost Contribution'. The respondent's submission is that because the decision to as to whether a Cost Contribution is to be based on estimated costs is discretionary, it follows that a local government may determine that a Cost Contribution based on estimates may be regarded as 'interim' only.
The respondent's submissions also emphasise the use of the word 'adjust' and 'any' in cl 6.5.11.4(a) of LPS 3. Mr McLeod, counsel for the City, made the following submissions in this regard (ts 84-85, 10 December 2020):
McLEOD, MR: … I just wonder what would be the point of amending a cost contribution where a developer's liability to make a contribution has arisen? What would be the point of amending the cost contribution in light of the revised estimates if the - not only the liability has arisen, but also in some way the contribution has been levied? And yet the scheme regularly talks about owner's cost contributions based on estimates being amended and I might mention in that connection also in clause 6.5.11.4, which I referred to emphasise the word 'adjust' where a cost contribution has been calculated on the basis of estimated cost, the Local Government is to adjust the cost contribution.
One of the points that I ought to have also emphasised is that it doesn't talk about adjust the cost contribution of owners who have yet to make a contribution or who have yet to carry out a development. It talks about the cost contribution of any owner and I think there's great significance in the use of the term 'any' in the context of 6.5.11.4(a). The word 'any' in that context supports the interpretation and the approach that we have perched on[.]
As I will explain later in these reasons, I do not accept, in a complete sense, either construction of cl 6.5.11.4 that has been put to me. However, that should not be viewed as a criticism. The proper construction of cl 6.5 in the context of LPS 3, is far from clear and I accept a number of constructions are open.
When I come to address issue 2, I will return to discuss the operation of the scheme of development contributions but, in my view, it is a scheme that provides for a once-off payment only.
Having regard to cl 6.5 of LPS 3 read as a whole, I do not consider that it is a scheme that provides for the payment of an 'interim' Cost Contribution with a 'final' Cost Contribution to be determined only after all infrastructure has been delivered. However, I will continue to address the scheme of cl 6.5.
Clause 6.5.11.6 of LPS 3 provides that where a landowner objects to the amount of a Cost Contribution, the landowner may give notice to the local government requesting a review of the amount of the Cost Contribution by an independent expert agreed by the local government.
A landowner has 28 days in which to lodge his or her objection. If the independent expert's review does not change the Cost Contribution to a figure acceptable to the landowner, the Cost Contribution is to be determined by an agreed method, and the matter may proceed to arbitration pursuant to the Commercial Arbitration Act 2012 (WA) (CA Act): cl 6.5.11.7.
The liability to pay the Cost Contribution pursuant to cl 6.5 of LPS 3 arises from cl 6.5.13.1. That liability arises on the earlier of:
a)the Western Australian Planning Commission (WAPC) endorsing its approval on the deposited plan or survey strata plan of the subdivision of the landowner's land in the DCA;
b)the commencement of any development on the landowner's land (aside from the development of the first single house or outbuildings on an existing lot which has not been subdivided: cl 6.5.13.3);
c)the approval of any strata plan within the DCA; or
d)the approval of a change or extension of use by the local government on the landowners' land within the DCA.
Where a DCP expires perforce of cl 6.5.8, a landowner's liability to pay the landowner's outstanding liability to pay the Cost Contribution under the DCP shall be deemed to continue in effect and be carried over into any subsequent DCP which includes the landowner's land: cl 6.5.13.4
Pursuant to cl 6.5.14.1 of LPS 3, a landowner, with the agreement of the local government, is to pay the landowner's Cost Contribution by:
a)cheque or cash;
b)transferring land (to either the City or a public authority) in satisfaction of the Cost Contribution;
c)the provision of physical infrastructure;
d)some other method acceptable to the local government; or
e)any combination of these methods.
The landowner, with the agreement of the local government, may pay the landowner's Cost Contribution in a lump sum, by instalments or in such other manner acceptable to the local government: cl 6.5.14.2.
Payment by a landowner of the Cost Contribution, including a Cost Contribution based on estimated costs in a manner acceptable to the local government, constitutes full and final discharge of the landowner's liability under the DCP and the local government shall provide certification in writing to the landowner of such discharge if required by the landowner: cl 6.5.14.3.
Where a landowner is liable to make a Cost Contribution, but has not yet paid that Cost Contribution, the amount of that outstanding Cost Contribution is a charge on the landowner's land. The City may lodge a caveat, at the landowner's expense, against the certificate of title to that land: cl 6.5.15. Once the Cost Contribution is paid in full, on request, the local government is to withdraw any caveat that has been lodged: cl 6.5.15.3.
Cost Contributions for a DCA are to be paid into, and held in, a reserve account established by the City: cl 6.5.16.1. The City is to publish an audited annual statement of accounts for the DCA as soon as practicable after the audited annual statement of accounts becomes available: cl 6.5.16.3.

Pursuant to cl 6.5.17.1 of LPS 3, if there is a shortfall in the total Cost Contributions at the time that all Cost Contributions have been made or accounted for in a DCA, the City may:
a)make good the shortfall;
b)enter into agreements with landowners to fund the shortfall; or
c)raise loans or borrow from a financial institution to fund the shortfall (and may thereafter impose a differential rate to the DCA).
In the event that there is a surplus in funds once all the DCA costs have been accounted for, the City is to refund to the excess funds to contributing landowners for that DCA. If that is impractical by reason of being unable to identify the contributing landowners or their entitled amount of refund, the City may otherwise apply any excess funds to provide additional facilities in the DCA.
Aside from an exception which is not presently relevant, any dispute between a landowner and a local government in connection with a Cost Contribution required to be made is to be the subject of arbitration pursuant to the CA Act: cl 6.5.19.
Having set out the scheme of 6.5 on LPS 3, I now turn to the issues in contest between the parties.

Issue 1: Whether a condition relating to a DCP contribution can be imposed on a development approval having regard to cl 6.5 of LPS 3

For the following reasons, I do not accept the applicant's submission that, by reason of cl 6.5 of LPS 3, there is no capacity for the City in the context of a development approval (or the WAPC in the context of subdivision applications made pursuant to Pt 10 of the PD Act) to impose a condition in relation to development contributions.
While I accept there is force to the applicant's submissions, I am inclined to the view that cl 6.5 of LPS 3 does not operate as an exhaustive code, such that there is relevantly no work for cl 68(2) of the deemed provisions to do. I have reached that view for three principal reasons.
Firstly, there is nothing in the express terms of cl 6.5, read in the context of LPS 3 as a whole, which suggests that it is a standalone scheme which operates completely independently of the remainder of LPS 3. While I agree it is a scheme providing for the liability and levying of development contributions, I do not read cl 6.5 as operating to exclude the application of other relevant provisions of LPS 3, including cl 68(2) of the deemed provisions.
Contrary to Mr Jackson's submissions, I do not regard cl 6.5 as being akin to an exhaustive and exclusive code. LPS 3 is divided into 11 parts with 12 schedules (but of course, also includes the deemed provisions). Part 6 is headed Special Control Areas and deals with inter alia a number of matters including development areas, DCAs and planning within bushfire areas. Part 4 sets the relevant zones and addresses questions of land use permissibility. Part 5 includes general development requirements. Part 7 deals with heritage and Pt 8 and Pt 9 deal with the requirement for development approval and approval process itself.
As a matter of structure, it would seem Pts 4, 5 and 6 set out land use and development requirements that then informs the application and approval processes contained in Pt 8 and Pt 9. Clause 6.5 of LPS 3 simply forms part of the fabric.
In my view, there is nothing in the structure of LPS 3 which supports Mr Jackson's submissions that cl 6.5 operates as a separate and exhaustive code with the context of LPS 3. While I do accept that the division of a legislative instrument into parts may qualify the general principle that the instrument is to be read and applied as a whole (Re Commercial Bank of Australia (1893) 19 VLR 333 at 375 (Holroyd J)) no such issue arises in the context of LPS 3.
Having regard to the structure of LPS 3, Mr Jackson’s submissions would carry more weight if cl 6.5 was a separate Part, well removed from the provisions which work together to regulate built form and development. However, in the context of LPS 3, cl 6.5 just reads as part of the suite of provisions that regulate development. Furthermore, the development contributions being made pursuant to cl 6.5 are for subdivisions and developments that are regulated by LPS 3. Clause 6.5 is part of the machinery as to how development is managed by the City. Clause 6.5 is not a standalone scheme. While cl 6.5 is comprehensive, it is also to be read and applied as part of LPS 3.
This is because the express terms of cl 6.5 do not provide that development contributions cannot be levied by way of conditions imposed on planning approvals, nor does that inference reasonably arise.
While it is not strictly necessary for development contributions to be imposed by way of conditions, because the liability arises as a matter of fact under cl 6.5.13, equally, there is nothing in the text of cl 6.5 that prevents a planning condition from being imposed provided the condition is consistent with LPS 3. That is an issue which I will come to later in these reasons.
Secondly, despite the detailed nature of the provisions contained in cl 6.5, there are still choices that the City may make in terms of how the DCP is administered.
For example, cl 6.5.14.1 relates to the payment of Cost Contributions by a number of different means all with the agreement of the City. In my view, a condition could reasonably be imposed which identifies what the City considers to be reasonable arrangements. Likewise, Cost Contributions can be made, with the agreement of the City, via a lump sum or instalments: cl 6.5.14.2. A planning condition may also direct itself to such issues.
The point being that despite the comprehensive nature of cl 6.5 of LPS 3, there are still matters relating to development contributions that the City may wish to resolve. Indeed, Mr Jackson himself submitted, albeit in the alternative, that a planning condition may well be deployed to 'plug some gap' in the regime established by cl 6.5: ts 40, 10 December 2020.
Mr McLeod draws a distinction between a landowner's 'liability' arising and that contribution actually being 'levied': ts 12-13, 10 December 2020. He further submits that there is a 'gap' in cl 6.5 in that it does not identify how the City could recover any debt that may be owed to it. Mr McLeod also submits that cl 6.5 does not address precisely how Cost Contributions will be actually be collected: ts 9-10, 20 December 2020.
To the extent that Mr McLeod's submissions highlight there are some 'gaps' in the regime established by cl 6.5 of LPS 3, I accept these submissions. This only bolsters my view that, notwithstanding the fact that cl 6.5 is very detailed, there remains a role for planning conditions.
Thirdly, while the construction task begins and ends with the text of LPS 3, the modern approach to construction is that the context giving rise to that text is relevant. Where the provisions of a 'written law' give rise to ambiguity, I may give consideration to 'any material' that does not form part of the written law to 'ascertain the meaning' of the written law: s 19(1)(b)(i) of the Interpretation Act.
In this instance, the context of cl 6.5 of LPS 3 is that it is a provision that has been harvested, largely verbatim, from the model provisions contained in Appendix 2 to SPP 3.6, which is a State planning policy, prepared and approved pursuant to Pt 3 of the PD Act.
It should also be noted that SPP 3.6 is also state level policy that is specifically focused on development contributions. However, even more than that, the City is required to give the terms of SPP 3.6 'due regard' in the preparation of LPS 3: s 77(1)(a) PD Act.
Because the proper construction of cl 6.5, in the context of LPS 3, is not altogether clear, I consider it prudent to examine SPP 3.6 to the extent that it may inform the meaning of cl 6.5 as well as 'the context and the statutory purpose being pursued': Australian Unity at [83].
There is nothing in SPP 3.6 that suggests that local governments must impose development contributions either by planning conditions or development contributions and that the two methods may not be used in combination. Indeed, SPP 3.6 tends to suggest otherwise. Section 5.3.2 of SPP 3.6 provides that:
Development contributions are generally calculated and applied by way of conditions of subdivision, strata subdivision or development, particularly in greenfield areas. Development contributions may also be sought in infill and redevelopment areas at the time of subdivision, strata subdivision or development.
They may be calculated and applied as
•standard conditions of subdivision or strata subdivision;
•conditions of development[.]
As I have indicated, these terms do not suggest, or even infer, that the establishment of a DCP means that development contributions cannot be addressed by or included as conditions imposed on planning approvals.
However, I reiterate that while SPP 3.6 is relevant as a matter of context, it is the text of cl 6.5 (together with LPS 3 generally), which is paramount.
To the extent that the applicant's submissions rely on LWP Property Group as authority for the proposition that a local government must choose to impose development contributions by either planning conditions or by way of a DCP, I disagree.
With respect to Mr Jackson, for two reasons, I do not regard LWP Property Group as being of much relevance to the questions before me. Firstly, LWP Property Group did not relate to a development approval, but a requirement imposed on a 'Development Plan' made under the relevant planning scheme. Secondly, the question for the Tribunal was a different question to that before me. The question in LWP Property Group was whether approval of a 'Development Plan' could include a condition requiring an infrastructure contribution or whether an actual DCP was required.
In LWP Property Group the Tribunal stated the following at [96]:
The Tribunal considers that where the City reaches the view that a contribution by a developer towards infrastructure costs is required, the City must also consider whether that should be achieved by the imposition of a condition of development approval or whether the Scheme needs to be amended to include a new DCA, followed by the preparation of a DCP for that area. What determines the outcome of that decision will very much depend on the facts at the time, but in general terms we consider that appropriate deliberations would centre around the extent to which the relevant development or developments contribute to the need for the infrastructure in question, the number of developments involved, the amount of the required contributions and the extent to which there are also regional and district needs for the infrastructure in question.
These observations do not suggest that development contributions are, or have to be, an either/or proposition. Further, there is nothing in this commentary that suggests the requirement to make a Cost Contribution pursuant to a DCP cannot be imposed as a condition on a planning approval.
What LWP Property Group does say is, quite correctly, that each local government must make a decision as to how it wants to ensure the infrastructure necessary to support new urban and related development is delivered. LWP Property Group does not otherwise inform the decision before me.
I should also add, for completeness, that an appeal against LWP Property Group was dismissed: City of Swan v LWP Property Group Pty Ltd [2013] WASCA 90 (Martin CJ, Pullin JA, Murphy JA).
For these reasons, I do not agree that a planning condition imposed that relates to development contributions, in the context of LPS 3, would offend the principle that arises in Anthony Hordern.
I should also add, as an aside, that there is an obvious benefit to landowners in planning authorities imposing conditions relating to DCPs on planning approvals, even if the liability arises independent of conditions. This is because that condition can then the subject of a Tribunal review. To me, that is a practice that is in the public interest, especially for subdividers and developers.
Even if the Tribunal may have a somewhat limited jurisdiction in relation to the underlying DCP (having regard to decisions such as The Match Group), the Tribunal's processes, which routinely include mediation, allow for productive discussions on the precise requirements for the DCP. To me, that is a cost-effective process which provides obvious benefits to landowners.
As I have stated, while there is some force to the applicant's submissions that cl 6.5 of LPS 3 is an exhaustive code, for the reasons I have explained, I ultimately do not accept these submissions.
I now turn to address whether the scheme for development contributions, as set out in cl 6.5, provides for the making of 'interim' and 'final' payments.

Issue 2: Whether cl 6.5 of LPS 3 provide for 'interim' and 'final payments''

As I have explained, the meaning of cl 6.5.11.4 is in contest in this proceeding.
As I have also explained, the applicant submits that cl 6.5.11.4 allows a local government to reach agreement with a landowner as to that landowner's cost contribution ahead of the time upon which liability would have otherwise arisen.
The respondent's submissions focus on the use of the word 'may': s 56(1) of the Interpretation Act. That is, the fact that the City 'may' accept a Cost Contribution, based on estimates, as a 'final Cost Contribution', evinces that the City may instead treat a Cost Contribution based on estimated costs as only an 'interim' payment.
With respect to both counsel, I do not accept either construction that has been put in me. However, that should not be viewed as a criticism. As I set out at [83], the meaning of cl 6.5.11.4, in the context of cl 6.5 of LPS 3, is far from clear. The submissions made by each counsel are open and, at the very least, arguable.
I must say that the precise meaning of cl 6.5.11.4 is not altogether apparent. To me, it is a good example of a provision that needs to be read and applied in a practical and common sense fashion having regard to its town planning purpose. I also feel compelled to say that the fact these provisions are drawn from the 'model provisions' contained in SPP 3.6 is not ideal.
However, on the crucial point as to whether cl 6.5 allows for the City to require an 'interim' and a subsequent 'final' payment, I cannot accept the respondent's submissions. In general terms, I broadly accept the applicant's submissions on the scheme of cl 6.5, although, as I have explained, I do not accept that cl 6.5 represents an exhaustive code.
Furthermore, while it is unnecessary for me to reach a concluded view, I am not inclined to accept the applicant's submission that cl 6.5.11.4 allows for a local government to reach an 'agreement' with a landowner ahead of that landowner's liability to make a Cost Contribution under cl 6.5 arises.
The language in cl 6.5.11.4 is directed to Cost Contributions being based on the best estimates available. I see no basis to draw from that an inference that cl 6.5.11.4 also allows a local government to accept a 'final Cost Contribution' from a landowner where no liability under cl 6.5 has yet arisen.
I am far from certain that the City would have authority to accept a Cost Contribution in such a situation. While cl 6.5.14.1 provides the City with discretion as to how Cost Contributions may be made, to me, it is difficult to read into that a power to accept a Cost Contribution and discharge a liability, when no such liability has arisen.
I do accept though, that, despite my reservations, the applicant’s submissions have some force. I say this because SPP 3.6 does provide that a voluntary legal agreement may be an appropriate mechanism to levy a development contribution: cl 5.3 of SPP 3.6. That context may properly inform the manner in which cl 6.5.14.1 is read and applied.
However, on the central issue, for the following eight reasons, I do not agree with the respondent that cl 6.5 is a regime that allows for the levying of 'interim' and 'final' payments.
First, if the statutory scheme for development contributions set out in cl 6.5 of LPS 3 was to provide for, or otherwise allow, the respondent to be able to charge an initial development contribution to be followed by a final Contribution Cost once the actual costs were known, it would (or should) be far clearer than what it is.
In this context, in my view the word 'may' in cl 6.5.11.4(b) has to be interpreted sensibly in its context and against the backdrop of cl 6.5 generally. I accept the effect of s 56(1) of the Interpretation Act. However LPS 3 must also be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals: Project Blue Sky at [70].
Where a conflict emerges between the language of different provisions, I must alleviate that conflict, to the extent possible, by adjusting the meaning of the competing provisions to achieve a result that will best give effect to the purpose and language of the provisions while maintaining the unity of all the provisions: Project Blue Sky at [70].
Having regard to these principles, I consider the use of the word 'may' in cl 6.5.11.4(b) is to confirm that the City is authorised to accept Cost Contributions based on estimates only. In its context, the word 'may' is permissive. It does not otherwise allow the City to decide that, what the landowner regards as his or her Cost Contribution is, in fact, only an interim payment.
The 'agreement' that is referenced in cl 6.5.11.4(b) is the agreement that that a Cost Contribution, even a Cost Contribution based on estimates, represents full and final discharge of the landowner's liability under a DCP in a manner acceptable to the City.
Second, in my view, on the proper construction of cl 6.5, once the liability is triggered under cl 6.5.13, the Cost Contribution is, in effect, a one-off payment that is to be made in a manner that is agreeable to the City under cl 6.5.14.
The fact that a Cost Contribution may be paid either as a lump sum or by instalments does not convert cl 6.5 into a scheme that establishes interim and final Cost Contributions.
Furthermore, references to the payments being made in a 'manner' acceptable to the City cannot be reasonably be taken to mean that the City may determine that a Cost Contribution is interim only. In this regard, I accept the applicant's submissions that the reference to 'manner' or 'method' of payment is a reference to the form in which a Cost Contribution is to be paid. In my view, these references cannot be read as empowering the City to require an interim and final Cost Contribution.
Third, the scheme of cl 6.5 of LPS 3 militates heavily against the construction advanced by the respondent with respect to interim payments.
For present purposes, that scheme can be said to be that Cost Contributions are to be determined based on the actual costs expended: cl 6.5.11.1. Where the costs have not been expended the costs are to be based on the best estimates available: cl 6.5.11.2. Where a Cost Contribution is based on estimates, the City is authorised to accept such a contribution as a final Cost Contribution: cl 6.5.11.4. Payment of a Cost Contribution, either based on actual or estimated costs, constitutes full and final discharge of the landowner's liability under the DCP: cl 6.5.14.3. However, if the landowner objects to his or her Cost Contribution he or she has a right to object and seek independent review and, if required, arbitration: cl 6.5.11.6 and cl 6.5.11.7.
In my view, that right to object and seek review of the Cost Contribution must operate, almost exclusively, where the Cost Contribution is based on estimates. That is because, in a practical sense, there is far less scope for objection when the actual cost of infrastructure is known.
My point is simply that if the Cost Contribution arising from an estimated cost is only regarded as interim payment pending a final payment at a later point when all costs are known, then what is the need for a right of objection and review? What purpose does it serve?

Furthermore, if an objection was lodged and the matter did proceed to arbitration, how would an arbitrator's findings on the Cost Contribution that is payable based on estimates impact the 'final Cost Contribution' when the City says it becomes payable? Such questions are left completely unanswered on the respondent's construction of cl 6.5.
In addition, what would be the point of having annual updates of the estimates if the operation of the scheme was based on an 'interim' and subsequent 'final' Cost Contribution? The need for the estimates to be up to date and based on the latest information falls away, almost completely, if the Cost Contribution that is made on those estimates is just an interim contribution where the final contribution is to be assessed once all the costs have been expended.
Fourth, for the same reasons I expressed at [113] and [116], in ascertaining the meaning of cl 6.5 it is necessary, as a matter of context, to consider SPP 3.6. There is nothing in the language of SPP 3.6 which supports the construction of cl 6.5 advanced by the respondent. The word 'interim' is only used once and not in reference to the payment of Cost Contributions.
I extract the following from SPP 3.6:
There are three stages to the imposition of development contributions.
5.3.1Development contributions are formulated and agreed.
The development contribution plan is used to prescribe the cost contributions for owners in a development contribution area. Areas requiring a development contribution plan, and the infrastructure needs and costs for such area, will generally be identified as part of the process of developing or amending planning schemes.
5.3.2.Development contributions are calculated and applied.
Development contributions are generally calculated and applied by way of conditions of subdivision, strata subdivision or development, particularly in greenfield areas. Development contributions may also be sought in infill and redevelopment areas at the time of subdivision, strata subdivision or development.
They may be calculated and applied as
•standard conditions of subdivision or strata subdivision;
•conditions of development.
Alternatively, contributions can be implemented through voluntary legal agreements. This applies to subdivisional works such as roads, drainage and the provision of power, water and telecommunications and other items outlined in appendix 1. They may also be applied as conditions of development. The calculation will be to apply the detail of the developer contribution plan to the development, including any offsets for the ceding of land or construction of infrastructure.
5.3.3.Development contributions become due and payable.
Development contributions become due and payable as part of the subdivision clearance process or prior to the commencement of development. Clearance of deposited plans, or strata plans as the case may be, to enable the issuance of titles, should not occur until full payment, as calculated and applied, has been finalised. Development contributions are only payable on the proportion of land within a plan being requested for clearance in a development.
(emphasis added)
I wish to make two observations arising from the text of SPP 3.6. The first is that the intent of the framework is that DCPs are to be formulated and agreed. That is an important factor here. At any level, it would seem that the construction now advanced by the respondent seeks to, as it were, 'change the goal posts' during the life of the DCA 1.
The second is that there is nothing in the text of SPP 3.6 that would suggest that a DCP, in particular a DCP based on the model provisions contained in Appendix 2, contemplated ongoing liability for landowners after they had made a contribution based on the best available estimates. This is especially so where the text of the policy suggests that titles should not be issued until 'full payment … has been finalised'.
There is nothing in SPP 3.6 which supports the construction advanced by the City. In fact, the opposite is true. SPP 3.6 inclines against the respondent's construction. However, I am mindful that such extrinsic materials cannot answer construction questions, at their highest they provide a context to inform the proper construction.
Fifth, as I noted in Rpoint Land Pty Ltd and Western Australian Planning Commission [2020] WASAT 92 at [70], one of the objects of the PD Act, as set out in s 3(1)(b), is to establish an 'efficient land use planning system'. In this regard see also: Humich Nominees Pty Ltd v Metro East Joint Development Assessment Panel [2019] WASC 200 at [98]-[99], [104] (Smith J).
I consider that the construction of cl 6.5 of LPS 3 advanced by the respondent would be the antithesis of an 'efficient land use planning system'.
On the respondent's construction, regardless of the fact that a landowner paid his or her Cost Contribution in a lump sum, and despite what I regard as the clear meaning of cl 6.5.14.3 that the '[p]ayment [of] … the cost contribution … constitutes full and final discharge of the Owner's liability' (note the phrase 'final Cost Contribution' is not used), the landowner would still have a caveat lodged against his or her land and only when the infrastructure the subject of the DCP has been delivered (which realistically will only be once all landowners have chosen to develop their land) will the final Cost Contribution be known.
Given a landowner's liability may extend over into a future DCP (cl 6.5.13.4) that may mean that landowners - who have paid their Costs Contributions based on the best estimates available at the time - would still be forced to endure a caveat being lodged against their land for an unknown period of time. How can that be regarded as an acceptable, or 'efficient', planning arrangement?
It seems to me that the respondent's case hinges on an argument that the word 'may' in cl 6.5.11.4(b) allows it to, as it were, split the liability to pay a Cost Contribution into an interim and then a final payment. It also says that references to payments being made in a 'manner' that is acceptable and with its 'agreement', support this construction. I disagree. Having regard to the entirety of cl 6.5 of LPS 3, there is no warrant to infer into that scheme a general power to require interim and final payments.
Rather, properly construed, cl 6.5 leaves it for a landowner to make the decision to subdivide or develop at a time of his or her choosing and to pay the Cost Contribution in a manner acceptable to the local government. However, once that Cost Contribution is paid in full whether that be based on the actual costs or on the best estimates (which I note are required to be updated annually) - his or her liability is discharged under cl 6.5 by reason of cl 6.5.14.3. In my view, such a construction accords with the stated objectives of the PD Act.
Sixth, I do not accept the respondent's submissions that the words 'adjust' and 'any' in cl 6.5.11.4(a) are of particular significance. I certainly do not consider that the word 'adjust' operates to capture those landowners who have already made their Cost Contributions.
Read and understood in its context, and applied in common-sense fashion, what the word 'adjust' does mean is that the City is to amend the Cost Contributions for those landowners who remain liable based on the revised estimates. Those landowners who have paid their Cost Contribution have been released from liability by reason of cl 6.5.14.3 are not captured.
The word 'any' in cl 6.5.operates in a similar fashion to 'adjust'. That is, it operates to ensure that the Cost Contribution owed by 'any' landowner who has not yet paid their Cost Contribution for the purposes of cl 6.5.14.3. A landowner who has paid their Cost Contribution is not captured.
Seventh, the respondent's case also emphasises that the City must provide 'certification in writing' once a landowner's liability has been discharged upon payment of the Cost Contribution. The City's case includes an argument that because the City must provide written certification, up and until it does so, it is entitled to regard any Cost Contribution as being, in its words, 'interim'. That is not so.
In my view, cl 6.5.14.3 operates to protect landowners, not the City. Read and applied in context, what cl 6.5.14.3 does provide is that once the Cost Contribution is made based on the CAS established in cl 6.5.10, the City 'shall' provide written certification that the liability has been discharged and any caveat withdrawn.
Clause 6.5.14.3 supports the applicant's construction, not the City's.
Finally, with respect to the respondent's submissions that emphasise the need for payments to be equitable, there are other principles that also need to be taken account of such as 'certainty' and 'efficiency'. At some level these principles are also relevant.
On the question of equity, I agree that it is an important consideration in an overall sense. However, it seems to me that if everyone pays their contribution based on the best information that is available at the time they make that contribution, that is all that can realistically be expected from the scheme as it is set out in cl 6.5. That is, the scheme is as equitable as it reasonably can be.
May I also say that, of course, I am not blind to the fact that as events have unfolded the result, based on my construction, will not be equitable in the sense of a uniform contribution rate being applied.
It would seem that the initial contributors have paid far too much and it would appear that the City also, for a period, misapplied cl 6.5 by not properly calculating the cost of (all of the) infrastructure that was required.
However, wildly inaccurate initial cost estimates and issues with the administration of the scheme are not a mandate to seek to, as it were, rewrite the meaning of cl 6.5 in order to correct these issues. However fair and reasonable the City's cause may be, the text of cl 6.5 of LPS 3, as it currently stands, simply does not permit that reading.
I should also add that, for completeness, having regard to the respondent’s construction, in the context of cl 6.5, there is no mandate for me to give LPS 3 a ‘strained construction’ in order to achieve the City’s objectives. This is so because, as I have found, the statutory purpose in question inclines against the construction advanced by the City: Shire of Serpentine-Jarrahdale and Western Australian Planning Commission [2013] WASAT 71 at [22]-[27]; citing Parks & Playground Movement Inc v Newcastle City Council [2010] NSWLEC 231; (2010) 179 LGERA 346 at [79] (Biscoe J).
In my view, each landowner makes his or her own decision to proceed and take on the liability referenced in cl 6.5.13. There is nothing in the text of cl 6.5 which provides any comfort to a landowner that, if the Cost Contribution a landowner agrees to accept (by progressing with his or her subdivision or development), proves to be high, that he or she will be reimbursed at a later time. That is so because that is not how cl 6.5 operates.
It follows that condition 2 in the manner in form in which it has been imposed is not consistent with cl 6.5 of LPS 3. I turn, now, to address the significance of that conclusion.

Issue 3: Whether condition 2 is valid having regard to LPS 3

As a matter of general principle, I consider that a condition in the nature of condition 2 is not invalid in the sense that is beyond the subject matter, scope and purpose of the PD Act. However, as I have also explained, there are issues with condition 2 in the context of the applicable planning framework that applies to the Land.
I should pause here to observe that my reference to 'invalid' is a reference to whether condition 2 is authorised under the applicable planning framework. I have no authority to make any orders that a condition is 'invalid' in the nature of a declaration: cf s 91 SAT Act. Of course, as these proceedings arise in the Tribunal's review jurisdiction, my task is to make the correct and preferable decision: SAT Act s 27; see also Sin Aus-Bel at [20].
As I have set out at [40]-[42], to be a valid condition, it is of course the case that a condition must meet the requirements set out by McHugh J in Western Australian Planning Commission v Temwood Holdings Pty Ltd (2004) 221 CLR 30 at [57] where His Honour restated the principle derived from Newbury at 599, 607 - 608, 618 and 628.
Condition 2 raises a fundamental problem for the City regardless of Newbury. I reiterate that the provisions of LPS 3, including cl 6.5, have been approved pursuant to Pt 4 of the PD Act. Accordingly, they 'have force and effect as if enacted' by the PD Act: s 87(4) PD Act; Scutti at [125(9)].
As the Tribunal correctly observed in Barwell, as a matter of law, it is simply not possible, at least in the context of an application for development approval, for a planning condition to be inconsistent with the terms of LPS 3.
This is because the power to regulate development, and to levy development contributions, and to impose conditions thereon, is derived from LPS 3. A planning condition cannot be inconsistent with the source of its power. To borrow from the constitutional law principle set out by Fullagar J in Australian Community Party v Commonwealth [1951] HCA 5; (1951) 83 CLR 1 'a stream cannot rise higher than its source': at 258; see also Kakulas and City of Stirling [2013] WASAT 168 at [22].
In his submissions, Mr Jackson (ts 31-33, 10 December 2020) identified the following inconsistencies between condition 2 and cl 6.5 of LPS 3.
First, condition 2 seeks to impose liability for development contributions on a basis that is different to that provided for in cl 6.5. This is because condition 2 requires the development contributions to be calculated only by reference to the actual costs incurred at the end of construction of the relevant infrastructure, rather than the Cost Contribution being fixed (either as actual or estimated costs) at the time the, in this instance, development is commenced.
Second, condition 2 would allow an applicant to be liable for an unknown sum that will remain unknown (and in fact unknowable) for an indeterminate period of time. Clause 6.5 of LPS 3, on the other hand, provides for liability to be incurred for a particular sum at a particular date as determined pursuant to cl 6.5.13.2.
Third, condition 2 provides for payment to be made on a basis different to that provided by cl 6.5. In particular, condition 2 requires payment 'prior to the issue of an occupancy permit' whereas cl 6.5.14 provides for payment by way of a number of different methods, including the prospect, with the City's agreement, for payments to be made by way of instalments.
Fourth, condition 2 provides for security by way of a charge which varies from that in cl 6.5. Clause 6.5.15.1 applies where a landowner's liability has arisen but where the Cost Contribution has not yet been paid. However, condition 2(b) allows for security by way of a charge in relation to an unstated, unknown and unknowable amount for which a landowner is not yet liable to pay.
Finally, while cl 6.5.17 provides for the possibility of either a shortfall or excess of funds, condition 2 is premised on the basis that the DCP is required to be administered so as to achieve neither of these eventualities.
In general terms, I accept the applicant's submissions on this issue. While the City made detailed submissions that sought to counter the applicant's arguments, I do not accept these. This is because, to me, they are rather beside the point. For example, to the extent that a 'final Cost Contribution' will be, in the applicant's terms, 'unknowable' for a period of time, the City's evidence and submissions in reply are that it is confident it will know all the Cost Contributions by 2023: ts 49, 20 December 2020.
As I said, the submission does not quite grapple with the argument being put. It does not matter the exact length of time the uncertainty for landowners endures, it is the fact that it has to be endured at all.
In my view, cl 6.5 of LPS 3 should be construed in a manner that leaves it open for the landowner the time at which he or she chooses to become liable to make a Cost Contribution. That is to say, to take the step under cl 6.5.13.2. Further, and equally, it is also for the landowner to discharge themselves from that liability (in a manner acceptable to the City) at the time he or she wishes to. This is achieved by paying the Cost Contribution in full and, from that point, having the shield provided by cl 6.5.14.3.
The City also considers that the construction it advances is 'consistent as possible with the principles of equity and consistency, and therefore consistent with the principles of cl 6.5'. I have already addressed the City's submissions in this regard at [173]-[174]. For present purposes, it is suffice to say that equity is not the only lodestar that is relevant in the preparation of a DCP and, furthermore, the principle of equity is not the same as equality.
In this instance, condition 2 purports to vary, to a significant degree, the terms of cl 6.5 by importing an interim payment regime in circumstances where, as I have found, there is no power for contributions to be levied in such a manner based on the text of LPS 3.
While I have found that a planning condition may legitimately 'plug some gap' in the regime created by cl 6.5, it cannot rewrite cl 6.5.
It follows that condition 2, as currently drafted, cannot stand. On its terms, it is a condition that is not authorised by, nor consistent with, the planning framework, namely LPS 3.

Section 242 of the PD Act submission

It is appropriate, before I finish, that I record that I have had regard to the submission made by David Downing pursuant to s 242 of the PD Act. Mr Downing owns land within DCA 1. He is concerned that the City is seeking to apply cl 6.5 of LPS 3 in a manner inconsistent with its express terms.
Mr Downing's submissions set out that the genesis of the City's 'reinterpretation' of cl 6.5 arose from complaints made by landowners who had previously paid about the revised rate of $17.01 that was declared in December 2018. The City does not dispute the fact that the basis of its more recent interpretation of cl 6.5 of LPS 3 arose from complaints made by landowners who had made their Cost Contributions.
For the reasons I have explained, I agree with Mr Downing that cl 6.5 of LPS 3 does not permit the City to impose interim and final Cost Contributions as expressed in condition 2.

Issue 4: Whether condition 2 is legally unreasonable

By reason of my conclusions on issue 3, it is not strictly necessary for me to address in detail the question of whether condition 2 is legally unreasonable for the purposes of Newbury. However, in order to fully address the arguments put to me, I will.
In terms of general principles, Newbury adopts as its third limb the administrative law test of legal unreasonableness in the sense outlined in Associated Provincial Picture Houses Ltd v Wednesbury Corp [1948] 1 KB 223.
More recently, the language in relation to legal unreasonableness has included the concept of 'irrationality', being the absence of 'evident and intelligible justification' for the decision, having regard to the scope and purpose of the power': Minister for Immigration and Citizenship v Li [2013] HCA 8; (2013) 249 CLR 332 (French CJ, Hayne J, Kiefel J, Bell J and Gageler J).
As is the case here, this aspect of Newbury is rarely argued as a stand alone ground. In Temwood, Callinan J (at [155]) doubted whether the third limb of Newbury was needed. Now is not the occasion to engage with that debate.
I do note, however, that Smith J recently quashed a development approval condition on the basis of legal unreasonableness in Humich Nominees Pty Ltd v Metro East Joint Development Assessment Panel [2019] WASC 200 (Humich Nominees).

The background to Humich Nominees was that the relevant Joint Development Assessment Panel had issues two separate approvals to two different sites, the approval conditions for which could not be reconciled.
Her Honour found (at [104]) that such a result was legally unreasonable because the condition in question lacked 'both justification and intelligibility in light of the object and purpose of the PD Act', which is to provide for an efficient and effective land use planning system. An appeal against her Honour's decision has not yet been determined.
Turning now to the issues before me, if I had found that condition 2 was authorised by LPS 3 - and that a regime of interim and then final payments was permissible under cl 6.5 I would then be slow to reach a determination that a condition that was authorised by the planning framework was legally unreasonable.
However, in my view, it seems to me that a condition that is not authorised by the planning framework cannot be legally reasonable. That is so because condition 2 is a condition that no reasonable planning authority would impose because it impermissibly exposes landowners to unknown liabilities for an unknown duration.
Condition 2 is legally unreasonable.

Issue 5: Whether condition 2 should be varied to be consistent with LPS 3

I have power to vary condition 2: s 29(3)(b) SAT Act; see also Stream Focus Pty Ltd v City of Armadale [2018] WASC 13 at [30] (Smith J); Stream Focus Pty Ltd v City of Armadale [2018] WASCA 196; (2018) 233 LGERA 299 at [38] (Buss P, Mitchell JA, Allanson J).
Mr Jackson's submissions, in the event that I did not accept his argument that cl 6.5 of LPS 3 operates as an exhaustive code, were that I have power to vary condition 2: ts 40, 10 December 2020.
However, Mr Jackson cautioned that I should not impose a condition in such a manner that varies what cl 6.5 actually provides for. To be more precise, he cautioned that I should not, as it were, attempt to re-draft condition 2 to provide for an interim and final payment regime that is sought by the City.
For the reasons I have explained, I accept that submission. Any condition that is imposed must be consistent with LPS 3. To be clear: I reiterate that cl 6.5 of LPS 3 does not, in my view, permit a regime of interim and final payments.
Given that the City has chosen to include conditions relating to the development contributions on development approvals, I consider that it is appropriate a revised condition 2 be imposed.
In his closing address, Mr Jackson accepted that, a revised condition 2 'framed in such a bland way as to simply require compliance with cl 6.5' would be acceptable: ts 84, 10 December 2020.
Mr McLeod did not make any submissions to the contrary as to how condition 2 might be revised.
I agree with Mr Jackson. In the circumstances of this case, the correct and preferable decision is to revise condition 2 to ensure that it is consistent with LPS 3.
Amendment 105 to LPS 3
Before I finalise this matter, I will, for completeness, address the respondent's submissions that I should, pursuant to cl 67(2)(b) of the deemed provisions, have 'due regard' to Amendment 105 to LPS 3.
Amendment 105 is a proposed amendment that seeks to revise and clarify the manner in which cost calculations in order to ensure equity and consistency. Mr McLeod's written and oral submissions addressed Amendment 105 (ts 65-69, 10 December 2020), as did the evidence of Mr Varelis: Exhibit 5 at para 83.
Amendment 105 was adopted by the Council of the City on 22 September 2020 and was advertised for public submissions on 30 October 2020. Amendment 105 is a 'complex amendment' for the purposes of Pt 5 of the LPS Regulations.
For two reasons, I do not consider that Amendment 105 informs the issues before me. First, Amendment 105 is an amendment that goes to how a cost contribution is quantified and calculated. That is not the reviewable decision before me. Second, the amendment does not seek to introduce into cl 6.5 a scheme of interim and final payments. It simply seeks to change the formula by which cost contributions are calculated.
Furthermore, even if I were to accept that I should have due regard to Amendment 105, there is simply no evidence before me at whether it is 'certain' or 'imminent' in the sense explained in Nicholls and Western Australian Planning Commission [2005] WASAT 40; (2005) 149 LGERA 117 at [59] as modified, in the light of the deemed provisions, in Terra Spei Pty Ltd and Shire of Kalamunda [2015] WASAT 134 at [206].
In such circumstances, I would not give Amendment 105 any substantial weight.
Conclusions
For these reasons, the correct and preferable decision is that condition 2 be amended to read as follows:
'Arrangements being made to the satisfaction of the City of Kalamunda to ensure that a development contribution will be made pursuant to cl 6.5 of the City of Kalamunda Local Planning Scheme No 3'.

Orders

The Tribunal orders:
1.The application for review is allowed in part. The decision under review is varied as per order 2.
2.Pursuant to s 29(3)(b) of the State Administrative Tribunal Act 2004 (WA), condition 2 of the respondent's 'notice of determination on application for planning approval' dated 12 March 2020 is deleted and is to be replaced with the following:
Arrangements being made to the satisfaction of the City of Kalamunda to ensure that a development contribution will be made pursuant to cl 6.5 of the City of Kalamunda Local Planning Scheme No 3.

I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
DR S WILLEY, SENIOR MEMBER
11 MARCH 2021