Konann Pty Ltd v Casey City Council

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

VALUATION COMPENSATION AND PLANNING LIST

S CI 2017 03357

KONANN PTY LTD (ACN 084 100 149)	Plaintiff
v
CASEY CITY COUNCIL (in its capacity as collecting agency of the Cranbourne North Precinct Structure Plan – Development Contributions Plan)	Defendant

---

JUDGE:	GARDE J
WHERE HELD:	Melbourne
DATES OF HEARING:	14–17 May 2018, 10–12 July 2018
DATE OF JUDGMENT:	27 September 2018
CASE MAY BE CITED AS:	Konann Pty Ltd v Casey City Council
MEDIUM NEUTRAL CITATION:	[2018] VSC 565

---

PLANNING – Development contributions – Infrastructure levies – Precinct Structure Plan – Development Contributions Plan – Infrastructure works to be constructed under a development contributions plan completed by developer – Duties and powers of collecting agency – Extent of credit or refund payable to developer – How determined – Double dipping – Planning and Environment Act 1987 (Vic) pt 3B, s 46P(2) – Casey City Council v Carson Simpson (2007) 18 VR 19 (Osborn J) considered.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr G. Harris QC with Ms M. Chorn	Sinisgalli Foster Legal
For the Defendant	Mr A. Finanzio SC with Ms S. Gory	Maddocks

HIS HONOUR:

Introduction

Konann Pty Ltd (‘Konann’) is the developer of the Tulliallan estate (‘the estate’) of about 77 hectares located in the urban growth area of Cranbourne North.

Casey City Council (‘the Council’) is the responsible authority for the Casey Planning Scheme (‘the planning scheme’). The Council is both the collecting agency and the development agency under the Cranbourne North Development Contributions Plan (‘the DCP’). The planning scheme makes provision for the construction of infrastructure specified in the DCP through development contributions levies collected under pt 3B of the Planning and Environment Act 1987 (Vic) (‘PE Act’).

The DCP provides for the construction of a significant public road intersection on the northern boundary of the estate, at the intersection of Glasscocks Road and Wheelers Park Drive (‘the intersection’), in a particular configuration described in the DCP. [1]
[1]Wheelers Park Drive was previously known as White Connector Street or White Street.

In May 2014, a planning permit was granted for the development of the estate as a multi lot residential sub-division. A condition of the permit required the construction of the intersection. Konann constructed the intersection, including the western, southern and eastern parts of the intersection (‘the intersection works’). The intersection works cost Konann $3.66 million. The dispute is about who should pay for the intersection works.

Under s 46P(2) of the PE Act, the Council as the relevant collecting agency has power to accept land, works, services or facilities in lieu of levy. Under the existing law, no merits review is available from the Council’s decision under that provision.

In this proceeding, Konann seeks a declaration from the Court that the value of the intersection works accepted by the Council, is the fair and reasonable value of the works amounting to $3.66 million to be credited against its DCP liability (‘levy liability’), or refunded to it. It also seeks an order in the nature of mandamus - not generally, but compelling the Council to provide a credit or refund in this amount against its levy liability.

Konann has paid over $16 million to the Council in development infrastructure levies under the DCP. In essence, Konann seeks a decision by the Court that it is entitled to deduct all of its expenditure on the infrastructure works (amounting in all to $3.66 million) from its outstanding levy liability or receive an equivalent refund. It claims that the Council has failed in its statutory duty under s 46P(2) of the PE Act by not doing so.

Background

The dispute concerns the DCP and the infrastructure project identified within it, as project RD-18 ‘Intersection North South–Connector and Glasscocks Rd’. The DCP plan for project RD-18 shows the construction of a signalised intersection for a rectangular area, and the northern approach to the intersection along Wheelers Park Drive.

The estimated cost of the intersection works shown in the DCP for project RD-18 is $2,119,500, comprising $933,066.70 for the construction of the rectangular area and approximately $1.2 million for the northern approach. A 20% contingency allowance is built into the DCP’s estimated costs.

The intersection works completed by Konann include the rectangular area specified in the DCP, but not the northern approach. Konnan also completed works to the western, southern, and eastern approaches to the intersection. Konann provided signalisation at a reduced cost, and did not need the contingency allowance.

The Council attributes an actual cost of $630,000 to the work performed by Konann in installing signals and in constructing the rectangular area of the DCP. The balance of Konann’s construction cost (about $2.9 million), is attributed by the Council to the cost of constructing the western, eastern and southern approaches of the intersection works. These are non-DCP works.

The proceeding was conducted by way of affidavit. Numerous documents were exhibited to the affidavits. There was no cross-examination. There is no dispute as to the underlying facts, although there may be a dispute about the value to be ascribed to the intersection works, or apportioned to parts of the works.

The infrastructure development framework
The 2007 DCP

The DCP establishes a framework for development proponents to make financial contributions towards the cost of identified infrastructure projects. The previous DCP for Cranbourne North was made in 2007 (‘the 2007 DCP’), and was incorporated into the planning scheme by Amendment C77 Part 2. The 2007 DCP contained a project, albeit in more rudimentary form, for the provision of a signalised intersection on Glasscocks Road near to the intersection. DCP project RD-18 replaced the earlier project. When the 2007 DCP was approved, there was no precinct structure plan (‘PSP’).

Introduction of the PSP

On 18 August 2011, Amendment C125 to the planning scheme was approved by Ministerial amendment under s 20(4) of the PE Act. Amendment C125 implemented the Cranbourne North (Stage 2) Precinct Structure Plan, and:

(a)incorporated the PSP and the DCP into the planning scheme;
(b)replaced the 2007 DCP;
(c)rezoned the land subject to the amendment, including the estate, to the Urban Growth Zone Schedule 5;
(d)introduced a Development Contributions Plan Overlay (‘DCP Overlay’);
(e)introduced Schedule 5 to the Urban Growth Zone; and
(f)replaced Schedule 11 to the DCP Overlay with a new Schedule.

The PSP and DCP are parts of the planning scheme, and were prepared by the Growth Areas Authority (now the Victorian Planning Authority), with the assistance of the Council and other agencies. The PSP might be described as the modern version of an outline development plan, or as a master plan for subdivision. It was intended to guide urban development, and described how land affected by it was expected to be developed, and how and where infrastructure and services were planned to support development.

Together with the DCP overlay, and the related provisions of the planning scheme, the DCP and PSP represent a co-ordinated strategy for subdivision and development in accordance with the plans set out in the PSP. They are the foundational documents for the grant of permits, and for the development of the Cranbourne North area including the estate.

PSP plans

Plans in the PSP show the intersection as a signalised intersection between a four lane major road travelling east-west (Glasscocks Road), a divided two lane connector street travelling south (Wheelers Park Drive), and a local access street to the north. The plan in the DCP depicts the east and west approaches to the intersection as having two through lanes, and separate left turning and right turning lanes. The north-south connector street has two lanes on each approach, a shared left and through lane, and a right turning lane. The intersection is signalised.

Construction of the intersection works
Traffic studies

In June 2013, traffic engineers retained by Konann prepared a traffic engineering assessment (‘the traffic report’) in support of the permit application for the subdivision of the estate. In the report, the engineers said that particular attention had been paid to the requirements of the PSP.

The traffic report noted that the traffic volumes for the estate were included in the modelling of the wider road network, and could adequately be accommodated on the external road network, subject to the timely provision of the necessary infrastructure. Referring to the DCP, the report stated that the intersection would be required for the full development of the estate, and ‘may comprise works in kind as a stage of the subdivision’. Once sufficient funds from the sale of lots had been raised, the construction of Wheelers Park Drive and the signalised intersection could occur along with the development of the rest of the estate.

By December 2013, Konann’s traffic engineers had prepared interim and ultimate functional layout plans for the intersection. Their plans were discussed at a meeting on 5 February 2014 involving traffic engineers and officers of the Council and VicRoads. Following some modifications, on 17 April 2014 VicRoads advised the Council of its acceptance of the functional layout plans.

The permit

On 1 May 2014, the Council issued a permit for the residential subdivision of the estate (‘the permit’). The permit approved the subdivision of the estate, the construction of buildings and works including roadworks and street furniture.

Condition 4 required an amended subdivision layout plan to the satisfaction of the Council. It provided:

4.…
The plans must be generally in accordance with the plan submitted with the application prepared by [plan specified] but modified to show:
…
(d)Intersections with Glasscocks Road and Berwick-Cranbourne Road noted to be designed to comply with plans approved by VicRoads and the Responsible Authority.
(e)The Glasscocks Road and Wheelers Park Drive intersection within Stage 6, unless otherwise agreed by VicRoads.
(f)The location of the western boundary of the land to the north of Glasscocks Road that will ultimately accommodate the northern leg of the Wheelers Park Drive intersection, with dimensions of the offset between that boundary and the ultimate road alignment/intersection, with adequate dimension provided to allow for a practical subdivision of that land.
(g)Wheelers Park Drive with a 31 metre wide road reservation between the Glasscocks Road intersection and Alisman Boulevard roundabout.
(h)A notation that turning areas provided at no-through roads will be designed to meet the GAA Engineering Construction and Design Manual for Subdivisions.

(i) The shared paths on the:
(i)eastern side of Wheelers Park Drive, with a crossing at the southern site boundary to the west;
(ii)southern side of the gas pipeline easement where within road reservation if possible; and
(iii)Glasscocks Road and Berwick-Cranbourne Road frontages, with those noted as having a 3 metre width.

(j) The encumbered reserves (part thereof) clearly distinguished.
(k)The location of the on-road bicycle network having regard to Plan 16 and relevant road cross-sections within the [PSP].
…

Condition 6 required the preparation of a public infrastructure plan to the satisfaction of the Council. It provided:

…
The Public Infrastructure Plan must address the following:
(a)What land may be affected or required for the provision of infrastructure works and the timing of when such land will be provided:
(b)The provision, staging and timing of stormwater drainage works;
(c)The provision, staging and timing of road works internal and external to the land consistent; with any relevant traffic report or assessment;
(d)The provision of public open space and tree reserves, including:
(i)a notation that 2 hectares of land will be provided towards the Public Open Space Contribution required under Clause 52.01 of the [planning scheme];
(ii)a distinction between the encumbered and unencumbered land within the active open space reserve, with a notation that any funding for the land under the [DCP] will only be for the unencumbered land.

(e)Any distinction between the timing of the creation of any reserve or lot and its embellishment/servicing as necessitated to achieve allowed Growth Areas Infrastructure Contribution exemptions. Such must include a notation identifying the prohibition of the sale of lots or vesting of reserves created prior to their embellishment/servicing until such time as they are embellished/serviced with respect to the applicable conditions of the Permit and a Statement of Compliance has been issued for the relevant stage in which they will be embellished/serviced.

(f) The landscaping of any land; and
(g)What (if any) infrastructure set out in the Development Contributions Plan applying to the land is sought to be provided as ‘works in lieu’ subject to the consent of [the Council].

The plan may be amended with the consent of the Responsible Authority.

Conditions 27 and 28 were concerned with the payment of a levy to the collecting agency (the Council) under the DCP:

27.A [levy], in accordance with the provisions of the [DCP], must be paid by the applicant to the Collecting Agency after certification of the relevant plan of subdivision but not more than 21 days prior the issue of a Statement of Compliance in respect of that plan under the Subdivision Act 1988.
28.Where the subdivision is to be developed in stages the infrastructure levy for the stage to be developed only may be paid to the Collecting Agency within 21 days prior to the issue of a Statement of Compliance in respect of that stage, provided that a Schedule of Development Contributions is submitted with each stage of the plan of subdivision. This Schedule must show the amount of development contributions payable for each stage and value of the contributions in respect of prior stages to the satisfaction of the Collecting Agency.

These conditions were required to be imposed by s 46N(1)(c) and (d) of the PE Act. Konann did not seek to review the imposition of these conditions before the Tribunal.

Condition 31 specified that the owner of the estate must enter into an agreement or agreements under s 173 providing for:

(a)The implementation of the Public Infrastructure Plan approved under this permit.
(b)The transfer of any land required for road widening or public open space.

…
(e)The timing of any credits or payments to be made to a person in respect of any infrastructure project having regard to the availability of funds in the [DCP].

Condition 46 required, among other things, the submission and approval of plans for the intersection by VicRoads. It also required the construction of the intersection works to the satisfaction of VicRoads and the Council before a statement of compliance could be issued for Stage 6 or later stages. While VicRoads was not a referral authority under the planning scheme, the PSP provided that VicRoads had potential responsibility for Glasscocks Road. The Council effectively treated VicRoads as if it were a referral authority. The application for a permit was referred to VicRoads and VicRoads requested the imposition of conditions.

Condition 46 contained VicRoads’ conditions, and provided:

(a)Unless otherwise agreed in writing by VicRoads, before the [drawing stated] certification of the Stage 1 of the plan of subdivision by the Responsible Authority, the following must be submitted to the satisfaction of the Roads Corporation (VicRoads):
(i)Functional layout of the Interim and ultimate Berwick-Cranbourne Road/Local Access Road intersection, generally in accordance with Functional Layout Ultimate and functional stage Road Safety Audit. The interim functional layout drawing must be amended to include the following which are not included in [the drawing stated]:
·A 3.0 metre wide shared use path shown n or close to the ultimate site boundary
·A left turn island and slip lane treatment for northbound traffic approaching the intersection, similar to what is shown on [the drawing] (Ultimate treatment).

(ii)A plan of subdivision showing the land set aside as ‘Road’ and vested to the Roads Corporation, generally in accordance with the approved functional layout of the ultimate Berwick/Cranbourne Road/Local Access Road intersection.

(b)Unless otherwise agreed in writing by VicRoads, before the certification of the Stage 6 …or the subsequent stages of the plan of subdivision by the Responsible Authority, the following must be submitted to the satisfaction of VicRoads:
(i)A functional layout of the ultimate and interim Glasscocks Road/Connector Boulevard signalised intersection, generally in accordance with [drawings stated] and a functional stage Road Safety Audit.
(ii)A plan of subdivision showing land set aside as ‘Road’ and vested to the Responsible Authority, generally in accordance with the approved functional layout of the ultimate Glasscocks Road/Connector Boulevard intersection.

(c)Prior to the certification of stages 10, 11, 14 and 15 of the development, as shown on [drawing stated], a plan of subdivision showing land set aside as ‘Road’ and vested in the name of the City of Casey for the ultimate widening of Glasscocks Road to a 34 metre wide road must be submitted to VicRoads and the Responsible Authority.
(d)Prior to the statement of compliance being issued for stage 1 of the redevelopment, the Berwick-Cranbourne Road/Local Access Street intersection must be constructed to the satisfaction of VicRoads, generally in accordance with the approved functional layout drawing and at no cost to VicRoads, or as otherwise agreed to in writing by VicRoads.
(e)Unless otherwise agreed to in writing by VicRoads, prior to the statement of compliance being issued for stage 6 or the subsequent stages 6–19, as shown on [drawing stated], the Glasscocks Road/Collector Boulevard interim signalised intersection must be constructed, generally in accordance with the approved functional layout drawing and to the satisfaction of VicRoads and the Responsible Authority.
(f)Before the commencement of any works required by VicRoads under this permit a detailed engineering design, traffic signal design and public lighting plan must be prepared generally in accordance with the accepted functional layout drawings and to the satisfaction of VicRoads.
(g)All works required by VicRoads under this permit must be completed to the satisfaction of VicRoads.
(h)The preparation of the detailed engineering design and the construction and completion of all works must be undertaken in a manner consistent with current VicRoads policy, procedures and standards and at no cost to VicRoads. In order to meet VicRoads’ requirements for these tasks the applicant will be required to comply with the requirements documented as ‘Standard Requirements – Developer Funded Projects’ and any other requirements as considered necessary depending on the nature of the work.
(i)No work must be commenced in, on under or over the road reserve without having first obtained all necessary approval under the Road Management Act 2004, and Road Safety Act 1986, and any other relevant acts or regulations created under those Acts.

Proposed s 173 agreement

On 12 February 2015, the Council provided a first draft of a s 173 agreement to Konann. It provided for Konann to meet the cost of the infrastructure projects listed in a schedule, including the cost of the intersection works. The schedule provided for the amount specified, and indexed in the DCP, or the actual cost of construction (whichever is the less) to be credited to Konann. Funding was limited to the intersection as configured in DCP project RD-18.

In early March 2015, Konann provided an amended draft s 173 agreement showing a different amount to be credited under the DCP. It proposed that the amount representing the lowest of three tender prices for carrying out the project be credited. In correspondence in March and April 2015 from a Council officer, it was suggested that it may not be in Konann’s best interests to delay entering into a s 173 agreement, and that if Konann was to enter into an agreement it would be secured with respect to works in kind. Without an agreement, levies paid by Konann would go into a fund to be expended in accordance with the Council’s adopted priority list. Funds provided by Konann might be allocated to other projects in the area covered by the DCP.

In a letter dated 11 May 2015, the Council’s solicitors repeated that the Council was prepared to provide DCP credits for the intersection, up to the extent of the allowance for the project in the DCP, subject to the DCP amount being split between the signals and the intersection works.

By August 2015, it was apparent that the cost of the intersection would considerably exceed the estimated intersection cost as found in the DCP. By then the estimated cost for the intersection works was around $4 million as against the total estimated DCP project cost of $2,119,500. Konann’s engineers raised the issue with the Council. No funds were available to cover the difference in cost.

Subsequent approvals

On 6 November 2015, the Council approved the PIP. A table in the PIP stated that the DCP project RD-18 would be constructed by the developer as a signalised intersection as part of Stage 11. As to the provision of land and works in kind, the table simply stated ‘To be determined’. Effectively, the PIP preserved the position of the parties in the dispute as to the cost of intersection works. In December 2015 a revised design for the intersection was agreed on.

In January 2016, Konann requested that the Council agree to a change to the staging layout and sequence so that stages 15, 16 and 17 could be developed before stage 11. Sales of allotments had increased from about 15 lots per month to more than 40 per month. Konann was running out of lots to sell. The Council did not consent to the change in staging. Konann applied under s 149 of the PE Act to the Victorian Civil and Administrative Tribunal (‘the Tribunal’) to review the Council’s decision (‘the Tribunal proceeding’).

On 1 March 2016 the Council approved the functional layout plan for the intersection.

Konann and the Council were able to resolve the Tribunal proceeding, and signed terms of settlement on 29 April 2016. Both parties reserved their positions as to who should pay for the intersection works. For its part, the Council did not agree to the provision of any recognition, credit or payment greater than the amount specified in the DCP for the delivery of the intersection as adjusted, and reduced to make allowance for the delivery of the northern leg of the intersection by a third party. For its part, Konann reserved the right to issue proceedings in respect of its claim for a credit for the cost of constructing the intersection.

On 8 June 2016, Konann and the Council entered into an agreement under s 21 of the Subdivision Act 1968 (Vic) (‘the Subdivision Act’). Again, Konann and the Council reserved their respective positions concerning the cost of the intersection works.

The dispute between Konann and the Council

Between June 2016 and June 2017 Konann constructed the intersection (excluding the northern approach). On 20 June 2017, the Council issued a statement of compliance in respect of Stage 11 of the subdivision, including for the construction of the southern part of the intersection. The security deposit of $2.8 million provided for Stage 11 works was refunded.

On 9 August 2017, after the intersection works had been completed, Konann’s solicitor wrote to the Council’s CEO and solicitor seeking recognition by the Council of their value in terms of their cost of $3.66 million. The Council did not agree to Konann’s request.

Statutory framework
Part 3B of the PE Act

Part 3B of the PE Act is concerned with development contributions plans and with the collection of levies.

The provisions of pt 3B describe the purposes and contents of development contributions plans:

46I Development contributions plan
(1)Without limiting section 6, a planning scheme may include one or more development contributions plans for the purposes of levying contributions to fund—
(a)the provision of works, services and facilities in relation to the development of land in the area to which the plan applies; and
(b)the reasonable costs and expenses incurred … in preparing the plan and any strategic plan or precinct

46J What can a plan provide for?
A development contributions plan may provide for either or both of the following—
(a)the imposition of a development infrastructure levy;
(b)…

in relation to the development of land in the area to which the plan applies.
46K Contents of plan
(1) A development contributions plan must—
(a) specify the area to which it applies; and
(b)set out the plan preparation costs, works, services and facilities to be funded through the plan, including the staging of the provision of the works, services or facilities; and
(c)relate the need for the plan preparation costs, works, services and facilities to the proposed development of land in the area; and
(d)specify in respect of each of the plan preparation costs, works, services and facilities—
(i)the amount of the plan preparation costs and the estimated cost of the works, services or facilities; or
(ii)the standard levy applicable to the plan preparation costs, works, services or facilities; and

(e)unless a standard levy is applied, specify the proportion of the total estimated cost of the plan preparation costs, works, services and facilities which is to be funded by a development infrastructure levy…; and
(f)specify the land in the area and the types of development in respect of which a levy is payable and the method for determining the amount of levy payable in respect of any development of land; and
(fa)specify the Minister, public authority or municipal council to whom or to which the …development infrastructure levy is payable under this Part (the collecting agency ); and
(fb)specify any Minister, public authority or municipal council that is to be responsible for the provision of the works, services or facilities or for the plan preparation costs for which the … or development infrastructure levy or part of that levy is payable under this Part (the development agency ); and
(g)provide for the procedures for the collection of a development infrastructure levy in respect of any development for which a permit under this Act is not required.

Part 3B of the PE Act also deals with the collection of levies, and the resulting responsibilities and accountabilities of municipal councils:

46NCollection of development infrastructure levy
(1)Without limiting section 62, if—
(a)an approved development contributions plan provides that a development infrastructure levy is payable in respect of the development of any land; and
(b)an application is made under this Act for a permit to carry out that development on that land—

the responsible authority must include a condition in the permit that the applicant—
(c)pay the amount of the levy to the relevant collecting agency within a specified time or within a time specified by the collecting agency; or
(d)enter into an agreement with the relevant collecting agency to pay the amount of the levy within a time specified in the agreement.

46PProvisions applying to collection of levies
(1)The relevant collecting agency may require the payment of an amount of levy … to be secured to its satisfaction.
(2)The relevant collecting agency may accept the provision of land, works, services or facilities by the applicant in part or full satisfaction of the amount of levy payable.
(3)Subsection (2) applies to land, works, services or facilities provided before or after the application for the permit was made or the development is carried out.
(4)Subsection (2) does not apply to land provided in accordance with any requirement of the Subdivision Act 1988 or any corresponding previous enactment.
46QResponsibilities of municipal councils
(1)A municipal council must, in accordance with the Local Government Act 1989, keep proper accounts of any amount of levy paid to it as a collecting agency or a development agency under this Part.
(1A)A municipal council to which an amount of levy is paid as a collecting agency under this Part must forward to a development agency any part of the levy that is imposed for plan preparation costs incurred by the development agency or for the carrying out of works, services or facilities by or on behalf of that development agency.
(2)Subject to this section, a municipal council to which an amount of levy is paid as a development agency under this Part must apply that amount only—
(a)for a purpose relating to plan preparation costs or the provision of works, services and facilities in respect of which the levy was imposed; and
(b)in accordance with the approved development contributions plan.

(3)A municipal council may refund any amount of levy paid to it as a development agency under this Part in respect of a development if it is satisfied that the development is not to proceed.
(4)If—
(a)an amount of levy has been paid to a municipal council as a development agency under this Part for plan preparation costs incurred by the council or for the provision by the council of works, services or facilities in an area; and
(b)that amount has not been expended within the period required by the approved development contributions plan—

the municipal council must within 6 months after the end of that period—
(c)with the consent of the Minister and in the manner approved by the Minister, pay that amount to the current owners of land in the area; or
(d)in accordance with Part 3, submit to the Minister an amendment to the approved development contributions plan to provide for the expenditure of that amount; or
(e)with the consent of the Minister and in the manner approved by the Minister, expend that amount for the provision of other works, facilities or services in that area.

The dispute in this proceeding concerns the power of a collecting agency to accept works in kind in s 46P(2)

Permit conditions under the PE Act

Section 62(1), (5) and (6) of the PE Act authorises the imposition of conditions in a permit relating to land for which a DCP is approved. A permit must include the conditions required by s 46N.

Section 62 provides:

(1) In deciding to grant a permit, the responsible authority must—
(a)include any condition which the planning scheme or a relevant determining referral authority requires to be included; and
…

To manage the transition of non-urban land into urban land in accordance with a precinct structure plan.
To provide for a range of uses and the development of land generally in accordance with a precinct structure plan.
To contain urban use and development to areas identified for urban development in a precinct structure plan.
To provide for the continued non-urban use of the land until urban development in accordance with a precinct structure plan occurs.
To ensure that, before a precinct structure plan is applied, the use and development of land does not prejudice the future urban use and development of the land.
…

(5)       In deciding to grant a permit, the responsible authority may—
(a)include a condition to implement an approved development contributions plan …; or
(b)include a condition requiring specified works, services or facilities to be provided or paid for in accordance with an agreement under section 173; or
(c)include a condition that specified works, services or facilities that the responsible authority considers necessary to be provided on or to the land or other land as a result of the grant of the permit be—
(i)        provided by the applicant; or
(ii)       paid for wholly by the applicant; or
(iii)provided or paid for partly by the applicant where the remaining cost is to be met by any Minister, public authority or municipal council providing the works, services or facilities.

(6)The responsible authority must not include in a permit a condition requiring a person to pay an amount for or provide works, services or facilities except—
(a)in accordance with subsection (5), section 46N(1) …; or
(b)a condition that a planning scheme requires to be included as referred to in subsection (1)(a); or
(c)a condition that a determining referral authority requires to be included as referred to in subsection (1)(a).

Extrinsic material

In the second reading speech for the Planning and Environment (Development Contributions) Bill 1995 (Vic), the Minister of Planning said:

The broad purpose of the bill is to establish a new system for development contributions under the Planning and Environment Act 1987. Development contributions are collected to meet the costs of local infrastructure and are administered by local councils. These levies are separate from those provided for in specific legislation such as those obtained by Melbourne Water in its various guises under the board of works act.
Early in the life of this government a review of development contributions was initiated, as it was evident that both developers and councils were experiencing problems with their application. The Department of Planning and Development had earlier prepared interim guidelines but these did not provide sufficiently detailed advice to ensure consistency and certainty, given the somewhat general nature of the relevant provision of the Planning and Environment Act – section 62(2)(h). Further, development contributions were becoming an increasingly common source of funds for a widening range of infrastructure as local government, in particular, attempted to limit its reliance on borrowings.
The major concerns expressed about the current system of levies have been:
lack of consistency in application between councils and between residential and commercial development;
rapidly increasing range of infrastructure being funded by levies and the increasing size of the developer’s contribution;
lack of certainty for developers to predict their costs and for councils to budget for infrastructure;
instances of inadequate justification for the items of infrastructure included in the levy, their amount and the timing of payment; and
lack of clear accountability for expenditure of the contributions.[2]

[2]Victoria, Parliamentary Debates, Legislative Assembly, 4 May 1995, 1240–1241 (Robert Maclellan, Minister for Planning).

The Minister then described the characteristics of the preferred development contributions system:

While no single approach was seen to meet all demands, the preferred approach has the following characteristics.
It splits development contributions into two components; the first being for predominantly physical infrastructure required as development commences and the second for community infrastructure required as homes are built and the community develops. Community infrastructure includes facilities such as health centres, preschool and day care centres, community halls, libraries and recreational or sporting facilities.
The timing of collection of the two components reflects the timing at which the infrastructure is required. The first – ‘development infrastructure’ – component is a contribution, or security guarantee, collected from the developer, as a condition of a planning permit where a permit is required. The second – ‘community infrastructure’ – component is a contribution, or security guarantee, collected from the owner or builder prior to the issuing of a building permit.
The development infrastructure component will contribute to the costs of those items of infrastructure required to enable the development to proceed and will reflect the geographically differentiated costs of providing physical services, such as roads and drainage.
The community infrastructure component is restricted by an upper monetary limit - $450 per residential lot or 0.25 per cent of building construction cost of non-residential development – based on a benchmark value for essential social infrastructure. Given that construction of community facilities normally involves similar costs regardless of their location, a suitable upper limit can be established. The decision about which community facilities would be funded from this component, and to what value within the limit, would be made by individual councils. The upper monetary limit in the bill can be varied by the Governor in Council to reflect cost changes and movements in the CPI.
The council will have discretion to implement either or both of the levy components, or neither of them, in which case the council would rely on other sources of funds, such as rates or borrowings.
Councils will be required to prepare a development contributions plan before being able to exact a levy under the Planning and Environment Act. The development contributions plan will be a schedule in the planning scheme which sets out the nature, cost and staging of the provision of infrastructure. The level of detail in this plan will vary between established and newly developing areas and will usually be linked to a geographic plan such as a local structure plan or municipal plan. The development contributions plan must be able to justify both the infrastructure items to be included and the level of the contribution.
Approval and amendment of the development contributions plan is to be by means of a planning scheme amendment, to encourage stability and to utilise well-established procedures, including public exhibition and scrutiny by the minister.
Key features of the proposed approach are:
a single, consistent system across all municipalities, whether established or fringe metropolitan, provincial city or rural which applies to both residential and non-residential development;
councils will be encouraged to properly plan for infrastructure and services required for new development;
a limit to the extent to which development contributions can be used to fund infrastructure;
appropriate timing of contributions to match infrastructure demand, thereby supporting efficiency and affordability; and limiting the need for developers to borrow the money at the highest rate of interest merely to find that the council holds the money in a council account for some years before it is spent;
clear rules on what infrastructure can be included in the levy;
an equitable system which involves documented justification for the required infrastructure, its timing and costs; and a highly visible process to provide strong community accountability.

The provisions limit levies being obtained outside the development contributions framework to those of a minor nature directly related to the site in question, such as the crossovers outside a service station.[3]

[3]Ibid 1241–1242.

In the second reading speech for the Planning and Environment (Development Contributions) Bill 2004 (Vic), the Minister for Planning described the purpose of the bill as being to improve the effectiveness and workability of the existing development contributions system.[4] She said that a development contribution under the PE Act was a one-off payment or in-kind provision of works, services or facilities to be provided by a developer towards the provision of infrastructure required to meet the needs of a community resulting from the development. After describing the results from the development contributions systems established in 1995 as disappointing, she said:

I now draw attention to the key features fundamental to the effective operation of the Victorian development contributions system, which underpin the initiatives in this bill.
The revamped system will ensure all development contribution plans satisfy the tests of need, nexus, equity and accountability.
‘Need’ is the test by which the need for the proposed infrastructure must be demonstrated;
‘Nexus’ is the test of the connection between the new development and the infrastructure need generated;
‘Equity’ is the test of the fair and reasonable apportionment of the cost of providing the infrastructure; and
‘Accountability’ is the test of ensuring that funds collected must be spent on the infrastructure for which they were levied, and be accounted for in an open and transparent manner.
Development contribution plans are subject to the publicly contestable planning scheme amendment process. This ensures public exhibition of the plan, consideration of submissions by an independent planning panel, and the need for final approval by the Minister for Planning.[5]
[4]Victoria, Parliamentary Debates, Legislative Assembly, 4 November 2004, 1320 (Mary Delahunty, Minister for Planning).
[5]Ibid 1321.

Road management and construction

The Council is the coordinating road authority and the responsible road authority for Glasscocks Road and Wheelers Park Drive.[6] These roads are public roads, and are listed in the Council’s register of public roads.
[6]Road Management Act 2004 (Vic) ss 36, 37.

As a road authority, the Council has far-reaching functions and responsibilities. It must provide and maintain a network of roads for community use in its area.[7] It has power to do all things necessary or convenient to be done in connection with the performance of its functions.[8] It has power to determine the standard to which roadways, road infrastructure and road-related infrastructure (such as traffic signals) are constructed, inspected and maintained. There are comprehensive provisions as to the purposes, standards, contents and procedures relating to road management plans.[9]
[7]Ibid s 34(1)(a).
[8]Ibid s 35(1).
[9]Ibid ss 49–55.

In addition to these duties and powers, the Council has extensive powers relating to roads under the Local Government Act 1989 (Vic) (‘LG Act’). It has the care and management of all public highways vested in the Council, and wide powers over roads and traffic.[10]
[10]Local Government Act ss 204–207, sch 10.

The Council has a road management plan for the management of the road network.[11] It is regularly revised and updated. It provided that,[12] when preparing designs and documentation for residential street pavements, developers and engineers must use the procedures, materials and pavement composition specified in the Engineering Design and Construction Manual for Subdivision in Growth Areas published by the Growth Areas Authority (‘the manual’).[13]
[11]City of Casey, Road Management Plan (15 December 2015).
[12]Ibid 10.
[13]Growth Areas Authority, Engineering Design and Construction Manual for Subdivision in Growth Areas (April 2011).

The manual is intended to streamline the planning process for creating new communities; to increase certainty, reduce costs and reduce regulatory burden to all stakeholders in the land development process.[14] One of its objectives is to ensure that minimum design criteria are met in regard to the design and construction of infrastructure.[15] The manual applies to design and construction under precinct structure plans and planning permit applications.[16]
[14]Ibid 6.
[15]Ibid 10.
[16]Ibid 23.

The manual describes precinct structure plans as setting the future structure for growth areas, and as showing how the planning objectives will be achieved within the precinct.[17] The manual provides for a functional layout plan required by permit conditions to be prepared as part of the planning process. All engineering elements are to be shown on the functional layout plan consistently with the PSP.[18] Detailed engineering design plans are to be prepared in accordance with the PSP, conditions in the permit, requirements of the manual and approved functional layout plans.[19] Detailed and prescriptive requirements are imposed by the manual in relation to road design, sight distances, horizontal and vertical alignment, cross-section and cross fall, pavements and design traffic with a 20 year minimum design period and construction framework.[20]
[17]Ibid.
[18]Ibid 46–48.
[19]Ibid 51.
[20]Ibid 67–130.

Relevant planning scheme provisions

Clause 37.07 of the planning scheme contains provisions relating to the Urban Growth Zone. It provides:

37.07 Purpose
To implement the State Planning Policy Framework and the Local Planning Policy Framework, including the Municipal Strategic Statement and local planning policies.
To manage the transition of non-urban land into urban land in accordance with a precinct structure plan.
To provide for a range of uses and the development of land generally in accordance with a precinct structure plan.
To contain urban use and development to areas identified for urban development in a precinct structure plan.
To provide for the continued non-urban use of the land until urban development in accordance with a precinct structure plan occurs.
To ensure that, before a precinct structure plan is applied, the use and development of land does not prejudice the future urban use and development of the land.
…

Clause 37.07-9 ensures the consistency of any permit granted with the precinct structure plan applying to the land. It provides:

37.07-9 Use of land
Any requirement in the Table of uses and any requirement specified in the schedule to this zone must be met.
A permit granted must be generally in accordance with the precinct structure plan applying to the land.

Clause 37.07-10 controls subdivision of land, and again ensures consistency between the PSP and any permit granted for the subdivision of that land. Conditions and requirements specified in the PSP must be included in the permit.

37.07-10 Subdivision of land
A permit is required to subdivide land. Any requirement in the schedule to this zone or the precinct structure plan must be met.
A permit granted must:
•Be generally in accordance with the precinct structure plan applying to the land.
•Include any conditions or requirements specified in the schedule to this zone or the precinct structure plan.

The use and development provisions of sch 5 to the Urban Growth Zone apply to land within the PSP. Clause 3.0 requires that a PIP accompany any application for subdivision. The PIP must address:

•what land may be affected or required for the provision of infrastructure works
•the provision, staging and timing of stormwater drainage works
•the provision staging and timing of roadworks internal and external to the land consistent with any relevant traffic report or assessment
•the landscaping of any land
•what if any infrastructure set out in the Development Contributions Plan applying to the land is sought to be provided as ‘works in lieu’ subject to the consent of [the Council]
•the provision of public open space and land for any community facilities
•Any other matter relevant to the provision of public infrastructure required by the responsible authority.
•Where the developer does not facilitate the construction of the connector street bridge and associated works, the owner of the land must enter into a Section 173 Agreement to provide for the construction of the bridge and associated works, to the satisfaction of the Responsible Authority.

Clause 4 of sch 5 includes general requirements which must be met as part of the permit, plans endorsed under the permit, or by way of a s 173 agreement:

General requirements
A planning permit must include a condition or conditions which ensure that any requirements or conditions set out in the Cranbourne North Stage 2 Precinct Structure Plan and the Cranbourne North Stage 2 Native Vegetation Precinct Plan are implemented as part of the planning permit or the plans endorsed under the planning permit.
Prior to the issue of a Statement of Compliance for the first stage of a development, the owner must, if required, enter into an agreement, or agreements, under Section 173 of the Act which specifies the infrastructure required to be provided as part of the development. The agreement must give affect [sic] to the approved Public Infrastructure Plan.

Clause 45.06 of the planning scheme incorporates a development contributions plan overlay. Clause 46.06-1 ensures consistency between any permit granted and the provisions of any applicable DCP.

A permit granted must:
•Be consistent with the provisions of the relevant development contributions plan.
•Include any conditions required to give effect to any contributions or levies imposed, conditions or requirements set out in the relevant schedule to this overlay.

Clause 45.06-2 deals with the preparation of a development contributions plan, which must:

•Specify the area to which the plan applies.
•Set out the works, services and facilities to be funded through the plan, including the staging of the provision of those works, services and facilities.
•Relate the need for the works, services or facilities to the proposed development of land in the area.
•Specify the estimated costs of each of the works, services and facilities.
•Specify the proportion of the total estimated costs of the works, services and facilities which is to be funded by a development infrastructure levy or community infrastructure levy or both.
•Specify the land in the area and the types of development in respect of which a levy is payable and the method for determining the levy payable in respect of any development of land.
•Provide for the procedures for the collection of a development infrastructure levy in respect to any development for which a permit is not required.

Schedule 11 to the Development Contribution Plan Overlay describes the area covered by the DCP, and provides a summary of costs.

The PSP

Clause 1.1 of the PSP describes the role of the PSP in terms which include:

The Cranbourne North Precinct Structure Plan Development Contributions Plan has been prepared concurrently with this document. It sets out the requirements for development proponents to make a contribution toward infrastructure required to support the development of the Cranbourne North precinct.
…
The PSP is a long-term plan to guide future urban development. It describes how the land is expected to be developed and how and where infrastructure and services are planned to support development.
The PSP:
•Is a strategic plan which guides the delivery of a quality urban environment in accordance with the Victorian Government Guidelines,
•Enables the transition of non-urban land to urban land,
•Sets the vision for how land should be developed and the objectives to be achieved,
•Outlines projects required to ensure that future residents, visitors and workers within the area can be provided with timely access to services and transport necessary to support a quality, affordable lifestyle,
•Details the form and conditions that must be met by future land use and development,
•Provides the basis for the use and development controls that apply in the schedule to the Urban Growth Zone and planning permits which may be granted under the Schedule to the Zone, and
•Provides developers, investors and local communities with certainty about future development.

Clause 1.3 states that the PSP is to be implemented by:

•Development proponents who develop land generally in accordance with this PSP,
•The Victorian Government and [the Council] by funding, delivering and managing a range of infrastructure and services to support the development of the precinct, and
•Non-government service providers and individuals, such as volunteers who manage and deliver services.

Roads and streets

Clause 4.8.3 of the PSP imposes detailed design and construction requirements for intersections with arterial roads. Some are expressed in mandatory terms calling for strict observance, while others call for substantial compliance:[21]
[21]See generally Scurr v Brisbane City Council (1973) 133 CLR 242, 256 (Stephen J).

CONSTRUCTION OF INTERSECTIONS WITH ARTERIAL ROADS
The following planning and design guidelines must be met:
•All intersections with existing or proposed arterial roads must be designed, constructed and controlled to the satisfaction of the Roads Corporation and the municipal council, with the main design objective being to allow for a minimum 10-year design life having regard to the anticipated traffic growth on the affected roads from both the ultimate development of the Precinct Structure Plan area and the external traffic.
•Staging of subdivisions is to provide for the timely connection of road links between properties and the arterial road network and bus, cycle and walking routes to the satisfaction of the responsible authority.
•Land must be provided for right of way flaring at all arterial road connections to existing and proposed arterial roads for the ultimate design of the intersection in accordance with VicRoads standards.

The following planning and design guidelines should be met:
•Prior to the preparation of planning permit applications which require access to an arterial road as shown on Plan 5 and 14, permit applicants should consult with VicRoads to determine the appropriate extent of Right of Way flaring required for the intersection.[22]

[22]Emphasis added.

There are also general requirements for arterial road connections, including for intersection design:

The following planning and design guidelines should be met:
•Residential lots fronting the arterial road network should be accessed via internal loop roads rather than by service road,
•Access to streets connecting to an arterial road should be considered within the context of the requirements of traffic management, safety, urban design and its urban environment,
•Intersection design should provide for the safety and efficient operation of the arterial road and the side road to the satisfaction of VicRoads, with consideration to vehicle speeds, vehicle queues and conflicting movements on approach to and departure from the intersection,
•Access points (temporary and permanent) to the existing or proposed arterial road network beyond those shown on Plan 14, will be considered on a case by case basis in accordance with VicRoads access management policies.

In addition, cl 4.8.3 of the PSP imposes road and street cross-section standards that must be met to the satisfaction of the responsible authority.

There are also planning and design guidelines that should be met to the satisfaction of the responsible authority:

•Road and street cross sections should be generally consistent with the cross sections included in this Element,
•Where possible common trenching should be used to accommodate underground utilities and services, and
•Where additional land is required for utilities and services in connector streets, additional trenching may be provided within the 2.3m parking lane.

Potential bus routes were shown in the PSP plans for Glasscocks Road and Wheelers Park Drive. Clause 4.8.3 provides where a requirement for a bus route or bus stop has been nominated by the Director of Public Transport, bus stops must:

•Be constructed by development proponents as part of the subdivision works (prior to the issue of a statement of compliance for the relevant stage) in accordance with the requirements of the Public Transport Guidelines for Land Use and Development to the satisfaction of the Director of Public Transport,
•Be provided with DDA compliant direct and safe pedestrian access connected to an existing pedestrian/shared path, and
•Be designed as an integral part of activity centres, and activity generating land uses, such as schools, sports fields and employment areas.

While cl 4.8.3 of the PSP is headed ‘Planning and Design Guidelines’, a number of the provisions that I have set out above are clearly expressed as requirements which ‘must be met’. Where the PSP says ‘must be met’, it imposes a requirement for the purposes of cl 37.07-10 of the planning scheme. This was common ground, and is so even if the requirement is described in the PSP as a guideline provided that the PSP also says that ‘it must be met’.

There are also requirements as to expenditure imposed by the PSP on developers. Clause 5.1.1 of the PSP provides that development must meet the cost of delivering the following infrastructure:

•Connector streets and local streets, including culverts,
•Local bus stop infrastructure,
•Landscaping of all existing and future roads and local streets,
•Intersection works and traffic management measures along arterial roads, connector streets and local streets,
•Note: Subject to the approval of the collecting agency, part or all of the cost of works on intersections included in a Development Contributions Plan may be able to be provided as in-kind works in lieu of cash payment.
•Council approved fencing and landscaping (where required) along arterial roads,
•Local pedestrian and bicycle paths along local arterial roads, connector roads and local streets and within local parks, except those in the DCP,
•Basic improvements to local parks/open space including levelling, grassing, tree planting and local paths consistent with the Council’s required construction standards,
•Local drainage systems, and
•Infrastructure as required by utility services providers including water, sewerage, drainage (except where the item is funded through a Drainage Scheme), electricity, gas and telecommunications.[23]

[23]Emphasis added.

There was no dispute before me that provisions such as these imposed obligations on developers which they had to meet.

The DCP

The DCP and the PSP were prepared concurrently. The DCP:

Outlines projects required to ensure that future residents, visitors and workers in the area can be provided with timely access to infrastructure and services necessary to support a quality, affordable lifestyle.
Establishes a framework for development proponents to make a financial contribution towards the cost of the identified infrastructure projects. It ensures the cost of providing new infrastructure and services is shared equitably between various development proponents and the wider community.
Provides the details of the calculation of financial contributions that must be made by future developments towards the nominated projects. In this way, it provides developers, investors and local communities with certainty about development contribution requirements and how they will be administered.

The DCP described Project RD18 in these terms:

Construction of intersection of Glasscocks Road and White Connector Street. Construction of interim intersection including provision of traffic signals in accordance with agreed intersection scope prepared by GTA Consultants and CEDC.

It described how costs had been calculated allowing a 20% contingency. Project scope changes were identified as most likely to affect costings:

The largest possibility of cost change is from any proposed change of scope detailed, not from individual component rates or current on ground conditions. The potential for change of scope has been minimised through detailed road network modelling and agreement from the road authority regarding the road cross-sections. In relation to intersection projects, detailed intersection analysis was undertaken to determine the functional layout of an intersection with a 10-year design life. The relevant intersection layout is shown in the cost sheets. The intersection was agreed with the relevant road authority – which usually meant the GAA reaching consensus with both VicRoads and [the Council] regarding the scope of works.

Clause 3.1.2 of the DCP contemplated that in certain circumstances works in kind might be provided by developers in lieu of levy:

Works may be constructed in-lieu of a cash contribution on some projects. This is only possible where the arrangement has been approved in writing by the Collecting Agency.
As outlined in Section 3.1.1, payment of development contributions is to be made in cash.
Alternatively, infrastructure works and land may be provided by developers with a credit provided against their development contribution, subject to the written agreement of the Collecting Agency. In determining whether to agree to the provision of works in lieu of cash the Collecting Agency will have regard to the following:
•Only works of land identified in the DCP can be provided in lieu of cash,
•Works must be provided to a standard that generally accords with the DCP unless agreed between the Collecting Agency and the developer,
•Detailed designs must be approved by the Collecting Agency and generally accord with the standards outlined in the DCP unless agreed by the Collecting Agency and the developer,
•The construction of works must be completed to the satisfaction of the Collecting Agency, and
•There is no additional impact on the DCP.

The DCP also recognised that developers might overprovide infrastructure items, and seek credits or cash. Clause 3.1.3 provided:

Where the Collection Agency agrees that a development proponent can physically provide an infrastructure item (either works and/or land), the situation may arise where the developer makes a contribution with a value that exceeds that required by the DCP for the individual project.
In such a case the developer may be entitled to credits against other projects in the DCP to the extent that they ‘over contributed’. Alternatively, a developer may seek an agreement with the Collection Agency to provide for a cash reimbursement where a significant over contribution has been made on a particular project.
The details of credits and reimbursements will need to be negotiated with, and agreed to by the Collecting Agency.

Development contributions guidelines

The Development Contributions Guidelines (‘the guidelines’) were published by the former Department of Infrastructure.[24] They state that a DCP will rarely cover the full cost of infrastructure. This is because the levy is calculated on the basis that all users pay for the cost of the infrastructure, but only new development can actually be charged the levy. As a DCP imposes a binding obligation on the infrastructure provider to provide the infrastructure by the date or according to the criteria,[25] there may be a shortfall in funding to be provided by the infrastructure provider.
[24]Development Contributions Guidelines (Department of Infrastructure) (16 June 2003; amended March 2007).
[25]Ibid 13.

As only new development can be charged a levy, the guidelines state that DCPs will be most effective when applied in areas experiencing a high degree of change. DCPs established for greenfields sites on the urban fringe and large redevelopment sites within established urban areas experiencing high levels of growth are likely to recover the greatest proportion of the cost of infrastructure provision.[26]
[26]Ibid 14.

The guidelines provide that fair cost apportionment requires that what is not collected from existing development and exempted uses cannot be collected from other users required to pay the levy. Any funding shortfall must be made up from alternative funding sources, such as general rates and government grants.[27]
[27]Ibid 15.

Previous decisions

Considerable assistance as to the interpretation and application of pt 3B of the PE Act is to be obtained from the Tribunal decision of Dennis Family Corporation v Casey City Council,[28] and the decisions of Osborn J in Casey City Council v Dennis Family Corporation,[29] which was an appeal from Hunt Club Estate, and Casey City Council v Carson Simpson Pty Ltd.[30] These decisions relate to the form of DCP approved in 1997.
[28][2006] VCAT 2372 (‘Hunt Club Estate’).
[29][2007] VSC 238 (‘Dennis Family Corporation’).
[30](2007) 18 VR 19 (‘Carson Simpson’).

Carson Simpson

Osborn J commenced his judgment in Carson Simpson by adopting the history of pt 3B and development contributions as comprehensively set out in Hunt Club Estate.[31] His Honour observed that development contributions imposed by informal DCPs not incorporated into the planning scheme were invalid.[32]
[31]Carson Simpson (2007) 18 VR 19, 23–24 [21] (Osborn J), quoting Hunt Club Estate [2006] VSC 2372, [36]–[40] (Deputy President Gibson and Senior Member Sharkey).
[32]Carson Simpson (2007) 18 VR 19, 24 [22] (Osborn J), citing Curry v Melton City Council (2000) 111 LGERA 30.

Osborn J reviewed the relevant provisions of the planning scheme, and the PE Act, and said:

In my view the scheme of the Act…
(a)required the imposition of a condition implementing the requirement for a levy by reason of s.46N(1); but
(b)reserved to the Council as collecting authority thereafter, the discretion to accept works in lieu of payment of the levies (s.46P).[33]

[33]Carson Simpson (2007) 18 VR 19, 35 [70] (Osborn J).

He then said:

Discretion with respect to the mode of collection of levies is provided for in s.46P and is granted not to the responsible authority exercising the permit power, but to the “collecting agency” collecting the levy. In this specific sense I accept the Council’s submission that the question of whether works should be accepted in lieu of a levy “crosses the line” into the area reserved for governmental decision making as distinct from the exercise of the permit condition discretion.
Nevertheless in the event that the Council does not accept works in part discharge of the levy pursuant to s.46P in the present case, it will on the face of it have had and received monies to the use of the permit applicant, which it cannot apply to the provision of certain of the works in respect of which the levy was imposed, because such works will have been constructed by the applicant. Such monies would be calculated by reference to the relevant portion of the levy but not the actual cost to the works. Further, it would thereafter retain the right to receive additional levies from other contributors in respect of works, which it had required the permit applicant to construct for it. In these circumstances it would in substance be involved in “double dipping” unless the permit applicant was adequately reimbursed.[34]

[34]Ibid 36 [74]–[75].

These paragraphs are important and describe the nature of the discretion in s 46P(2) of the PE Act. They make clear that the amount to be credited or deducted from the amount of the levy to be paid by the developer when works in kind are provided is calculated by reference to the portion of the levy which represents the works constructed by the developer. This is because there would be double dipping unless the developer were reimbursed. The following legal principles concerning the application of s 46P(2) are to be found in this passage:

(a)s 46P(2) of the PE Act gives discretion as to the mode of collection of levies to the collecting agency collecting the levy;[35]
(b)the question whether works should be accepted in lieu of a levy involves the collecting agency in governmental decision making;
(c)where works in respect of which the levy is imposed are constructed by the permit applicant, the collecting agency will have received moneys to the use of the permit applicant which it cannot apply to the provision of certain of the works in respect of which the levy was imposed;
(d)the collecting authority continues to have the right to receive additional levies from other contributors in respect of the works which it required the permit applicant to provide; and
(e)there would be ‘double dipping’ unless the permit applicant was adequately reimbursed.

[35]Here, as in Carson Simpson, the Council is both the collecting agency and the development agency.

In a later passage, Osborn J said:

In cases where the Council elects to require a subdivider to provide infrastructure works contemplated by a DCP, it will be just and equitable that the value of those works is the subject of a set off pursuant to s.46P (insofar as that is practicable).
I say “elects” because it is always open to a responsible authority to stipulate the provision of necessary infrastructure, as a precondition to subdivision, without requiring the subdivider to be the provider (or indeed nominating whether a Commonwealth, State, local government or private entity is to be the provider). Such a condition simply stipulates the existence of collateral infrastructure e.g. a bridge, as a circumstance necessary to the subdivision proceeding in accordance with orderly planning. It does not provide a mechanism for achieving the fact.
If the Council requires the subdivider to construct works the subject of a DCP, however, it elects to implement the DCP in this way. If it did not so elect, the DCP would require implementation pursuant to contractual arrangements for value, at a time potentially delayed beyond that at which the subdivider may wish to proceed, but consistent with Council’s program for the implementation of the DCP as a whole.[36]

[36]Carson Simpson (2007) 18 VR 19, 37 [84]–[86] (Osborn J).

During the trial before me, there was some discussion as to the meaning of the expression ‘value of the works’ used in the opening sentence of this passage. ‘Value’ is a protean word, and can assume many meanings.[37] Its meaning depends on the purpose and context in which the word is used. In the present case, there can be little doubt that when Osborn J used the expression ‘value of those works’, he was using it consistently with what he had said earlier in his judgment. Section 46P(2) itself speaks in terms of the applicant providing land, works, services or facilities ‘in part or full satisfaction of the amount of levy payable’.[38]
[37]Spencer v The Commonwealth (1907) 5 CLR 418, 431–432 (Griffiths CJ); Minister for the Army v Parbury Henty & Co Pty Ltd (1945) 70 CLR 459, 492 (Latham CJ); The White & Co Ltd v The City of Toronto [1955] OR 320, 326 (Laidlaw JA); Housing Commission of NSW v Falconer [1981] 1 NSWLR 547, 570 (Mahoney JA).
[38]Emphasis added.

Osborn J described the imposition of a requirement by council that the subdivider provide infrastructure contemplated by the DCP as ‘a significant election on its part as to the implementation of the DCP’. A council could not ‘in fairness so require and fail thereafter to give credit for the value of the works it has required’.

During the trial, the issue was raised as to whether his Honour was using the term ‘election’ in a general sense as synonymous with the word ‘decides’ or whether his Honour had in mind the principles relating to common law election. Those principles were set out by the Court of Appeal in Mercier Rose Street Pty Ltd v Burness.[39]
[39]Mercier Rouse Street Pty Ltd v Burness [2015] VSCA 8, [224]–[225] (Santamaria JA; Warren CJ and Neave JA agreeing).

Election at common law requires that there be an unequivocal act by a person with full knowledge, showing that the person has chosen one of two alternative and inconsistent rights. The decision must be communicated by words or conduct to the affected party. Once an election is made, it cannot be retracted.

In my view, it is most likely that Osborn J used the term ‘election’ (which was in quotation marks) in a general sense as meaning ‘decision’, and not in the technical sense of common law election. As set out below, decision making by collecting agencies under s 46P(2) of the PE Act involves multi-factorial decision making in the areas of civil engineering, traffic engineering, and planning as well as financial considerations. Decisions under s 46P(2) will often involve judgments as to matters of degree, and opinions as to the public and private benefit derived from construction works. In such circumstances, the doctrine of common law estoppel has no application.

Osborn J observed that the assessment of credit to be given for works constructed by a developer was generally the subject of agreements. Most commonly, the agreement will be an agreement under s 173 of the PE Act. He noted, as the present case demonstrates, that when agreement breaks down the existing statutory scheme does not offer a clear way forward. He suggested, as one answer to the impasse, to amend s 149 of the PE Act to make decisions of a collecting agency as to whether works are to be accepted in lieu of payments reviewable by the Tribunal on their merits. This would provide a simple and convenient vehicle for resolution of a dispute between the collecting agency and the developer.[40]
[40]Carson Simpson (2007) 18 VR 19, 38 [89]–[90] (Osborn J).

The suggestion made by Osborn J that s 149 of the PE Act be amended to give the Tribunal jurisdiction to resolve the dispute has not yet been acted on by Parliament. If it had, the dispute in this proceeding would have been resolved by the Tribunal without the need for a 7 day court hearing and a further process to follow.

Hunt Club Estate

In Hunt Club Estate,[41] the Tribunal provided helpful insights as to the law and history of development contributions plans.
[41][2006] VCAT 2372.

As to the collection of levies, the Tribunal said:

Sections 46N and 46Q deal with collection of levies and reinforce the purpose of the development contributions plan as a funding mechanism by placing an obligation on a developer to pay the amount of the levy to the relevant collecting agency or to enter into an agreement with the relevant collecting agency to pay the amount of the levy within the time specified in the agreement. This obligation is imposed by way of a condition in the permit authorising development in respect of which a levy is payable. These sections create an obligation to pay the levy, not an obligation to carry out or provide the works, services or facilities in the development contributions plan.
Nevertheless, whilst the obligation on a developer is to pay the levy, the relevant collecting agency may accept the provision of land, works, services or facilities in part or full satisfaction of the amount of levy payable. This does not change the obligation, which is to pay. It simply provides options for payment.[42]

[42]Ibid [56]–[57] (Deputy President Gibson and Senior Member Sharkey).

The Tribunal then highlighted the pivotal significance of s 46Q in the contribution scheme created by pt 3B:

Section 46Q sets out responsibilities of municipal councils. A council must keep proper accounts of any amount of levy paid to it as a collecting agency or a development agency under this Part. When a council is paid an amount of levy as a collecting agency it must forward to the development agency any part of the levy that is imposed for the carrying out of works, services or facilities by or on behalf of that development agency. The council to which an amount of levy is paid as a development agency must apply that amount only for a purpose relating to the provision of works, services and facilities in respect of which the levy was imposed; and in accordance with the approved development contributions plan. Section 46Q also deals with situations regarding the refund of levies where a development does not proceed or the amount has not been expended within the period required by the approved development contributions plan.[43]

[43]Ibid [58].

As the Tribunal observed, the council to which an amount of levy is paid, must apply that amount for the purpose relating to the provision of works, services and facilities in respect of which the levy was imposed and in accordance with the approved development contributions plan.

‘Double dipping’ was contrary to the nature and purpose of the DCP:

We consider it is self evident from the scheme for development contributions included in the Act, and as explained in the Development Contributions Guidelines, that once an item of infrastructure is included in a development contributions plan a council cannot then require its provision by way of permit condition or a contribution towards the cost of its provision by any means other than provided for in the Act, namely by payment of a levy under the development contributions plan. It is neither fair nor equitable to do so. This was the finding of the Tribunal in Carson Simpson Pty Ltd v Casey CC (known as the Brindalee case). The Tribunal was quite scathing about the council’s attempt to “double dip”, describing it as an “oppressive and unfair double payment by the company”. The Tribunal concluded that: “The levy may be deficient, but it is all that this company is required to contribute under the Development Contributions Plan”.[44]

[44]Ibid [70].

The Tribunal considered how offsets or credits were to be handled under a DCP when a developer provides works, services or facilities in kind:

When there is an approved development contributions plan under Part 3B of the Act, the obligation of a developer is only to pay the amount of the levy to the relevant collecting agency. The relevant collecting agency may accept the provision of land, works, services or facilities by the developer in part or full satisfaction of the amount of levy payable. This applies to land, works, services or facilities provided before or after the application for the permit was made or the development is carried out.
We interpret this to mean that whenever a developer provides land, works, services or facilities these may be applied in satisfaction of any levy payable under the specific permit, and to the extent that there is any “credit” in value of the land, works, services, or facilities provided over and above the amount of levy payable, that additional value may be credited or offset against a developer’s future liability for levies under the development contributions plan.
Equally we find that, if a developer provides land, works, services or facilities up front, to the extent that the value exceeds the amount of levies payable by that developer, that value may be reimbursed to the developer by the council over time as other levies under the development contributions plan are collected.
We find that the development contributions system as provided for under Part 3B of the Act does not require accounting based solely on individual permits, but rather enables credits or offsets to be applied across all land owned by developer within the development contributions plan area.

Additionally, s 46P(3) of the PE Act contemplates that the decision of an collecting agency may be made after ‘the development is carried out’. The completion of development by a subdivider of an estate does not bring with it any implication that the Council as collecting agency is obliged to accept land or works in part or full satisfaction of the payment of levy. The development of the estate, and the actions of the Council as responsible authority under the PE Act and in various other capacities to approve the subdivision and associated works do not imply that it has made any decision under s 46P(2) or commitment as a matter of law to credit or refund Konann with the cost of the intersection works against the levy that it has paid.

Further, under cl 9 of the terms of settlement dated 29 April 2016 signed by Konann and the Council, Konann acknowledged that the Council’s position as collecting agency was that it did not, and would not agree to the provision of any recognition, credit or payment in an amount greater than the amount specified in the DCP for the delivery of the intersection adjusted and reduced to make allowance for the delivery of the northern leg of the intersection by a third party. The terms of settlement were agreed and signed before Konann commenced the intersection works. Konann undertook the intersection works knowing that this was the case.

I find on the facts that the respective positions of the parties as reflected in emails, correspondence, executed and draft agreements, have been clear since the dispute commenced. Both parties have articulated their positions. The Council has always maintained that it has never made a decision to exercise its discretion in s 46P(2) or to refuse to exercise that discretion.

I am not satisfied of the facts set out above, or any of the facts in this case constitute the exercise by the Council as collecting agency of its power under s 46P(2) of the PE Act. The facts arise from the completion of the subdivision of the estate by Konann, and the performance by the Council of its statutory responsibilities under the Subdivision Act and the PE Act. Whether taken individually or collectively they do not show that the Council has made a decision under s 46P(2), nor determined any specific amount of levy to be credited or refunded.

There are additional reasons why Konann’s application for declarations upholding its position in its dispute with the Council must fail:

(a) the power in s 46P(2) to decide to accept works in lieu of levy is solely given to the relevant collecting agency, and not to the Court or the Tribunal;

(b) the determination of an amount to be credited involves the consideration of factual, evaluative and technical matters, some of which may be conflicting; and

(c) the relevant factors to be taken into account involve matters of civil engineering, traffic engineering, planning, and costing.

Importantly:

(a) the Council is responsible for, and has full cognisance of the DCP, other projects in the DCP, and the progress of subdivision and development generally in the area covered by the DCP;

(b) the Council is the relevant body and decision maker under the DCP, and is the appropriate body to determine whether overprovision can be accommodated having regard to the financial impact of accepting works in kind to the DCP fund as a whole; and

(c) the Council has on staff, or has ready access to expert civil engineering, traffic engineering, planning and financial expertise to assist it in decision making.

These considerations highlight what Parliament has done in conferring the power in s 46P(2) on the Council as collecting agency.

Is the Council obliged to make a decision?

Konann submitted that the Council was under a duty to consider and determine whether the intersection works were to be accepted by the Council in part or full satisfaction of the amount of levy payable.

In Murphyores Incorporated Pty Ltd v Commonwealth, Mason J held that the existence of a statutory discretion implied the existence of a duty to determine any application that was made for it to be exercised.[66]
[66]Murphyores Incorporated Pty Ltd v Commonwealth (1976) 136 CLR 1, 18 (Mason J), citing R v Anderson; Ex parte Ipec-Air Pty Ltd (1965) 113 CLR 177, 197–199 (Kitto J; Menzies J agreeing).

In Yasmin v Attorney-General (Cth), the Full Court of the Federal Court referred to this principle and said:

We infer it was first the existence of a discretion and second, one “allowed by statute to the holder of an office” … to relieve against a prohibition on otherwise lawful conduct which, together, were seen as sufficient to construe the discretionary power as one which needed to be exercised, one way or the other, when the occasion arose, rather than as one whether the repository could simply fail, neglect or refuse to turn his or her mind to how the power should be exercised in circumstances that had been specifically presented to him or her. While, as the respondent submitted, this statement by Mason J cannot be taken as some kind of freestanding principle, it illustrates again that the conferral of public power by statute on the holder of public office, together with the subject matter and sphere of affectation of the power, are the principal considerations in identifying whether Parliament intends the repository must, on a given occasion, consider and determine how the power should be exercised.[67]

[67]Yasmin v Attorney-General (Cth) (2015) 236 FCR 169, 187 [79] (Kenny, Robertson and Mortimer JJ).

I accept Konann’s submission that once application is made to a collecting agency for the exercise of its discretion under s 46P(2), the collecting agency is under a duty to consider and determine the application. As with any other statutory office holder, if the holder of an office fails to discharge its duty, it is potentially amenable to judicial review. In the present instance the Council has a duty to consider and determine Konann’s request for a refund or credit under s 46P(2) of the PE Act.

Is the Council required to exercise its discretion in Konann’s favour for the whole of the intersection works?

Konann relied on a line of authority where courts have held that a decision maker is required by the circumstances of the case to exercise an apparent discretion. An apparent discretion may be rendered obligatory having regard to the purpose of the act, the statutory power in question and the circumstances of the case.

In Julius v Bishop of Oxford, Lord Selborne said:

The question whether a Judge, or a public officer, to whom a power is given by such words, is bound to use it upon any particular occasion, or in any particular manner, must be solved aliunde, and, in general, it is to be solved from the context, from the particular provisions, or from the general scope and objects, of the enactment conferring the power.[68]

[68]Julius v Bishop of Oxford (1880) 5 App Cas 214, 235 (Lord Selborne).

In Finance Facilities Pty Ltd v Federal Commissioner of Taxation, Windeyer J said of a taxation rebate where the taxpayer had demonstrated the circumstances which established an entitlement to receive it:

This does not depend on the abstract meaning of the word ‘may’ but of whether the particular context of words and circumstances make it not only an empowering word but indicate circumstances in which the power is to be exercised – so that in those events the ‘may’ becomes a ‘must’.[69]

[69]Finance Facilities Pty Ltd v Federal Commissioner of Taxation (1971) 127 CLR 106, 134 (Windeyer J; Barwick CJ agreeing) (‘Finance Facilities’).

In Commissioner of State Revenue (Vic) v Royal Insurance Ltd, Brennan J said:

The Commissioner is a public officer vested with a power to be exercised for the purpose, inter alia, of discharging her liabilities. When the power exists and the circumstances call for the fulfilment of a purpose for which the power is conferred, but the repository of the power declines to exercise the power, mandamus is the appropriate remedy even though the repository has an unfettered discretion in other circumstances to exercise or to refrain from exercising the power. Mandamus will go where there is a duty to pay money.[70]

[70]Commissioner of State Revenue (Vic) v Royal Insurance Ltd (1994) 182 CLR 51, 88 (Brennan J) (citations omitted).

In the same decision, Dawson J said:

It must be borne in mind that the occasion for the exercise of the authority conferred by s. 111(1) is the finding of an overpayment of stamp duty; that is to say, a finding that the Comptroller received moneys to which she had no entitlement. The sub-section must be read either as requiring her to refund the overpayment or as conferring a discretion upon her to keep the moneys notwithstanding that she had no entitlement to receive them. The principle that a statute will not be read as authorizing expropriation without compensation unless an intention to do so is clearly expressed has been described as a ‘firmly established rule of law’. It is at least an analogous proposition that clear words are required to authorize the retention of moneys received without any entitlement and I, for my part, would not construe a statute as conferring a discretion to do so unless such an intention were made explicit.[71]

[71]Ibid 99 (Dawson J) (citations omitted).

The principle in Finance Facilities was applied by three members of the High Court in International Finance Trust Co Ltd v NSW Crime Commission,[72] and by a six member majority of the High Court in Attorney-General (NT) v Emmerson.[73]
[72](2009) 240 CLR 319, 373 [121] (Hayne, Crennan and Kiefel JJ).
[73](2014) 253 CLR 393, 434 [68] n 183 (French CJ, Hayne, Crennan, Kiefel, Bell and Keane JJ, Gageler J dissenting).

In my opinion, this line of authority has no application in the present circumstances. This is not a taxation case. Rather, this is a case the Council is required to make a decision of a different and complex character. It involves multi-factorial decision making. It involves balancing conflicting factors, the making of an evaluative judgment and the consideration of expert material. The authority relied on by Konann simply has no application to the present circumstances.

Another principle of interpretation relied on by Konann was the principle that a statute will not be read as authorising the expropriation of property without compensation unless the intention to do so is clearly expressed. [74]
[74]Federal Commissioner of Taxation v Northumberland Development Co Pty Ltd (1995) 59 FCR 103, 113 (Beaumont J); CJ Burland Pty Ltd v Metropolitan Meat Industry Board (1968) 120 CLR 400, 406-7 (Kitto J), 415 (Owen J); DC Pearce and RS Geddes, Statutory Interpretation in Australia (LexisNexis Butterworths, 8^th ed, 2014) 230–231 [5.2.1].

A similar submission was unsuccessfully argued in 271 William Street Pty Ltd v City of Melbourne.[75] It was also rejected by the High Court in Lloyd v Robinson.[76] In the latter decision, the High Court rejected an argument that the transfer of land to the Crown for use as a reserve in a subdivision was the confiscation of private property without compensation. Since these decisions, there have been many subsequent cases, including decisions of the High Court where the provisions of planning schemes and the conditions of permits requiring the provision of land for public use have been upheld.[77]
[75][1975] VR 156, 166–167 (Harris J).
[76](1962) 107 CLR 142, 154 (Kitto, Menzies and Owen JJ).
[77]See, eg, Allen Commercial Constructions Pty Ltd v North Sydney Municipal Council (1970) 123 CLR 490; Planning Commission (WA) v Temwood Holdings Pty Ltd (2004) 221 CLR 30.

The Council on the other hand, submitted that its power in s 46P(2) of the PE Act is discretionary. It relied on s 45(1) of the Interpretation of Legislation Act 1984 (Vic) to the effect that the word ‘may’ is to be construed as meaning that the power may be exercised, or not, at discretion.

Moreover as Osborn J held in Carson Simpson,[78] the question whether works should be accepted in lieu of levy ‘crosses the line’ into the area reserved for governmental decision-making as distinct from the exercise of a permit condition discretion.
[78]Carson Simpson (2007) 18 VR 19, 36 [74] (Osborn J).

In my view also, the question whether works should be accepted in lieu of levies is a discretionary decision to be made by the Council as the relevant collecting agency.

There may be very good reason why a collecting agency may not wish to exercise its discretion to accept the provision of works under s 46P(2). The works may be defective, or unsuitable or inconsistent with the requirements or standards required by the DCP. The Council may decide not to accept the works, or to accept them only in part satisfaction of the amount of levy payable. It is neither necessary nor appropriate for me in this proceeding to seek to identify all of the reasons why a collecting agency might properly decline to exercise its discretion under s 46P(2).

Nonetheless, there is also the consideration that a failure to exercise the power contained in s 46P(2) should not lead to double dipping, where the Council collects levy from the developer and from other landowners but nonetheless requires the developer to construct the same works, or works that include works the subject of the DCP and the responsibility of the Council as development agency to perform.[79]
[79]Ibid 36 [75], 37 [84].

Should the Court exercise the Council’s discretion?

The Court’s role in the context of s 46P(2) is fairly described in R v Anderson; Ex parte Ipec-Air Pty Ltd dealing with a different statutory provision:

It is a general principle of law, applied many times in this Court and not questioned by anyone in the present case, that a discretion allowed by statute to the holder of an office is intended to be exercised according to the rules of reason and justice, not according to private opinion; according to law, and not humour, and within those limits within which an honest man, competent to discharge the duties of his office, ought to confine himself: …. The courts, while claiming no authority in themselves to dictate the decision that ought to be made in the exercise of such a discretion in a given case, are yet in duty bound to declare invalid a purported exercise of the discretion where the proper limits have not been observed. Even then a court does not direct that the discretion be exercised in a particular manner not expressly required by law, but confines itself to commanding the officer by writ of mandamus to perform his duty by exercising the discretion according to law.[80]

[80]R v Anderson;Ex parte Ipec-Air Pty Ltd (1965) 113 CLR 177, 189 (Kitto J) (citations omitted).

In Minister for Aboriginal Affairs v Peko-Wallsend Ltd, Mason J said:

The limited role of a court reviewing the exercise of an administrative discretion must constantly be borne in mind. It is not the function of the court to substitute its own decision for that of the administrator by exercising a discretion which the legislature has vested in the administrator. Its role is to set limits on the exercise of that discretion, and a decision made within those boundaries cannot be impugned…
It follows that, in the absence of any statutory indication of the weight to be given to various considerations, it is generally for the decision-maker and not the court to determine the appropriate weight to be given to the matters which are required to be taken into account in exercising the statutory power:… I say “generally” because both principle and authority indicate that in some circumstances a court may set aside an administrative decision which has failed to give adequate weight to a relevant factor of great importance, or has given excessive weight to a relevant factor of no great importance. So too in the context of administrative law, a court should proceed with caution when reviewing an administrative decision on the ground that it does not give proper weight to relevant factors, lest it exceed its supervisory role by reviewing the decision on its merits.[81]

[81]Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24, 40 (Mason J) (citations omitted).

In an often-cited passage, Brennan J said in Attorney-General (NSW) v Quin:

The merits of administrative action, to the extent that they can be distinguished from legality, are for the repository of the relevant power and, subject to political control, for the repository alone.
The consequence is that the scope of judicial review must be defined not in terms of the protection of individual interests but in terms of the extent of power and the legality of its exercise. In Australia, the modern development and expansion of the law of judicial review of administrative action have been achieved by an increasingly sophisticated exposition of implied limitations on the extent or the exercise of statutory power, but those limitations are not calculated to secure judicial scrutiny of the merits of a particular case.[82]

[82]Attorney-General (NSW) v Quin (1990) 170 CLR 1, 36 (Brennan J).

In Osland v Secretary, Department of Justice (No 2),[83] the High Court considered whether on determining of a review under s 148 of the Victorian Civil and Administrative Tribunal 1998 (Vic) (‘the VCAT Act’), the Court should substitute its view for that of the Tribunal, or remit the matter to the Tribunal for rehearing and determination.
[83](2010) 241 CLR 320 (‘Osland’).

As to this issue, French CJ, Gummow and Bell JJ said:

Where there is a factual matter that has to be determined as a consequence of the appeal, it may be that it is able conveniently to be determined by the Court of Appeal upon uncontested evidence or primary facts already found by the Tribunal. When the outstanding issue involves the formation of an opinion which is, as in this case, based upon considerations of public interest, then it should in the ordinary case be remitted to the body established for the purpose of making that essentially factual, evaluative and ministerial judgment.[84]

[84]Ibid 333 [20] (French CJ, Gummow and Bell JJ).

Likewise, Hayne and Kiefel JJ held that, consistent with the terms of the VCAT Act, the Court of Appeal could not assume the function of the Tribunal and determine for itself the issue to be determined by the Tribunal.[85] It was not for the Court to impermissibly assume the role of the Tribunal and substitute its own decision.[86]
[85]Ibid 351 [73] (Hayne and Kiefel JJ).
[86]Ibid 352 [75].

In Chief Commissioner of Police v McIntosh,[87] Emerton J, referring to Osland and the limited nature limited nature of an appeal under s 148 of the VCAT Act, observed that the High Court had warned against the Supreme Court making ‘essentially factual, evaluative and ministerial judgments that the legislature has given to the Tribunal to make’.[88] A proceeding by way of judicial review of administrative decision making is in no different position. The role of the Court is to ensure the legality of the decision. This includes ensuring that the decision is made by the decision maker authorised by Parliament to make the decision.
[87](2010) 33 VAR 355.
[88]Chief Commissioner of Police v McIntosh (2010) 33 VAR 355, 362 [36] (Emerton J).

In this proceeding, Konann seeks to have the court declare that it is entitled to be credited with the whole of the value of the intersection works assessed at an amount exceeding $3.6 million. To make such a declaration would usurp the role and power of the collecting agency which alone is given the authority to accept the provision of land and works in part or full satisfaction of the levy.

In the present case the Council is the primary decision maker. The Council, as collecting agency, has been given the power to accept the provision of land, works, services or facilities by Konann in part or full satisfaction of the amount of levy payable. This proceeding is not the opportunity for a merits review. It is not the role of the court to substitute its own decision for that of the Council. Still less is it the function of the court to pre-empt the primary decision maker by determining the issue in advance. Rather the role of the court is to facilitate decision making by the body entrusted by Parliament to make the decision, and then to undertake judicial review of that decision on specific grounds if requested to do so.

Further issues

The reasons that I have given above are sufficient to resolve the proceeding. The proceeding must be dismissed as it is the Council, not this Court, that is the primary decision-maker of the issues raised for decision by Konann. However, the parties provided extensive argument and evidence as to four issues that will inevitably arise when the Council considers its decision concerning the cost of the intersection works under s 46P(2) of the PE Act.

In view of the extensive material and submissions presented and to assist the parties to avoid the need to come back to the Court, I will offer some guidance as to the following issues:

(a) was Konann required to construct the intersection works?

(b) is there ‘double dipping’ between the payment of the levy and the construction of the intersection works?

(c) did Konann benefit from the construction of the works?

(d) what are the relevant factors under s 46P(2)?

Was Konann required to construct the intersection works?

In Carson Simpson, Osborn J distinguished between the situation where a council elects to require a subdivider to construct infrastructure works contemplated by a DCP, and the situation where the council stipulated that the necessary infrastructure is to be in place without nominating whether government or a private entity was to provide it.[89] In Carson Simpson, the applicable planning controls were the planning scheme and the DCP, and the requirements were imposed by the council by permit condition.
[89]Above, [86].

As a result of the changes to the planning scheme, the DCP and the introduction of the PSP, requirements are now imposed on subdividers by the PSP itself as well as by the other controls that I have set out above. Under the planning regime that now exists, the permit has become a vehicle by which the requirements of the PSP can be made specific to the estate for which a permit to subdivide is granted. For example:

(a) Clause 1.1 of the PSP describes the role of the PSP (among other things) as detailing the form and conditions that must be met by future land use and development.[90] Clause 1.3 states that the PSP is to be implemented by development proponents who must develop land generally in accordance with the PSP.[91]
[90]Above, [63].
[91]Above, [64].

(b) Under PSP cl 4.8.3, developers are (among other things) required to design, construct and control all intersections with existing or proposed arterial roads and to provide land for right of way flaring at arterial road connections. [92] Glasscocks Road was a proposed arterial road; and this requirement extended to its intersection with Wheelers Park Drive. Konann was required to construct bus stops as part of subdivision works and pedestrian access paths to bus stops.[93]
[92]Above, [65].
[93]Above, [69].

(c) As with other subdividers, Konann was required by PSP cl 5.1.1 to meet the costs of delivering connector streets and local streets, intersection works and traffic management measures along arterial roads, connector streets and local streets.[94]

(d) Clause 37.07-9 of the planning scheme required any permit granted to be generally in accordance with the PSP applying to the land.[95] Clause 37.07-10 provided that any requirement in the PSP must be met. Clause 37.07-10 provided not only that a permit granted must be generally in accordance with the PSP, but that the permit must include any conditions or requirements specified in the PSP.[96]

(e) The permit required the preparation of detailed plans and additional information as to what was to be done by Konann. Condition 4 made provision for an amended subdivisional plan allocating the intersection within Stage 6 of subdivisional works unless otherwise agreed by VicRoads. Condition 46 provided a detailed procedure for the intersection plans works to be approved by VicRoads, and for the intersection to be constructed to the satisfaction of VicRoads in accordance with the approved functional layout drawing to the satisfaction of both VicRoads and the Council.[97] This was to be at no cost to VicRoads.[98]

[94]Above, [71].

[95]Above, [56].

[96]Above, [57].

[97]Above, [81]-[81].

[98]Above, [81].

Taken cumulatively, the provisions of the planning scheme, including the PSP and the DCP, the conditions of the permit and the other statutory controls leave no room for doubt that Konann was required by the Council to construct the intersection and carry out the intersection works. Those intersection works included works the subject of the DCP. The fact that the PSP imposed requirements was not contested by the Council.

It makes no difference whether the Council requires a subdivider to carry out infrastructure works the subject of a DCP by making provision in its planning scheme for the subdivider to perform the DCP works, or whether it does so through permit conditions or a combination of the two. From the subdivider’s perspective the position is the same. The developer is required by binding planning controls to perform the DCP works for which the subdivider is also required to pay an infrastructure levy under the DCP. All other landowners are also required to pay their DCP contributions to the collecting agency.

Is there ‘double dipping’ between the payment of the levy and the construction of the intersection works?

Konann has paid or substantially paid the infrastructure levy under the DCP for infrastructure works described in the DCP. Those works include part of project RD-18 and the completion of certain infrastructure works at the intersection. Unless recognition is given by the Council for the intersection works that Konann has completed that are also part of DCP project RD-18, there would be double dipping.

Did Konann benefit from the construction of the intersection works?

The Council submitted that the conditions in the permit to this effect were validly imposed by the Council, and that in any event Konann did not seek review by the Tribunal of any of the conditions imposed in the permit. The Council relied on the following:

(a) Section 62(1)(a) of the PE Act which empowers a responsible authority to include any condition in a permit which the planning scheme requires to be included. Section 62(5)(a) empowers a responsible authority to include conditions required to implement a DCP. Likewise, s 62(5)(c) allows a responsible authority to include a condition that specified works, services or facilities that the responsible authority ‘considers necessary to be provided on or to the land as a result of the permit’ be provided or paid for wholly or partly by the permit applicant.

(b) A condition whereby the intersection works were to be completed by stage 6 of the subdivision was consistent with the test adopted by the High Court in Cardwell SC v King Ranch (Australia) Pty Ltd,[99] where the works were considered to be ‘reasonably required … by the subdivision of the land’. Similar tests had been adopted by courts in other cases.[100]
[99](1984) 54 LGRA 110.
[100]Allan Commercial Constructions Pty Ltd v North Sydney Municipal Council (1970) 123 CLR 490; Lloyd v Robinson (1962) 107 CLR 142, 155 (Kitto, Menzies and Owen JJ); Planning Commission (WA) v Temwood Holdings Pty Ltd (2004) 221 CLR 30; Melbourne Water Corporation v Dome Design Pty Ltd [2007] VSC 114 and 271 William Street Pty Ltd v City of Melbourne [1975] VR 156.

(c) The Council accepted that the permit imposed a requirement to construct the intersection and approaches to the intersection. However, it submitted that the requirement was justified having regard to the size of the subdivision and the traffic it would generate.

(d) The 2003 traffic report which accompanied the permit application stated that the traffic volumes generated by the estate were already accounted for in the modelling of the wider road network and could be adequately accommodated on the external road network, subject to the timely provision of the necessary infrastructure. The DCP required the interim signalised intersection of Glasscocks Road and Wheelers Park Drive to be provided upon ‘subdivision access demand’. The report also stated that if the subdivision was staged from west to east, sufficient funds from the sale of lots could be raised for the construction of Wheelers Park Drive and the signalised intersection along with the cost of development of the rest of the estate.

(e) The traffic engineers noted in a letter dated 30 January 2014 that Glasscocks Road was identified by the PSP as ultimately carrying 30,000 vpd. It would be distributed 50% eastbound and 50% westbound. The residential subdivision to the north of Glasscocks Road when developed would generate about 50% of the traffic generated by the estate.

The Council submitted that the scope of what was required by the permit was properly a function of the scale and location of the subdivision proposed by Konann. At 77 hectares and 997 lots, the estate was one of the biggest parcels of land in the PSP area.[101] The permit application was to develop all stages. It was clear that there was a link between the traffic generation to be occasioned by the subdivision of the estate and the need to construct the intersection.
[101]The subdivision in Carson Simpson, involving 232 lots, was much smaller.

In my view, there is merit in the Council’s submissions. Clearly, the development of the estate gained significant benefit from the construction of the intersection. Although the evidence does not permit me to say what percentage of the ultimate users of the intersection are generated from lots in the subdivision, it is plain that the intersection benefits properties in the estate.

In considering the exercise of the discretion in s 46P(2), it is relevant for the collecting agency to consider the extent to which the intersection works constructed by Konann benefit the properties in the estate. It is reasonable and appropriate that the community benefit derived from the works, and the level of benefit obtained by Konann or a subdivider from the works should be factors taken into consideration when the collecting agency is considering the exercise of its discretion under s 46P(2) and determining the amount of levy to be provided by way of credit or refund from the total amount of levy payable by Konann.

What are the relevant factors under s 46P(2) of the PE Act?

In my view, and without attempting to identify all factors, the relevant factors to be taken into consideration when a collecting agency decides whether to accept the provision of works in part or full satisfaction of levy payable by an applicant include:

(a) the cost of the works to be performed as set out in the DCP;

(b) the extent to which the works as set out in the DCP have been completed by the applicant;

(c) the standard to which the works have been constructed against the standard required by the DCP;

(d) whether the works have been completed to the satisfaction of the collecting agency;

(e) The extent to which the works have benefitted the community;

(f) the need to avoid double dipping by the collecting agency;

(g) the extent to which the works are reasonably required for the development of the applicant’s land, and any resulting benefit to the applicant’s land;

(h) whether allowance is to be made for any overprovision of works under the DCP;

(i) the financial impact on the DCP of the acceptance of the works in satisfaction of levy; and

(j) the need for the collecting agency to act in a fair and equitable manner at all times and as a model litigant.

Conclusion

In this proceeding Konann seeks a declaration to the effect that it is entitled to a credit or deduction against its levy liability in an amount of $3.6 million being the cost of the intersection works. It seeks to compel the Council to act accordingly. For the reasons that I have given above, Konann is not entitled to this relief from the Court.

The Council as collecting agency under the DCP is the body empowered under s 46P(2) of the PE Act to accept the provision of works in part or full satisfaction of the amount of levy payable and is the body which must determine Konann’s application for a credit or refund. In so doing, the Council is required to comply with the requirements of procedural fairness.

The proceeding will be dismissed.

[2018] VSC 565

27 September 2018