Hervey Bay Developments Pty Ltd v Hervey Bay City Council

[1994] QCA 216

IN THE COURT OF APPEAL	[1994] QCA 216
SUPREME COURT OF QUEENSLAND

Appeal No. 160 of 1993 Appeal No. 161 of 1993

Brisbane

[Hervey Bay Developments v. Hervey Bay Council]

BETWEEN:

HERVEY BAY DEVELOPMENTS PTY LTD

(Appellant)

Appellant

-and-

COUNCIL OF THE CITY OF HERVEY BAY

(Respondent)

Respondent

The Chief Justice
Mr Justice McPherson

Mr Justice Byrne

Judgment delivered 17/06/94

Reasons for Judgment - The Court

APPEAL DISMISSED WITH COSTS TO THE RESPONDENT TO BE TAXED.

CATCHWORDS:	PLANNING AND ENVIRONMENT - local government - rezoning and subdivision of land - whether Council can require security at the rezoning stage rather than subdivision stage - whether Council could require parkland contributions pursuant to a subdivision by-law - whether subdivision by-law invalid - whether sufficient evidence below to justify certain conclusions.
Counsel:	Mr Griffin, with him Mr Litster, for the appellant Mr Hughes for the respondent
Solicitors:	Corser Shelden and Gordon for the appellant Morten & Morten, Maryborough for the respondent
Hearing Date:	27/04/94

IN THE COURT OF APPEAL
SUPREME COURT OF QUEENSLAND

Appeal No. 160 of 1993 Appeal No. 161 of 1993

Brisbane

Before The Chief Justice

Mr Justice McPherson

Mr Justice Byrne

[Hervey Bay Developments v. Hervey Bay City Council]

BETWEEN:

HERVEY BAY DEVELOPMENTS PTY LTD

(Appellant)

Appellant

-and-

COUNCIL OF THE CITY OF HERVEY BAY

(Respondent)

Respondent

REASONS FOR JUDGMENT - THE CHIEF JUSTICE

Judgment delivered 17/06/94

The appellant applied to the respondent Council for the rezoning of two parcels of land from Rural B to Residential A zoning. The parcels were adjacent but did not adjoin and both had frontages to Urangan Street, Torquay. They were identified as Lots 1 and 4. The application which was made to the respondent Council was a combined one, i.e. it sought a rezoning and subdivisional approval as well, and it was made pursuant to section 4.11 of the Local Government (Planning and Environment) Act 1990.

The respondent refused the application and an appeal was taken by the appellant to the Planning and Environment Court but, prior to the hearing in that court, a number of matters were settled by agreement and, as the judge described the situation in his reasons, "the respondent took the attitude that it would not oppose the rezoning and subdivision of the land provided that the relevant approvals were subject to certain conditions which were put before (him) as Exhibit 6. The appeal resolved itself into a discussion as to the appropriateness of certain of these conditions."

The first group of conditions which were disputed below related to the rezoning aspects of the application. The ones which remained in dispute following the judge's decision and so constituted matters in issue on the appeal to this court were the following, which applied to both Lot 1 and Lot 4:

"Lot 1. 1.	Works external and/or contributions, fees or charges shall be paid or completed or be subject to such bond/guarantee or security in such form and in such amount as shall be acceptable to Council, prior to the submission of any application for rezoning by the appropriate Minister for approval thereof and subsequent notification thereof by Order in Council in the Government Gazette.
2. Either:-

(a)

Provide security of $170,000 in such form as shall be acceptable to Council for the provision of the construction of drainage works to Council's standard on the northern side of Urangan Street; OR

(b)

Provided Council has completed the drainage works as required in Condition 2(a) to the satisfaction of Council's Engineer, the developer shall pay a contribution of $30,119 (=$6,317 x 2.17 ha.) towards stormwater drainage headworks for the Urangan Street Catchment. Such amount being in accordance with Council's policy as currently enforced by Council resolution. The amount is fixed for a period of 30 days from the date of notification and thereafter the amount shall be determined on the basis of Council policy existing at the time of payment.

3.          Provide security of $98,500 in such form as shall be unacceptable (sic) to Council for the construction of roadworks in Urangan Street.

4.          Provide security of $23,800 in such form as shall be acceptable to Council for the construction of roadworks in Urangan Street.

Lot 4.

1.

Works external and/or contributions, fees or charges shall be paid or completed or be subject to such bond/guarantee or security in such form and in such amount as shall be acceptable to Council, prior to the submission of any application for rezoning by the appropriate Minister for approval thereof and subsequent notification thereof by Order in Council in the Government Gazette.

2.

Either:-

(a)	Provide security of $190,000 in such form as shall be acceptable to Council for the provision of the construction of drainage works to Council's standard on the northern side of Urangan Street; OR
(b)	Provided Council has completed the drainage works as required in Condition 2(a) to the satisfaction of Council's Engineer, the developer shall pay a contribution of $30,119 (=$6,317 x 4.768 ha.) towards stormwater drainage headworks for the Urangan Street Catchment.

Such amount being in accordance with Council's policy as currently enforced by Council resolution. The amount is fixed for a period of 30 days from the date of notification and thereafter the amount shall be determined on the basis of Council policy existing at the time of payment.

3.          Provide security of $123,500 in such form as shall be unacceptable (sic) to Council for the construction of roadworks in Urangan Street.

4.          Provide security of $35,300 in such form as shall be acceptable to Council for the construction of roadworks in Urangan Street."

The judge described these conditions in his reasons in this fashion:

"It can be seen that these conditions call for the provision of security for (or the payment of) contribution to the costs of drainage, road and water reticulation works external to the site and for the purposes of argument it does not appear to be disputed that these works are such as would be reasonably required to provide the subject land with drainage, road and water reticulation services commensurate with Residential A use."

The judge's statement of what was not disputed was, before us, accepted as being an accurate summary but in conceding this, counsel for the appellant emphasised the word "use" which ends the quotation just given. It was a fundamental contention of the appellant that while contributions to the cost of external services of the kinds referred to could legitimately be imposed as conditions of subdivisional approval, they were premature and impermissible when imposed as conditions of rezoning approval. The judge rejected this contention declaring that it was in order for a planning authority to ensure, by the imposition of conditions at the time of rezoning approval, that arrangements were in place for the provision of services commensurate with the zoning changes sought. The judge concluded that the conditions described in the terms quoted above were valid and reasonable.

Some subsidiary arguments which will be referred to later were also advanced against the validity of the particular conditions especially those which required security and were imposed on the rezoning approval for both parcels.

Apart from the above, the remaining issues in dispute were concerned with conditions imposed on the subdivisional approval for the two parcels.

The first disputed condition of subdivisional approval was concerned with the standard to which road sealing on Urangan Street could properly be demanded. The separated Urangan Street frontages of the two parcels were required to be sealed with 25mm asphalt seal under the Council's conditions of subdivision but the appellant contended that this was unnecessary and suggested that a cheaper finish by sealing with primer coat and two coats of flush bitumen would be sufficient and should have been adopted. The appellant's subdivisional plan showed that seven allotments in Lot 1 and four allotments in Lot 4 had frontages to Urangan Street.

The judge rejected the appellant's contention and ruled that the requirement of the Council was valid and reasonable.

The final condition of subdivisional approval which remained in dispute was imposed on Lot 4. This required the provision of public open space by transfer to the Council of an area not less than ten per cent of the land to be developed with the space generally in accordance with a certain strategy plan which had been prepared for the Council. The Council had a Subdivision of Land By-Law, Part 14 of Chapter 35 which, in the case of a parcel the size of Lot 4 and with the number of allotments proposed for it, ruled out the imposition of a monetary contribution but authorised a requirement that ten per cent of the area to be subdivided be provided for public garden and recreation space. The appellant's argument questioned the validity both of Part 14 and the exercise of the Council's discretion in this matter but those arguments which will be considered in more detail later, were not accepted by the judge.

In the appeal which has been brought to this court challenging the judge's rulings, it will be necessary for the appellant to demonstrate an error of law if it is to succeed: section 7.4(3).

The conditions imposed on the rezoning approval will be considered first. They dealt with external drainage, road, and water reticulation works and the provision of security in respect of them.

Applicants in the position the appellant was in would understandably be attracted by the higher market value which an unconditional change of zoning from Rural B to Residential A might be expected to bring. The argument for the appellant was that the change of zoning itself brought no higher population density or additional pressure on essential services and that while the services in question would be required when a residential use commenced, it would meet the situation if the conditions in question were imposed only on the subdivisional approval and not on the zoning approval. As against that proposition, counsel for the respondent pointed to the fact that conditions imposed on rezoning represented a more permanent change in status of the land and ran with the land itself (section 4.4(12)(b)) and that while a similar character was attached to subdivisional approval (section 5.1(8)) the conditions in that case lapsed when the particular subdivisional approval, which could be expected to be more transitory in nature, itself lapsed or was superseded (section 5.4(3)). In that eventuality, the land might have been rezoned, but no conditions would remain if they had been imposed solely on the subdivisional approval. Also, it was contended that it was perfectly appropriate to have attached in the form of conditions on the rezoning, such provisions as were relevant to the user which could be expected to follow the rezoning.

When an application is made to change zoning from rural to residential, a local authority must consider how it should proceed and theoretically a number of choices would be available. It could accept the proposed rezoning without imposing any conditions; it could insist on the provision of facilities or a contribution from the applicant towards the cost of facilities that would be necessary when the expected user followed the rezoning, or, it could simply insist that security be provided to cover the future cost of those facilities. Obviously, the second course, that of insisting on immediate provision of the works or contribution towards their cost, would be the least attractive to an applicant and could be unreasonable especially in view of the risk that the rezoning application might not succeed in gaining Governor-in-Council approval. On the other hand, nothing in the Act requires acceptance of the proposition that the Council is disentitled, at the rezoning stage, from imposing conditions which are designed to ensure the future availability of the relevant services. Some assessment will be called for from the local authority of what the circumstances require. There is an express general power to impose conditions at the stage when a local authority accepts a proposed rezoning (section 4.4(5)) although those conditions cannot exceed what is relevant and reasonably required (section 6.1(1)). At the stage of application for rezoning when a potential for subdivision exists in the zone, the local authority is specifically required to assess the extent to which water, gas, electricity, sewerage and other essential services should be made available (section 4.4(3)(e)).

The Planning and Environment Court itself has a wide power to impose conditions when an appeal is brought to it (section 7.1A(3)). In a situation where assessments are called for and discretions have to be exercised it may not be easy for a dissatisfied applicant to point to an error of law when it brings an appeal to this court. The appellant's general challenge to the fact that the conditions in question were imposed upon the rezoning application rather than solely upon the subdivisional application lacks substance and should be dismissed. The conclusion just expressed leaves for consideration the appellant's particular objection to the conditions which required security and its contentions that they are beyond power.

The appellant argues that there is a limit upon a local authority's power to ensure the effectiveness of conditions which it wishes to impose in respect of external works, even when the conditions are, in themselves, reasonable requirements. Its argument is that the power to insist on security is limited.

It was said that even if the local authority is legally entitled to require that a contribution to external works be made immediately as a condition of rezoning, it cannot validly insist on security unless the works in question are to be carried out by the applicant.

This rather surprising proposition is derived by the appellant from the wording of section 4.4(6)(a) which contains the phrase, "may require as a condition the lodgment of security to its satisfaction by the applicant that the applicant will execute work to be done". However, bearing in mind the general power to impose conditions, provided always that they are relevant and reasonable, there seems no reason for an interpretation which would place a restriction on a local authority's power to protect its entitlement to recover a contribution from an applicant in a case where, most desirably from an applicant's point of view, the local authority is prepared to defer payment in respect of the cost of work to be carried out subsequently rather than insist upon it "up front" as a condition of rezoning. Arranging an appropriate guarantee of future payment is really only a subsidiary aspect of a power to insist on payment and could reasonably be regarded as included within it. It should not be regarded as excluded by a collateral provision, section 4.4(6), that is designed to apply in the different case where it is to be left to an applicant to execute the work which is the subject of the condition. While it may cause some surprise that it was thought necessary in section 4.4(6) to include a special provision to secure the performance of work to be performed by an applicant, it should not result in a reading down of a distinct general power which appears wide enough to sustain the imposition of an effective condition that money should be paid by an applicant at some future date. Once a rezoning is achieved, it may be difficult to enforce a condition for the payment of a contribution and in these circumstances, commonsense would seem to suggest that if a condition for payment of a contribution can validly be imposed, a provision which makes the condition effective can also be included. Nothing in the Act expressly forbids the taking of security attached to a condition for the payment of a contribution. So far as a contribution relates to the cost of water supply, section 6.2(2) expressly authorises it but such a provision is not unexpected in a section dealing specifically with water supply and sewerage and once again should not be taken to limit the effect of the general power in respect of conditions. The appellant's arguments questioning the validity of the conditions regarding security should be rejected.

The conditions concerned with road sealing standards imposed in respect of the subdivisional approvals will be considered next.

It will be recalled that the standard imposed by the Council and upheld by the judge, required that the sections of Urangan Street in front of each of the two lots the subject of the application, should be constructed by the applicant and sealed with 25mm of asphalt. The appellant contended for the cheaper standard of primer coat and two coats of flush bitumen.

The submission of counsel for the appellant was that an error of law appeared in the judge's reasons which upheld the Council's condition because, it was said, no evidence supported the condition and nothing more than bare policy could be pointed to in justification. This, however, is incorrect.

The Council's "road hierarchy policy" in Table 1 shows that Rural B zone has the two coat seal standard but the Residential A zone has the 25mm asphalt standard. It further appeared that the appellant itself had accepted the residential standard for the internal subdivisional roads which it proposed within Lots 1 and 4. This acceptance by the appellant gave a certain weight to the Council's residential road standard. In addition, one of the witnesses, Bellero, said that although the asphalt finish was more expensive than seal coat it was quieter under conditions of traffic flow and also that it constituted a standard for roads in a residential area which he regarded as reasonable. The judge was quite justified in coming to the conclusion that he did on this aspect and no error has been shown.

The final matter for consideration is the requirement for public open space under the conditions imposed in respect of Lot 4 subdivisional approval. This called for the transfer to the Council of ten per cent of the land to be developed. If the Council's Subdivision By-Law Part 14 of Chap.35 were upheld, then the validity of the condition would be amply supported since, for a parcel possessing the subject land's features, the terms of Part 14 expressly authorised the Council to "require the applicant for approval of a proposed plan to provide for public garden and recreation space of ... ten per centum of the total area of the land to be subdivided ...".

Counsel for the respondent supported the "park" condition that had been imposed by a reference first to the general power in section 5.6. This subsection (1) reads:

(a)

Where in respect of land the subject of an application to subdivide, land has not been previously surrendered for parks or a contribution made to a Local Authority instead of a surrender, the Local Authority may require as a condition of approval of an application to subdivide land for residential, commercial or industrial use, whether or not by way of a staged subdivision, that -

(i)	an area of land be provided for use as a park;
(ii)	a monetary contribution be paid to the Local Authority in substitution for the provision of that area of land;
(iii)	works be provided for the improvement of land for use as a park (including the development of recreational facilities);

or

(iv)                    any combination of paragraphs (i), (ii), and (iii) be implemented.

(b) A combination referred to in paragraph (a) is not to exceed the maximum area or monetary value provided for in this section."

The judge considered that if By-Law Part 14 applied then the Council had no discretion to depart from a ten per cent requirement so that the imposition of a condition to that effect was sustainable and, on the other hand, if Part 14 did not apply, then it was not shown that any applicable discretion was erroneously exercised. If this approach is correct, the result would be that no error of law was shown.

Provisions of the Act which confer a wide general discretion on the local authority in respect of conditions have been referred to above: section 4.4(5) and section 6.1(1). Although the specific provisions of section 5.6 will, when they are applicable, introduce some limitations upon a local authority's general power, there seems to be no need to approach section 5.6 with the assumption that the general provisions are totally excluded so that there would be no power to impose a park area condition other than in the specific cases to which section 5.6 refers, i.e. when the Council has a relevant local planning policy, a planning scheme, or a subdivision of land by-law. It does not, with respect, appear that all of the reasoning of Row D.C.J. in Heilbronn and Partners v Pine Rivers Shire Council (1993) Q.P.L.R. 91 in respect of section 5.6 when it stood in a somewhat different form, should be accepted as correct. Furthermore, it does not appear essential that in the present case a residual general power for a local authority to determine park contribution conditions must be found to support the relevant condition on subdivisional approval. It should not be accepted that By Law 14 is wholly invalid even if it were able to be demonstrated that selected parts of it may not conform with the 1990 Act (this last aspect need not be examined further). There is no necessary intention shown in the Act to "cover the field" in respect of park contributions in a way that would impliedly repeal all parts of a subdivisional by-law even when not inconsistent with specific provisions in the Act. In fact, section 8(10)(6) discloses an intention to preserve the operation of any existing subdivision of land by-law "to the extent it conforms with the Act". On this basis, section 5.6(7)(b) preserves that portion of the Part 14 By-law which provides for a ten per cent contribution since it is in line with the maximum percentage contribution referred to in section 5.6(2)(b) that applies in this case. There is no need to consider further whether section 5.6 in respect of the general quantum of park contribution may give a broad discretion up to a maximum of ten per cent but not exceeding the amount prescribed in any applicable local planning policy or, in the absence of a policy, a planning scheme or in, further default, a subdivision of land by-law. That is there is no need to consider whether the true effect is that there exists a general discretion as stated rather than that there is no discretion to impose any requirement at all in the absence of a policy, scheme or by-law as the reasoning in Heilbronn's case (supra) may appear to suggest.

The result is that the appellant's arguments on this point fail also.
The appeal should be dismissed with costs to the respondent to be taxed.