L & G Management Pty Ltd v Council of the City of Sydney

[2021] NSWLEC 149

Land and Environment Court

New South Wales

Medium Neutral Citation:

L & G Management Pty Ltd v Council of the City of Sydney [2021] NSWLEC 149

Hearing dates:

25 August 2021

Date of orders:

17 December 2021

Decision date:

17 December 2021

Jurisdiction:

Class 1

Before:

Duggan J

Decision:

See paragraph 73

Catchwords:

ENVIRONMENT AND PLANNING — Land and Environment Court — s 56A appeal against decision of Commissioner — voluntary offer of dedication of land to obtain bonus floor space ratio — public benefit offer — Green Square community infrastructure — source of power to give effect to a dedication of land absent a voluntary planning agreement — cl 6.14 of Sydney Local Environmental Plan — ss 4.17, 7.4, 7.7 and 7.11 of Environmental Planning and Assessment Act 1979 —appeal dismissed

Legislation Cited:

Environmental Planning and Assessment Act 1979 (NSW)

Land and Environment Court Act 1979 (NSW)

Sydney Local Environmental Plan 2012

Cases Cited:

Fairfield City Council v N & S Olivieri Pty Ltd [2003] NSWCA 41

Fitch v Shoalhaven City Council (1987) 67 LGRA 165

L & G Management Pty Ltd v Council of the City of Sydney [2021] NSWLEC 1084

Lake Macquarie City Council v Hammersmith Management Pty Ltd (2003) 132 LGERA 225

Maitland City Council v Anambah Homes Pty Ltd (2005) 64 NSWLR 695

Sanctuary Investments Pty Ltd v Baulkham Hills Shire Council (2006) 153 LGERA 355

Segal v Waverley Council (2005) 64 NSWLR 177

Category:

Principal judgment

Parties:

L & G Management Pty Ltd (Applicant)
The Council of the City of Sydney (Respondent)

Representation:

Counsel:
A Pickles SC (Applicant)
M Wright SC (Respondent)

Solicitors:
Mills Oakley (Applicant)
City of Sydney (Respondent)

File Number(s):

2021/76957

Publication restriction:

Nil

 Decision under appeal 

Court or tribunal:

Land and Environment Court of NSW

Jurisdiction:

Class 1

Citation:

[2021] NSWLEC 1084

Date of Decision:

19 February 2021

Before:

Horton C

File Number(s):

2021/76957

Judgment

Nature of proceedings

1. In these proceedings the Applicant, L & G Management Pty Ltd (L & G), appeals against the decision of a Commissioner of this Court dismissing its appeal with respect to Council of the City of Sydney (the Council) deemed refusal of Development Application D/2019/517 (DA) for the demolition of the two-storey portion of an existing part two-storey, part eight-storey building, remediation, construction of a five-storey building for commercial and retail uses, minor alterations to the retained eight-storey building, subdivision and dedication of a parcel of land (Proposed Development) at 191-195 Botany Road, Waterloo (Subject Land).

2. The Commissioner delivered reasons for his decision in: L & G Management Pty Ltd v Council of the City of Sydney [2021] NSWLEC 1084. The Commissioner dismissed the appeal.

3. L & G contends that in dismissing its appeal the Commissioner erred in law in two respects (excluding the particulars of each ground):

1. The Commissioner erred in law by asking the wrong question as to whether the Court had power to give effect to the dedication pursuant to a condition under Division 7 of Part 7 of the Environmental Planning and Assessment Act 1979 (NSW) (EP&A Act) (Ground 1); and

2. The Commissioner erred in law by concluding that absent a voluntary planning agreement, or the land being identified under a contributions plan, the Court had no power to give effect to the Applicant’s offer to dedicate the land (Ground 2).

4. The grounds of appeal relate to the manner in which the Commissioner satisfied himself as to the power of the Court to give effect to a proposed dedication of a 2.4m strip of land along the entire Botany Road frontage of the Subject Land to the Council (Proposed Dedication).

Facts

5. The Proposed Dedication comprised Lot 3, adjacent to Botany Road, as designated on the draft plan of subdivision dated 24 July 2020 prepared by Jonathan Charles Keen, as extracted in Figure 1 below:

Figure 1: Plan of subdivision

6. On 13 November 2020, L & G made, what it described as, a public benefit offer detailing the Proposed Dedication (the Public Benefit Offer), which was in the following terms:

Applicant’s public benefit offer in connection with a development application (DA/2019/517)

This is an offer from: BJB Architects Pty Ltd

For: Community Infrastructure in Green Square

Site address: 191-195 Botany Road, Waterloo (Lot 2, as subdivided)

This offer has been made with the consent of the registered owner(s) of the land.

In accordance with clause 6.14 of the Sydney LEP 2012, the general nature and extent of the provision to be made under the offer is as follows:

Site Area

977.05m²

Base FSR / FSA permitted by LEP/DCP

1:5:1 (1465.575m²)

Amount of additional FSR / FSA sought

0:33:1 (322.43m²)

Additional FSA rate (inc. GST):

(b) Non-residential Use

$200 per 1m²

Total Value of additional FSR

$64,485

In addition, in accordance with Sydney DCP 2012, a 2.4m land dedication setback is provided for the purpose of footpath widening along the Botany Road frontage of the site.

It is intended that the benefits under the offer do not include development contribution under section 94 of the Environmental Planning and Assessment Act 1979.

It is intended that should development consent be granted, this offer will be consolidated and crystallised into a Voluntary Planning Agreement with the Council.

The agreement will comply with the requirements of the Environmental Planning and Assessment Act and Regulations, and contain mechanisms for completion of any works and / or land dedication. The Planning Agreement may be registered by the Registrar-General.

7. L & G contends the Public Benefit Offer was an offer of “Green Square community infrastructure” in accordance with cl 6.14 of the Sydney Local Environmental Plan 2012 (the LEP), which operated to permit the DA to have a base floor space that included the bonus floor space provided for in cl 6.14 over and above the floor space ratio (FSR) provided in cl 4.4 of the LEP.

8. L & G submitted a number of cl 4.6 objections that related to the DA and relied upon them to justify an extent of non-compliance with the FSR control depending upon which method of calculation the Court adopted. Consistent with L & G’s submissions the Commissioner accepted that the relevant FSR calculated for the Subject Land was:

85.   I must consider whether additional, or ‘bonus’, floor space is applicable to the site in accordance with cl 6.14 of the SLEP in order to first determine the FSR applicable to the site.

109.   For all of the reasons set out above, I find that the site does benefit from the additional FSR bonus of 0.5:1 for a total FSR applicable to the site of 2:1.

110.   However, as the proposal is for a total FSR of 2.65:1 on Lot 70, the Applicant relies upon a written request prepared in accordance with cl 4.6 of the SLEP, authored by ABC Planning Pty Ltd dated November 2020 (written request) (Exhibit 3, Attachment 10, Appendix 2).

9. On that basis, the Commissioner proceeded to determine the matter on the finding that the cl 4.6 objection only needed to relate to the exceedance above the base FSR of 2:1 being an amount of FSR including a bonus entitlement under cl 6.14.

10. L & G have not raised any issues in this appeal as to the correctness or otherwise of the Commissioner’s findings on this question or his approach to the determination of the cl 4.6 objection.

11. The Council contends that L & G’s questions raised in this appeal either do not identify an error of law or are a mischaracterisation of the power of the Court to grant consent absent a voluntary planning agreement (VPA). The Council seeks that the appeal be dismissed with costs.

Legislative provisions

LEC Act

12. Section 56A of the Land and Environment Court Act 1979 (NSW) (LEC Act) provides:

56A Class 1, 2, 3 and 8 proceedings—appeals to the Court against decisions of Commissioners

(1)   A party to proceedings in Class 1, 2, 3 or 8 of the Court’s jurisdiction may appeal to the Court against an order or a decision of the Court on a question of law, being an order or a decision made by a Commissioner or Commissioners.

(2)   On the hearing of an appeal under subsection (1), the Court shall—

(a)   remit the matter to the Commissioner or Commissioners for determination by the Commissioner or Commissioners in accordance with the decision of the Court, or

(b)    make such other order in relation to the appeal as seems fit.

(3)   Notwithstanding subsection (1), an appeal shall not lie to the Court under that subsection in respect of a question of law that has been referred to, and determined by, a Judge pursuant to section 36.

13. Accordingly, the present appeal is limited to questions of law.

The LEP

14. The definition and requirements of “Green Square community infrastructure” are contained in s 6.14 of the LEP as follows:

6.14 Community infrastructure floor space at Green Square

(1)   The objectives of this clause are as follows—

(a)   to allow greater densities where Green Square community infrastructure is also provided,

(b)   to ensure that such greater densities reflect the desired character of the localities in which they are allowed and minimise adverse impacts on the amenity of those localities,

(c)   to provide for an intensity of development that is commensurate with the capacity of existing and planned infrastructure.

(2)   The consent authority may consent to development that results in additional floor space in accordance with subclause (4) if the development includes Green Square community infrastructure.

(3)   In deciding whether to grant development consent, the consent authority—

(a)   must be satisfied that the development is consistent with the objectives of this clause, and

(b)   must be satisfied that the Green Square community infrastructure is reasonably necessary at Green Square, and

(c)   must take into account the nature of the Green Square community infrastructure and its value to the Green Square community.

(4)   Under subclause (2), a building on land in an Area specified in paragraph (a), (b), (c), (d), (e) or (f) is eligible for an amount of additional floor space determined by the consent authority but no more than that which may be achieved by applying the floor space ratio specified in the relevant paragraph to the building—

(a)   Area 5—0.25:1,

(b)   Area 6—0.5:1,

(c)   Area 7—0.75:1,

(d) Area 8—1:1,

(e)   Area 9—1.5:1,

(f) Area 10—2.2:1.

(5)   In this clause—

Area means an Area shown on the Floor Space Ratio Map.

Green Square community infrastructure means development at Green Square for the purposes of recreation areas, recreation facilities (indoor), recreation facilities (outdoor), public roads, drainage or flood mitigation works.

EP&A Act

15. Section 4.17 of the EP&A Act relevantly provides:

4.17   Imposition of conditions

(1)   Conditions—generally A condition of development consent may be imposed if—

(a)   it relates to any matter referred to in section 4.15(1) of relevance to the development the subject of the consent, or

…

(h)   it is authorised to be imposed under section 4.16(3) or (5), subsections (5)–(9) of this section or section 7.11, 7.12, 7.24 or 7.32.

16. In reference to the nature and requirements of VPAs and when they can and cannot be required to be made, the relevant provisions are ss 7.4 and 7.7 of the EP&A Act which provide as follows:

7.4   Planning agreements

(1)   A planning agreement is a voluntary agreement or other arrangement under this Division between a planning authority (or 2 or more planning authorities) and a person (the developer)—

(a)   who has sought a change to an environmental planning instrument, or

(b)   who has made, or proposes to make, a development application or application for a complying development certificate, or

(c)   who has entered into an agreement with, or is otherwise associated with, a person to whom paragraph (a) or (b) applies,

under which the developer is required to dedicate land free of cost, pay a monetary contribution, or provide any other material public benefit, or any combination of them, to be used for or applied towards a public purpose.

7.7   Circumstances in which planning agreements can or cannot be required to be made

(1)   A provision of an environmental planning instrument (being a provision made after the commencement of this section)—

(a)   that expressly requires a planning agreement to be entered into before a development application or application for a complying development certificate can be made, considered or determined, or

(b)   that expressly prevents a development consent from being granted or having effect unless or until a planning agreement is entered into,

has no effect.

(2)   A consent authority cannot refuse to grant development consent on the ground that a planning agreement has not been entered into in relation to the proposed development or that the developer has not offered to enter into such an agreement.

(3)   However, a consent authority can require a planning agreement to be entered into as a condition of a development consent, but only if it requires a planning agreement that is in the terms of an offer made by the developer in connection with—

(a)   the development application or application for a complying development certificate, or

(b)   a change to an environmental planning instrument sought by the developer for the purposes of making the development application or application for a complying development certificate,

or that is in the terms of a commitment made by the proponent in a statement of commitments made under Part 3A.

(4)   In this section, planning agreement includes any agreement (however described) containing provisions similar to those that are contained in an agreement referred to in section 7.4.

Ground 1

Matters for determination

17. From a consideration of the particulars in the Summons relating to this ground and L & G’s submissions, the fundamental question for determination relating to this ground was whether the Commissioner erred by only considering he had power to approve the Proposed Dedication if it met the requirements either for a VPA or dedication pursuant to s 7.11 of the EP&A Act. The fundamental submission put by L & G is that cl 6.14 of the LEP was the source of power for the acceptance of the volunteered dedication. It was contended that the Commissioner erred in not finding that cl 6.14 provided a relevant source of power to permit a grant of development consent.

L & G’s submissions

18. The question posed by the Commissioner at [131] of his reasons was the correct question but in answering that question he confused the offer to dedicate the land as part of the development with a “public benefit” offer under Division 7 of Part 7 of the EP&A Act. The error is manifested in [133] where he described L & G’s offer in those terms.

19. L & G’s offer to dedicate the land was not a public benefit offer under Division 7 of Part 7 but was an offer to carry out Green Square community infrastructure under cl 6.14 of the LEP. The source of the power for the offer was cl 6.14 and not Division 7 of Part 7. The Commissioner, misunderstanding the nature of the offer, asked himself the wrong question at [135]-[140] being whether the Court had power to give effect to the dedication under Division 7 of Part 7. The correct question was whether the Court had power to approve the application, which included the voluntary dedication of community infrastructure pursuant to cl 6.14 of the LEP for the achievement of additional floor space. If the Commissioner posed this question, then the answer must have been “yes”.

20. Whilst s 7.11 of the EP&A Act is recognised as the sole source of power for imposing a condition that requires the dedication of land, the subject application did not require the dedication as it was volunteered by L & G as part of its development application. To the extent that L & G proposed conditions that the land be dedicated free of cost such a condition was not one “requiring the dedication” in the manner understood by the authorities as the dedication in this case formed part of the application and was voluntary. This position is consistent with the implicit position stated in Maitland City Council v Anambah Homes Pty Ltd (2005) 64 NSWLR 695 (Anambah Homes) that if the dedication had been offered voluntarily it would have been lawful.

21. A condition of this kind is lawful pursuant to s 4.17(1)(a) as it relates to a matter referred to in s 4.15, which includes the LEP.

22. However, even if such a condition was not lawful in that it “required” the dedication of land the dedication could have been effected without such a condition – it was enough, as the subdivision plan included the dedication of land, that the development be carried out in accordance with the development application.

Council’s submissions

23. The Commissioner did not pose the wrong question or misapprehend L & G’s case.

24. An offer to dedicate land by whatever means is not a source of power to impose a condition requiring the dedication of that land. There must be identified some source of power and in the EP&A Act that is either s 7.11 or a VPA. Neither was proposed in this application.

25. Clause 6.14 is not a source of power for the imposition of a condition requiring the dedication of land, it is no more than a floor space bonus provision. Clause 6.14 creates an eligibility for additional floor space. That eligibility does not provide an alternative source of power to require (or give effect to) a proposed dedication of land free of cost.

26. The references made by L & G to the Commissioner misunderstanding the nature of the offer by describing it as a “public benefit offer” discloses no error. The Commissioner merely adopts the characterisation of the offer used by L & G in its offer.

27. The proposition that the dedication is not “required” because it is voluntary elides the question as to the source of power to include an obligation to dedicate land in a development consent that operates in rem.

Findings on Ground 1

28. Fundamental to the determination of Ground 1 is the question as to whether the development application, which was the subject of the appeal before the Commissioner, was one that was capable of being approved by operation of cl 6.14 absent a VPA or a contribution under s 7.11. Whilst L & G contends this was the wrong question, it is, in effect, submitting that the Commissioner arrived at the wrong answer to the correct question.

29. In determining the question of power, it is necessary to understand what in fact the Commissioner did and why. From his reasons the Commissioner posed the question at [131] in the following terms:

Notwithstanding my conclusion at [109] that the land proposed to be dedicated satisfies the test at subcl 6.14(3) of the SLEP, I must determine whether or not the Court has power to give effect to the dedication of land as proposed by the Applicant.

30. What can be derived from this question is that the Commissioner did not in fact limit his consideration merely to the operation of Division 7 of Part 7, but rather posed the question more broadly. He further went on to note the submissions of the parties at [132]-[133]:

[132]   Ms Hammond, counsel for Council, submits that s 7.8 of the EPA Act constrains the Court from imposing a condition that would have the effect of accepting a dedication on Council’s behalf. Council does not support any conditions of consent that provide for the dedication of land whether by Voluntary Planning Agreement (VPA) or otherwise.

[133] In the alternative, the Applicant submits that, as was the case in the development at 34-38 McEvoy Street, a VPA is not required for the land dedication under the terms of cl 6.14 of the SLEP. Instead, the public benefit offer can be accepted if it is consistent with the terms of the SDCP and the Community Infrastructure Guidelines.

31. The Commissioner clearly recognised that the alternative source of power as contended by L & G pursuant to cl 6.14 was before him for consideration. His reasons on their face make it plain that he did not limit his consideration, as contended by the L & G, to Division 7 of Part 7.

31. The Commissioner then notes, and agrees with the position of the parties, that a VPA was not proposed at [135]-[136]:

[135]   As the parties are agreed that a VPA is either not lawfully able, or is not required, to be imposed to give effect to the land dedication, the parties also agreed to strike out conditions to this effect that were originally proposed in draft conditions of consent.

[136]   I accept that the Court does not have power to impose a VPA on Council. For whatever reason, the parties have not entered in to a VPA and s 7.8(1) of the EPA Act prevents an appeal being brought on those grounds.

33. He then considers L & G’s cl 6.14 submission at [137] directly and finds in terms:

I also find the Court is constrained from imposing a condition in respect of the land proposed to be dedicated as the public benefit offer contained behind Tab 11 (Exhibit G) clearly provides for the payment of monies to Council in addition to the dedication of land.

34. This is clearly a consideration of the proposition put by L & G. His finding cannot be read as there being no power to approve but rather the nature of the proposal put by L & G is beyond the scope of the power to grant an approval. The balance of his reasons at [138]-[142] must be read in that context. His reference in this part of the judgment to the Public Benefit Offer is merely a repetition of the heading to the offer in that part of the evidence, it cannot be considered to be reflecting some misunderstanding or constraint as to the considerations he was asked to undertake.

35. Contrary to Ground 1, as formulated by L & G, the Commissioner did not limit his consideration merely to Division 7 of Part 7 and, therefore, there is no apparent error disclosed in the manner in which the Commissioner considered L & G’s case and Ground 1 should be dismissed.

36. Rather than the ground as formulated, it appears that L & G’s real complaint is that the Commissioner erred in law by finding that he had no power to approve the DA. Whilst not formulated in this manner, this question does, in part, arise in argument (rather that the ground of appeal) and also has some bearing on Ground 2. Such a question is different than what was formulated in Ground 1. It is in effect saying that the Commissioner did not have to be satisfied that there was power under Division 7 of Part 7 of the EP&A Act because there was as separate and independent power to grant the development consent that proposed the dedication of land under cl 6.14 of the LEP or that he failed to consider whether such a separate and independent power existed and determine the DA on the basis of that power. For the reasons that follow, such submission should be rejected.

37. Prior to the introduction of the provisions relating to planning agreements now contained in Division 7.1 subdivision 2 of the EP&A Act, the sole power to require contributions that comprised the payment of money or the dedication of land free of cost was contained in s 94 (now s 7.11). This exclusivity applied notwithstanding the general powers to impose conditions as contained in s 80A (now s 4.17). That is, any condition requiring the payment of money or the dedication of land, must conform with the prerequisites in s 7.11: Fitch v Shoalhaven City Council (1987) 67 LGRA 165; Fairfield City Council v N & S OlivieriPty Ltd [2003] NSWCA 41; and Lake Macquarie City Council v Hammersmith Management Pty Ltd (2003) 132 LGERA 225. Therefore, any condition that requires the payment of money or the dedication of land free of cost, even where authorised by a provision of s 4.17 must be one that meets the additional preconditions as set out in s 7.11. That is, there was no separate or independent power arising under s 4.15 that would authorise the making of a payment or the dedication of land outside the provisions of s 7.11. The foundation for this construction of the statutory provisions was repeated by Spigelman CJ (as he then was) in Anambah Homes at [15]:

The conclusion that s 94 constitutes an exclusive power for the imposition of a condition requiring the dedication of land, as I pointed out in Fairfield City Council v N & S Olivieri Pty Ltd [2003] NSWCA 41 at [12]-[17], is based on the application of a principle of statutory interpretation, expressed by Dixon J in one formulation in Anthony Hordern & Sons Ltd v Amalgamated Clothing & Allied Trades Union of Australia (1932) 47 CLR 1 at 7, subsequently frequently applied, in the following way:

“ … When the Legislature explicitly gives a power by a particular provision which prescribes the mode in which it shall be exercised and the conditions and restrictions which must be observed, it excludes the operation of general expressions in the same instrument which might otherwise have been relied upon for the same power.”

38. With the introduction of the provisions relating to planning agreements s 7.11 was no longer the exclusive source of power to require the payment of money or the dedication of land. The power to impose a condition that required such action was extended to include any condition that related to a planning agreement authorised by the EP&A Act. This extension of the circumstances, however, did not overcome the statutory scheme as previously set by s 7.11, it merely extended it to the additional circumstances where a VPA was proposed. The consequence was, as expressed in Anambah Homes, that there were now two means by which dedication of land free of cost could be effected and no residual power reliant upon more general provisions. Contrary to the submission made by L & G, there is no part of Anambah Homes that, either expressly or impliedly, is authority for the proposition that a volunteered dedication falls outside s 7.11.

39. As was stated by Jagot J in Sanctuary Investments Pty Ltd v Baulkham Hills Shire Council (2006) 153 LGERA 355 at [45] in circumstances where a VPA was in fact offered, the reasoning of which I adopt:

Given the applicants’ offer, the question of the extent of the power available under s 80A does not arise. Nevertheless, it is appropriate that I record that I do not accept the applicants’ arguments about the capacity to impose such a condition absent the offer to enter into a planning agreement. The reasons put forward by the applicants to this end are unpersuasive. Absent the provisions relating to planning agreements, s 94 was the exclusive source of power for a consent authority to impose conditions requiring the payment of money (Fairfield City Council v N & S Olivieri Pty Ltd [2003] NSWCA 41 at [2], [73] and [77], Maitland City Council v Anambah Homes Pty Ltd (2005) 147 LGERA 234 at [132], Fitch v Shoalhaven City Council (1987) 67 LGRA 165). The applicants’ offer is to pay a monetary contribution, albeit to another council. The fact that the condition is not one authorised by a contributions plan and that the money will be expended outside the area of Baulkham Hills Shire Council does not mean that the condition is free from the constraints imposed by the scheme of s 94, and able to be imposed under s 80A(1). Contrary to the applicants’ submission, s 80A(1)(a) is not a source of residual power to impose conditions requiring payment of money outside the scheme of s 94, as the decisions in Olivieri and Anambah disclose. The decision in Longboard Developments Pty Ltd v Byron Shire Council [2001] NSWLEC 143, relied on by the applicants, is not authority for any contrary position. The scheme is also not ousted by the applicants’ agreement to the condition. The provisions relating to planning agreements turn on the developer’s agreement, but agreement cannot give the consent authority power it does not have under the statute. Nor do I accept the submission that purchasing land for conservation purposes is outside the scope of “public amenities and public services” referred to in s 94. That is contrary to the decision in Hammersmith Management Pty Ltd v Lake Macquarie City Council (2003) 124 LGERA 63 affirmed in Lake Macquarie City Council v Hammersmith Management Pty Ltd (2003) 132 LGERA 225).

40. Where the grant of consent imposes a condition approving the development application, which application proposes the dedication of land, there must be power to impose such a condition whether the dedication was voluntary or not. The only power to impose such a condition is that available under ss 7.11 or 7.4, there being no residual power in s 4.17, contrary to the submission of L & G. As the DA, as formulated, could not be approved due to there being no relevant power engaged under s 7.11 or s 7.4 the Court had no power, as consent authority, to impose a condition reliant upon cl 6.14 of the LEP requiring the Proposed Dedication.

41. L & G contended that the dedication could be effected by the granting of an approval in accordance with the development application without a condition that related to dedication. There is no substance to this submission, a consent cannot be granted to development proposed if there is no power to permit the consent to be granted. Merely because an applicant formulates a development application that exceeds the power of approval if a condition was imposed is not overcome by an approval to the development application absent a condition. The grant of the approval can only be made if the development it contains is development capable of being approved. In the EP&A Act development that included the dedication of land free of cost can only be approved if the dedication is authorised by a provision of the EP&A Act and for the reasons outlined above, it is not and therefore the development application is incapable of approval.

42. In the alternative, L & G contends that the DA was not subject to the provision of Division 7 of Part 7 as the offer was not “required” but was volunteered as part of the development application either through the Public Benefit Offer or the plan of subdivision. L & G’s submission is that where a person volunteers dedication as part of its development application then the dedication is not “required” it is merely to be considered as part of the determination of the development application under s 4.15. In the alternative, if power is required to be identified, it is provided through the application of cl 6.14 of the LEP and s 4.15 of the EP&A Act.

43. These submissions do not properly characterise the development application nor the provisions of the LEP. Clause 6.14 of the LEP permits a developer to make an election in the event it is seeking to exceed the FSR controls in the LEP. That election is either reliant upon a cl 4.6 variation for the whole of the exceedance of the FSR control or in the alternative reliant upon cl 6.14 and the provision of public amenity benefits to the extent provided for in that clause and if an additional exceedance exists (as was the case for this DA) to seek a variation under cl 4.6 for the remaining exceedance. Whilst the election as to which path is taken is left for the developer, the power to approve a building that exceeds the FSR provided for in cl 4.4 must be engaged either by cl 4.6, cl 6.14 or a combination of both. Therefore, where a dedication forms part of the cl 6.14 bonus, that dedication is required in the sense that the development application is incapable of being approved where there is a reliance upon it to attract the bonus FSR. Absent dedication and the cl 6.14 bonus FSR a cl 4.6 variation for the total exceedance is required.

44. The fact that cl 6.14 does not make reference to the requirement to enter into a VPA does not alter this position. As is provided for in s 7.7(1) an environmental planning instrument cannot require a planning agreement to be entered into noting that the provisions of s 7.7 define “planning agreement” as including any agreement however described containing provisions similar to an agreement referred to in s 7.4. The Public Benefit Offer to which L & G refers would be included within this definition.

45. Further, in the circumstances of this case, the Commissioner found at [144] that:

Absent the dedication of land, I cannot be satisfied that the proposed development enables the development of infrastructure, other facilities and public domain areas associated with existing and future public transport as I must be in order to grant consent, in accordance with subcl 10(2) of the Urban Renewal SEPP.

46. Clause 10.2 of the State Environmental Planning Policy (Urban Renewal) (the SEPP) was a statutory precondition to the grant of any development consent and, therefore, the dedication relied upon to meet the requirement of the SEPP was further required by that SEPP and, for that reason, also fell within the requirements of s 7.4 of the EP&A Act.

47. For those reasons, the error identified in Ground 1 or as alternatively formulated in submissions is dismissed.

Ground 2

Matters for determination

48. As I understand this ground, L & G is contending that even if there were no power to grant consent to the development application without a VPA the Commissioner should have granted such consent. By refusing to grant the consent he was acting contrary to law, or that he could have imposed a condition requiring the Applicant and Council to enter into a VPA.

L & G’s submissions

49. L & G accepts at [22] of its written submissions that the error alleged under Ground 2 is founded on the same matters as those relating to Ground 1, but the error is said to be of a different kind. That is, the Commissioner erred in finding that the Court had no power to give effect to the L & G’s offer to dedicate the land without a VPA having been entered into for the three reasons, namely:

1. A VPA was not required for the voluntary dedication of land as part of a development application under cl 6.14 of the LEP;

2. It is contrary to s 7.7(2) of the EP&A Act to refuse to grant consent on account of the failure to enter into a VPA; and

3. Even if a VPA offer was a precondition to give effect to the dedication, the Court did have the power to accept the VPA against the wishes of the Council, exercising the functions and discretions of the consent authority under s 39(2) of the LEC Act.

50. As to the first basis, L & G repeated its submissions as relevantly identified in Ground 1. In addition, it noted that s 7.2 of the EP&A Act provides:

This Division does not derogate from or otherwise affect any provision of an environmental planning instrument, whether made before or after the commencement of this section, that requires satisfactory arrangements to be made for the provision of particular kinds of public infrastructure, facilities or services before development is carried out.

51. Clause 6.14 is arguably one such provision. It requires the consent authority to be satisfied that community infrastructure is reasonably necessary, and that public infrastructure will be provided before additional floor space could be approved. Accordingly, to require a VPA would derogate from the requirements of cl 6.14 of the LEP.

52. As to the second basis, it contended that the Commissioner's conclusion was contrary to s 7.7(2) of the EP&A Act, which provides:

A consent authority cannot refuse to grant development consent on the ground that a planning agreement has not been entered into in relation to the proposed development or that the developer has not offered to enter into such an agreement.

53. Here, while a planning agreement had been offered, it had not been entered into because the Council rejected the offer on account of the minor encroachments. Accordingly, to conclude that the only reason not to approve the development was because a VPA had not been entered into is directly contrary to this provision.

54. As to the third basis, it contended that if a VPA was necessary the condition could have been imposed requiring entry into a VPA on the terms of the L & G’s offer in accordance with s 7.7(3) of the EP&A Act. L & G noted that whilst it had not submitted to the Commissioner that he should accept the VPA offer and impose a condition to that effect, it was nevertheless plain that it was a submission that he could. L & G relied upon the transcript at Tcpt, 24 November 2020, p 55(34-42) which is extracted below at [69].

55. The Commissioner could have imposed one of the draft deferred commencement conditions that had been prepared by the Council, even though it was later withdrawn by the Council. It was enough that there was an offer by L & G that was capable of acceptance.

56. The dedication without a VPA was an alternative approach taken by L & G as the Council was not prepared to accept a VPA.

Council’s submissions

57. Ground 2, rather than being a separate ground, is a different formulation of the same ground identified with respect to Ground 1, namely whether cl 6.14 was the power that would facilitate the Proposed Dedication of land. For the same reasons identified with respect to Ground 1, this ground should also be dismissed.

58. The Commissioner did not ask himself the wrong question, he determined the matter consistently with how it was framed by L & G. The complaint that the Commissioner somehow misconstrued L & G’s case by referring to a “public benefit offer” is no more than the Commissioner adopting the wording used by L & G to characterise or describe the offer. The judgment makes it clear that the Commissioner was well aware that L & G was contending that the offer was said to relate to cl 6.14 and not s 7.11 or a VPA.

59. Whilst L & G in closing submissions moved from a suggestion that a VPA would be entered into and made some submissions relating to the dedication being related to cl 6.14, L & G never made any submissions as to how the power to impose a condition relating to such dedication could be made by the Court as consent authority. The submissions now put relating to cl 6.14 (even if accepted) were never put to the Commissioner.

Findings on Ground 2

60. Ground 2, to the extent that it contends that cl 6.14 of the LEP was a source of power to permit the grant of development consent that proposed the dedication of land free of cost, must fail for the same reasons identified with respect to Ground 1.

61. As to the second basis relied upon by L & G the Commissioner did not in fact refuse the grant of consent contrary to s 7.7(2). As was made clear by the Commissioner he stated at [144]:

Absent the dedication of land, I cannot be satisfied that the proposed development enables the development of infrastructure, other facilities and public domain areas associated with existing and future public transport as I must be in order to grant consent, in accordance with subcl 10(2) of the Urban Renewal SEPP.

62. Whilst a VPA may have permitted the dedication of land and overcome this deficiency it cannot be said that the Commissioner refused the development application on the basis that a VPA was not entered into or not offered. His refusal was on the basis that he was unable to be satisfied of the necessary precondition to the grant of consent. I further note that absent the cl 6.14 floor space bonus the proposal was also unable to be approved as the variation to the FSR in the cl 4.6 objection as being considered by the Commissioner for the reasons advanced by L & G (see [10] above) only related to floor space excluding the bonus. On the basis of the case formulated by L & G it was essential that the Proposed Dedication be capable of acceptance in order for there to be power to approve the DA. This could have been cured by abandoning the claim for an entitlement under cl 4.16 for a bonus and relying upon cl 6.14 for the totality of the exceedance, this approach, whilst available, was not adopted by L & G.

63. The reliance by L & G upon the derogation provision in s 7.2 of the EP&A Act is misplaced. In the circumstances of this case, L & G determined that it would provide the Proposed Dedication to obtain the benefit of the operation of cl 6.14. The requirement for a VPA to be entered into to facilitate the dedication does not derogate from cl 6.14, it operates to supplement it in circumstances where a dedication of land free of cost is proposed.

62. As to the third basis L & G contends that the Commissioner could have imposed a condition requiring the VPA in the exercise of his discretion and in accordance with the provisions of s 39(2) of the LEC Act (and s 8.14(2) of the EP&A Act). L & G contends in the particularisation of Ground 2 that the Commissioner could have and should have cured the lack of power question by requiring the entering into of a VPA as a deferred commencement condition. This submission must be rejected.

63. There is an inherent discretion as to the imposition of conditions, not a duty. In order for L & G to establish an error of law in the failure of the Commissioner to impose such a condition it must demonstrate that the Commissioner was obliged to impose such condition or in failing to do so he had otherwise erred at law. L & G, apart from submitting that it was open to the Commissioner to so act, has not identified in this appeal any relevant error on the part of the Commissioner that would comprise a question of law in not imposing such a condition.

64. Further, L & G submitted that the Commissioner could have imposed a condition requiring a VPA in accordance with its Public Benefit Offer. The parties referred to the transcript before the Commissioner relating to the issues in this appeal. The transcript discloses that there was, to put it kindly, a real confusion as to what L & G was in fact proposing as at the end of the hearing, with respect to the offer. It appears that by the end of the hearing L & G’s offer had significantly moved from the Public Benefit Offer outlined at [6] above. What L & G was offering was not the offer as originally made as part of the Public Benefit Offer but something that:

1. Did not require the payment of any monetary contribution;

2. Did not require the entry into a VPA; and

3. Did not propose the dedication of the land comprising Lot 3 in the plan of subdivision that formed part of the development application. Rather, by proposed condition 83 of L & G’s conditions, proposed that the dedication in the plan of subdivision be subject to the provision of easements to permit the encroachments to remain on the land dedicated adjacent to proposed Lot 1.

67. L & G did not submit to the Commissioner that he should impose such a condition on either the original written offer or this later unwritten formulation. What was apparent was that by the conclusion of the hearing both parties were contending that a condition relating to a VPA should not be imposed. Each of the parties had removed from their “without prejudice” conditions any reference to the VPA. To the extent that L & G suggests that those conditions were the “preferred outcome”, but in the alternative would have accepted a VPA condition, this suggestion must be seen in the context of what was put to the Commissioner. If L & G was to contend that there was an alternative, albeit less palatable alternative position than that provided for in its conditions, it was bound to bring this to the Commissioner’s attention. The transcript together with the written submissions of L & G in the hearing before the Commissioner do not permit even an inference that such a position was put to the Commissioner at all.

68. As disclosed in the transcript of L & G’s closing submissions to the Commissioner the case that was put did not rely on a VPA but was pressed in most strident terms to disavow any suggestion that a VPA was required or should be imposed. The two references that deal directly with L & G’s submission are as follow:

There's also an additional issue and that is that the offer has come by way of a VPA very late in the piece, and the difficulty for council is that there's a process for consideration of a VPA by council. It's reasonably lengthy and involves consideration by the VPA steering committee and a public notification process among other things. There's the additional problem that the Court doesn't have power to impose a condition of consent requiring council to enter into a VPA, it has to be it's an agreement and I know that my friend agrees with that submission. So, there's a difficulty there. In other situations where council has accepted dedications, always this process has gone through and the council has been able to form a view through its VPA committee about the appropriateness of the dedication to go through the public notification process, and that hasn't been done here, so that's a difficulty. Tcpt, 24 November 2020, p 48(3-14).

Then a submission was made in relation to the VPA proposition, that the council hasn't accepted the situation like this without a VPA. That's not true, and I'll tender it if I have to. I sent to Ms Hammond this morning the council report that was accepted and adopted for 38 40 McEvoy Street, where there was no VPA, where the dedication of the 2.4-metre strip occurred without a VPA. No VPA, it was exactly as proposed here, that is dedication of land under 6.14 without a VPA. It doesn't go to power. Tcpt, 24 November 2020, p 53(31-37).

69. The Commissioner also enquired as to how the land would be dedicated and the exchange with Senior Counsel for L & G at Tcpt, 24 November 2020, p 55(9-42) was:

COMMISSIONER: Thank you to both of you, as we shortly should close. If the Court was minded therefore, having gone through a number of steps that you've both advised me on, that the dedication should go ahead, what is the means by which that would occur, firstly Mr Pickles and then Ms Hammond?

PICKLES: It occurs, Commissioner, by the conditions as both proposed by the council and the applicants for that matter, the council or the applicant's conditions both require the dedication of that strip. The only difference materially, if I can in the council's conditions, the dedication appears--

HAMMOND: We don't have a dedication in our conditions.

PICKLES: You do, I think you do. Yes, condition 86:

"Lot 3 shall be dedicated to the public as a road - prior to the issue of any stage or final occupation certificate. Public domain works to be completed to the satisfaction of the public domain division. Subdivision stages may be combined if so desired and land to be dedicated must be unencumbered."

That's the only question we have is how you give effect to that - the council's conditions take that into account. The amendments we've made to our conditions in the equivalent of 86 is to make provision for an easement for support, but the dedication is effected, in the applicant's conditions it's condition 83:

"The developer must dedicate or cause to be transferred to the council lot 3 as identified in the draft plan of subdivision and that has to be done before occupation certificate."

and then in respect of the encroachments we have to provide for the council an easement in terms of - the council is satisfied with which will allow the encroachments to remain for the life of the building only. We've expressed that in the condition, it will only be for the life of the existing building.

70. This exchange makes it plain that at least by the close of the case before the Commissioner L & G had abandoned any reliance upon the Public Benefit Offer (or any other formulation) being an offer that would or could be the subject of a VPA. The Commissioner cannot be criticised for or said to be in error in law for failing to undertake a course of action that formed no part of either party’s case: see Segal v Waverley Council (2005) 64 NSWLR 177 at [42]-[43] and [93]. The Commissioner in these proceedings approached the determination of the appeal on the basis of the case as formulated by L & G. L & G have failed to identify any error of law in the Commissioner’s determination as it relates to Ground 2.

71. For those reasons, Ground 2 does not disclose any error or identify any relevant question of law and is, therefore, dismissed.

Conclusion and orders

72. For the reasons outlined above, L & G have not demonstrated that the Commissioner’s decision disclosed an error of law. Accordingly, the appeal must be dismissed.

73. The Court orders that:

1. The s 56A appeal is dismissed;

2. The Applicant is to pay Council’s costs of the Appeal; and

3. The exhibits are returned.

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Decision last updated: 17 December 2021